The budget vote is set for tomorrow night and this figures to be an historic occasion in Davis. There are still a few issues that need to be played out.
Quite clearly, the council would be more comfortable with a budget that spelled out more clearly what the cuts would look like. However, it appears they prefer to put placeholder cuts on the budget now, rather than balancing the current budget with Tier 1 and Tier 2 and then setting a process to consider options by September 30 – a tactic that Councilmember Stephen Souza would prefer.
Toward that end, the idea has surfaced that the council simply create $1.5 million dollars that could be used either for increased pension costs or, if those do not surface this year, then it would be put towards the unfunded liability fund.
Writes the city manager, “The Council could consider allocating as much as $1.5 million in anticipated General Fund savings toward the combined liabilities related to CalPERS and OPEB benefits.”
That avoids the complaint that the city would be cutting money from employees for speculative cost increases, while at the same time, it would have the money available should it need it and if it does not, it would put it toward fully funding OPED (retiree health).
The key will then be how much the personnel cooperate with council to make those $2.5 million in cuts less painful. The council needs union concessions to change the current structure of the MOUs. They do not need anything to simply lay off 33 people.
Mayor Krovoza emphasized that point to the Vanguard earlier this week, “There are paths that hold the promise of minimal staff and service disruptions. I am confident of that.”
He added, “I will make every effort to preserve the positions of our rank and file staff. These are often the people on the front line of serving our citizens, and so if we want to maintain service to our citizens, we shouldn’t be looking there for cuts.”
The Council and the Mayor have made it clear that they want cuts that are progressive (meaning that those who make the most take the bigger hit), preserve services to the extent possible (which means minimizing layoffs to rank and file employees who provide those services) and that come from collaboration with the bargaining units and the departments.
Speaking of which, it is rather remarkable how much of an impact the Vanguard has had in this process.
On Tuesday night, Bobby Weist noted that the council asked if they could cut 10% off department heads and management without negotiating. From there, Mr. Weist took the discussion into charges of Wisconsin and the implication that the council was trying to subvert the collective bargaining process.
“Last week, you see signs here that say welcome to Wisconsin, and that’s exactly what it sounded like,” he said. “It sounded like the Governor from Wisconsin and what they were doing to the employees there.”
“The first thing that was asked was can we just cut 10% of the department heads, without even negotiating or discussing it” he continued.
Except for one problem, the council never asked if they could do that and never suggested that it be done outside of the collective bargaining process. The ten percent cut for managers and department heads came from a question that Stephen Souza asked, when he asked if they could do that without the employees agreeing to changes in the collective bargaining process.
Of course, both City Attorney Harriet Steiner and Interim City Manager Paul Navazio indicated that these changes would have to be negotiated.
Paul Navazio responded that there would be some interest in doing this, but reminded council some of these salaries are not funded through the general fund. He suggested that, while this was an important discussion, we needed to do it with all of the information.
Mayor Joe Krovoza pointed out that they could do FTE (full time equivalent) reduction unilaterally. Harriet Steiner, the city attorney, agreed, stating that they have a unilateral right to reduce the workforce, however, they cannot modify employee packages, of employee groups, unilaterally.
However, the point is that the council never proposed this, Stephen Souza asked in, in typical Stephen Souza fashion in order to shoot it down. Stephen Souza used the response of the City Manager and City Attorney to argue that we cannot balance the budget and deal with unmet needs by June 30 through employee givebacks.
Where did Stephen Souza get the idea to ask the question? You guessed it, the Vanguard who proposed a 10% across-the-board cut for department heads and managers making over $90,000 per year as a way to save half a million – something that should be very much on the table if the $2.5 million in cuts goes through as expected.
It was thus a strawman hypothetical put up by Stephen Souza – we never once argued that it could be done as anything other than a voluntary concession – that Bobby Weist then took and ran with to accuse the council of trying to subvert the collective bargaining process and allowing him to tag them with the Wisconsin label.
At the same time, it illustrates the ability of the Vanguard to help shape and mold the direction of public discourse and the public policy process.
The idea of a ten percent reduction for department heads and managers has a lot going for it, as it could constitute more than one-fifth of the $2.5 million needed to be put into road repair, pensions and retiree health, shoring up the city’s unmet needs and unfunded liabilities.
At the same time, it shows the deceptiveness of both Stephen Souza and Bobby Weist to take and use ideas that have been floated in the public sphere to attempt to create strawmen arguments that they could then shoot down.
This method worked well when Mr. Souza was in the majority, but now he lacks the power to influence the terms of debate as he once had.
Mr. Souza is in a dilemma. As he contemplates running for re-election, he is stuck between a rock and a hard place. He can be the lone hold-out in a 4-1 budget debate and then have to justify his no vote and why his four colleagues were wrong next spring as the question comes up in venue after venue.
Or he can join his colleagues and risk losing the backing of employee groups. Most likely he will do what he has often done in the face of a tough decision, abstain.
Either way, council appears to have more than enough votes to pass the historic budget and move this city forward dramatically towards fiscal stability.
—David M. Greenwald reporting
You seem to be happy about this. It may be needed but it is not something to celebrate. In fact it is that sort of in your face glee that was so offensive in Wisconsin. With peoples jobs and financial dreams on the line your schadenfreude is offensive to many.
I’m happy that our city is taking steps to fix it’s fiscal situation. I’m happy that we are doing what needs to be done after years of not doing it. I’m trying to minimize the impact on the rank and file people. I believe this can be done without anyone losing their job, but the people at the top, who quite frankly have been living it up for the last decade need to step up here. Wisconsin aimed at undermining the collective bargaining process and harming people of very modest means. People who make $150,000 in total compensation are not of modest means.
[quote]The key will then be how much the personnel cooperate with council to make those $2.5 million in cuts less painful. The council needs union concessions to change the current structure of the MOUs. They do not need anything to simply lay off 33 people.[/quote]
This is it in a nutshell. But villifying city staff is not going to get us where we hope to go – pay cut concessions and a minimum # of employees laid off. We need to create the collaborative non-adversarial atmosphere necessary to nudge the bargaining groups into understanding this is as much for their future as the city’s/citizens’.
[quote]On Tuesday night, Bobby Weist noted that the council asked if they could cut 10% off department heads and management without negotiating. From there, Mr. Weist took the discussion into charges of Wisconsin and the implication that the council was trying to subvert the collective bargaining process.[/quote]
There is no question Mr. Weist misunderstood both the process and who said what to whom, perhaps conflating what was said in the Vanguard/by its author at public comment with what the City Council itself actually stated. However, at this point, it might be wise to rachet back some of the vitriole, so a collaborative atmosphere can take place and allow both sides to come together and get this thing done as painlessly as possible.
As I have repeatedly said ad nauseum (I apologize profusely for repeating myself), city staffers (including Paul Navazio) have to have time to digest the stark and grim budget numbers, and realize kicking the can down the road is not in their best interests; that this CC is serious about setting a course for a more fiscally sustainable future for all concerned, including the employees.
David, why “a 10% across-the-board cut for department heads and managers making over $90,000 per year” instead of a 10% cut for all personnel making over $90,000 per year? Under your suggested cut, someone like Bobbie Weist, who makes roughly $108,000 in salary and overtime would not get a cut, but a “manager” making $15,000 less money would.
Also, if you make it 10% off the top, then you face the situation where the person now making $91,000 per year is reduced to $81,900 in pay after his 10% cut, while the person now making $89,000 keeps his pay the same. That is a bizarre idea in my opinion.
Understanding that this is all hypothetical and highly unlikely–none of the bargaining groups wants to re-open their contracts now–I have a suggested pay cut which would be far fairer: take away 10% of the pay of all employees for every dollar over $50,000 in income. What you get then for an employee who, say, makes $120,000 in salary is a $7,000 pay cut (120k – 50k = 70k x 10% = $7k). For someone who makes $60,000 in salary, his paycut would be $1,000 (60k – 50k = 10k x 10% = $1k). That results in a “progressive” pay decrease, where no one making $0 to $50,000 gets a pay cut, and those making the most get the biggest cut in pay.
As to what really is going to happen, about half of the “savings” in the proposed budget cuts will come from a loss of 4 jobs.
For example, they are going to get rid of the Integrated Pest Management Coordinator, a savings of $40,000. Maybe we don’t need this person. Maybe down the road we will find out we did.
The budget also axes one Park Maintenance Worker I ($82,000), which the report says will result in more overtime for others and having the garbage cans in parks and greenbelts picked up less often. That may be the smartest solution for the moment, but I would think (due to savings on pensions and medical benefits after retirement) we probably could save a lot more here by simpling contracting out more parks work to Coast and GP. Those companies pay the same wages and offer good medical plans. But they don’t cost us pensions and post-retirement benefits.
This budget will eliminate an entry level firefighter position, which is now open, saving $129,627. The result is going to be a lot more overtime for the others. But of course we could get rid of all of the firefighter overtime (with the staff as is) if we went back to normal staffing of 3 on a truck.
In addition to cutting out one patrol officer ($135,473), there are a large number of small cuts to the police department, each of which will make police services much worse.
Ultimately, we are continuing down the exact same path we began on in 2008, cutting back on city services without really addressing the real problems of total compensation or overstaffing in the DFD. I see no reason to think anything will change in this regard until we get new labor contracts next year. It is just a terrible shame that the last round of contracts had insufficient reforms.
No “schadenfreude” going on.
[quote]Mr. Toad: You seem to be happy about this. It may be needed but it is not something to celebrate. In fact it is that sort of in your face glee that was so offensive in Wisconsin. With peoples jobs and financial dreams on the line your schadenfreude is offensive to many. [/quote]
There is no joy and no one is celebrating the cutbacks or potential loss of jobs due to the serious fiscal situation the City finds itself in, including the Davis Vanguard. It appears to me that the Vanguard is rightfully pointing out that they have been speaking up for years about the growing fiscal mismanagement of the City and recognizing there now is a new council majority of Krovoza, Swanson and Wolk who are taking the matter seriously and attempting to correct the situation.
Furthermore, it is disingenuous, in fact down right deceptive, to equate what is occurring in Wisconsin and other states (a full force attack on public sector workers, their unions and the right to collective bargaining) led by Republican governors and legislatures with what is going on here in Davis. Bobby Weist, his firefighters and other union leaders were trying to make that comparison which was completely false. The Davis City Council is undertaking the difficult work to balance the budget and remedy the unfunded liabilities owed by the City while trying to protect their workers and save jobs. No one on the current Davis City Council is attacking unions, collective bargaining or city workers.
What the new council majority is facing is the fiscal mess left over by prior council majorities led by Asmundson, Saylor and Souza and senior city management who refused to acknowledge and rectify the financial disaster which has been building for many years. They are now joining with Sue Greenwald who along with Lamar Heystek had warned and fought hard to get the city management and their council colleagues to recognize and realistically address the issue, but to no avail.
[quote]ERM: As I have repeatedly said ad nauseum (I apologize profusely for repeating myself), city staffers (including Paul Navazio) have to have time to digest the stark and grim budget numbers, and realize kicking the can down the road is not in their best interests; that this CC is serious about setting a course for a more fiscally sustainable future for all concerned, including the employees.[/quote]
Paul Navazio and management have known about “these stark and grim budget numbers” for many years, yet he and former city manager Bill Emlen used smoke and mirrors in past years to ignore the growing fiscal crisis, instead always projecting a best case scenario for their fiscal projections. Navazio & Company have run out of time and need to get with the new program.
I suppose I too could be accused of “schadenfreude” even though I have earlier articulated my view of the immense damage losing a job can cause. I am not happy that some of my fellow workers may lose their jobs, but I am glad that some segment of government is finally taking the necessity of balancing a budget seriously. Would that the state and federal governments do the same. I hope that the unions agree to the concessions necessary to save everyone’s job, but my experience is that people tend to check their position on the seniority list and vote their own interest. It isn’t noble, but it is human.
Rifkin:
My thinking is that managers, supervisors, and department heads are in a leadership position and should be leading by example if we need to the rest of employees to consider concessions. I also specifically picked non-unionized employees.
[quote]There is some concern that it will be difficult to justify taking out $500,000 for pension cost increases that are speculative at this point. Toward that end, the idea has surfaced that the council simply create $1.5 million dollars that could be used either for increased pension costs or, if those do not surface this year, then it would be put towards the unfunded liability fund. — David Greenwald[/quote]David, increased pension costs will not surface this year. Adjustments in contribution rates are made ahead of time, and this year’s pension costs are already factored into our budget (which is indeed in deficit mode). We do have unfunded liabilities which have been determined by actuaries. These are the shortfalls that we should address — not possible long-term assumptions that PERS makes regarding its rate of return on investment.
The fact that many actuaries feel that the current assumptions about the long-term rate of return on investment are too rosy is of importance to our long-term budget forecast, but not to this budget.
[quote]Paul Navazio and management have known about “these stark and grim budget numbers” for many years, yet he and former city manager Bill Emlen used smoke and mirrors in past years to ignore the growing fiscal crisis, instead always projecting a best case scenario for their fiscal projections. Navazio & Company have run out of time and need to get with the new program. [/quote]
City staff may have known about it, but they were comfortable in the assumption nothing would be done about it by the Gang of Three. But it is a new day and a new dawn, with the “new kids on the block” standing fast. City staff did not expect this. They have to have time to digest this new reality, and the opportunity to be part of the solution…