Back in July, the Finance and Budget Commission was asked to weigh in on possible avenues by which the city could reduce its personnel costs by 2.5 million. Instead of doing that, they “expressed concern over what they viewed as an unnecessary reduction in services, before other alternatives had been considered.”
One of the problems here is that, in a lot of ways, the commission has in fact overstepped its bounds. It is to be an advisory commission, advising council on how best to proceed. The council already made the decision to cut funding for personnel, and the job of the commission was not to argue against that decision but rather to suggest ways in which that could be done in the best possible manner.
Instead, the commission put themselves squarely into a post-decision debate when they argued that there is no “definitive reason” for that “kind of reduction to take place at this time or within this timeline.”
They did agree that reduction of fire services from 4 to 3 on an engine company, as well as the fire services merger with UC Davis, should be implemented.
Like others they argue that we “need to allow collective bargaining to take place prior to making reductions.”
Finally, they argue that “Transportation projects from prior year need to be completed prior to additional funding being allocated.”
I would argue that there is a definitive reason for that kind of reduction to take place at this time, which is that the city is really looking at having to reduce, at minimum, $7 million in costs over the next few years, based on current projected growth in the costs of pensions and OPEB (Other Post-Employment Benefits), as well as the continued flat, if not reduction, in revenue levels.
A big component of the cuts will be reforms to pensions, retirement and other factors that, indeed, will have to accompany the collective bargaining process.
However, likely cuts and needed structural changes are not limited to PERS (Public Employees’ Retirement System) and OPEB. Fire staffing is a huge issue that the city is going to have to grasp. We have learned in the past few weeks, in addition to delays in the fire staffing report that was supposed to come out earlier this summer, that there are now some hang-ups in the merger process, with regard to salary differentials and fire staffing.
Moreover, a good deal of reorganization of city government needs to occur – where the city is going to have to streamline the delivery of services and cut bureaucracy. None of those changes are dependent on the collective bargaining process.
The transportation part makes, by far, the least sense. It would be interesting to see a more detailed explanation of what would appear to be a nonsensical position that transportation projects need to be “completed” prior to additional funding.
That ignores the process by which contracts are let, the timing of the contracts versus the budget cycle and more.
The biggest problem is that the city is now operating largely without any kind of road maintenance funding. Traditionally, the city has relied upon $800,000 annually.
The city has a pavement rating right now that puts it at 71. Not great, but not horrible. For the last several years, the city has been funding it through non-general fund sources at around $800,000.
Two years ago, Bob Clarke, now the Interim Director of Public Works, projected that if we continued to fund the road repairs at $800,000 we were developing about a $350,000 per year gap between funding levels and what we needed to maintain roadways at the 71 rating level, which is not a great rating to begin with.
Continuing to fund it at the $800,000 level would result in the pavement rating dropping to 68.
This past year, the one-time, non-general fund sources completely dried up. The city had no money for road repair in its budget.
Even funding it at historic levels would put us in danger of amassing unmet needs, in the form of deferred maintenance on roadways, at somewhere between $15 and $20 million.
That is a word that needs to scare people – deferred maintenance – because every time you defer maintenance, the costs go up, not down, to finance it in the future.
What was the projected spending for road repair this year? $0. That’s where Tier 2 came into play. Tier 2 put about $125,000 into the road repair fund, coupled with $100,000 that the city dug up. Something, but still taking us into a place of real danger.
So, about $800,000 or so of that $2.5 million goes to shore up the road maintenance in the city and ensure that we do not fall further behind where we already are. That money could come back if the city is eventually able to find grants or other sources for road work, but it is not as though this were a decision that the council didn’t put much thought into. In fact, they had been discussing it for a full six months prior to the eventual decision.
How the statement by the FBC gibes with the need by the city to increase the amount of money going to road maintenance work, and to cut into a growing fund of unmet needs and expensive deferred maintenance, really bedevils me. Hopefully, someone from that commission can clarify their thinking on this.
The problem that we face is that if the city does not at least get one million for road maintenance, the city will have to look into more cheap “fixes” like chip seal, which has been a real problem, as many are aware.
As the city put it in a press release, “Chip seals such as this are used in place of asphalt overlays because it is a relatively inexpensive way to extend the life of a street needing remediation. The process seals the street to minimize intrusion of water into the surface and can extend the useful life of a street for up to ten years.”
After much complaining, the city is finally admitting what apparently many people knew months before, that this experiment was an abysmal failure. The city has now announced that it is working to address the problems with double chip seal on streets.
Keeping roadways in working order is not some luxury. And deferring maintenance necessarily means you pay more in the long run. We cannot continue to operate a city budget by deferring costs to a later point in time.
And yet, by delaying the $1 million in road maintenance, that is what we are doing.
The same can be said for OPEB. The solution that we have come to is to transition up to the point where we begin a thirty-year process of fully funding retirement health benefits. The idea behind adding a million is that we will be getting closer to the point in time when we can start actually moving toward fully funding.
That is yet another situation where we have deferred costs to a later point in time. To argue that we do not need to do this now does not make a whole lot of sense to me.
If there is one piece of this where critics have a point, it is the half million that the city has allotted to PERS, ahead of a professed need at this time to pay into PERS.
That occurred because half a million was about half of what was needed to cover a reduction in the ARR (Average, or Accounting, Rate of Return) from 7.75% per year to 7.50% per year. Each quarter percent is about one million dollars in cost to the city.
I can see a compromise there.
What I do not understand is why the city finance director came forward with nothing at all for the council to consider. No halfway measures. He did not try to find them a million and then say we need to look further to find the rest. No. He gave them nothing at all. Not even for road maintenance, which is a pressing need.
—David M. Greenwald reporting
[quote]One of the problems here is that in a lot of ways the commission has in fact overstepped its bounds is to be an advisory commission, advising council on how best to proceed. The council already made the decision to cut funding for personnel, the job of the commission was not to argue against that decision but rather to suggest ways in which that could be done in the best possible manner.[/quote]Ok… so if your boss “makes a decision” to do something that you think is a really bad, or a wrong course of action, you do not say so? Perhaps that is why you blog, or why there was a series of trials in a city known as Nuremberg.
“Ok… so if your boss “makes a decision” to do something that you think is a really bad, or a wrong course of action, you do not say so?”
If such a situation arose and I chose to criticize my boss in public, I suspect i would not have a job much longer. A better course of action for the commission would have been to have stated their position but also follow through on the request to help find ways to cut funding.
As long as you acknowledge that they can voice their concern and/or opposition, then advise how to do something that they disagree with, I agree. I suspect the last minute direction when the budget was adopted was not vetted thru them. I see that as at least a gaffe, if not a failure, of the Mayor/Council.
BTW… because of the Brown Act, no commission CAN question/criticize the CC EXCEPT in public.
Two comments:
1. If an advisory committee cannot express its opinion what good is it? Council is not bound by anything any advisory committee says, so it only has the power of persuasion. If the committee says nothing on an issue as critical as this one, it might as well cease to exist. The boss analogy is a little off–the committee receives no pay and owes its allegiance to the people of Davis.
2. I think everyone agrees that the City needs to cut its budget. The issue to address here is largely tactical. Some people think a rapid $2.5 million cut send a message; others find it disruptive.
Wu:
As hpierce fleshed out my thinking a bit clearer I think my objection was not the criticism of the plan but the lack of advise on proceeding.
[quote]One of the problems here is that in a lot of ways the commission has in fact overstepped its bounds is to be an advisory commission, advising council on how best to proceed. The council already made the decision to cut funding for personnel, the job of the commission was not to argue against that decision but rather to suggest ways in which that could be done in the best possible manner.[/quote]
Commissions are expected to advise the City Council, using their independent judgment. So like Dr. Wu and hpierce, I think you were off base with this one – but it appears that is not quite what you meant. However, if the Commission did not think there was any practical way to achieve the goal set for them, they have a right to say that too, and do nothing, if that is their collective decision. So I’m just not seeing a problem here – and I personally and firmly disagree with the Finance and Budget Commission’s position/decision – but not their right to hold that opinion and their right to not do anything if they thought it would do irreparable damage to the city! Reasonable minds can disagree.
It is a matter of how city commissions are supposed to work. They have every right to AND SHOULD advise the City Council independently, and that could include not doing anything if they think it would be detrimental to the city. Instead they would voice their opinion they don’t think the task set for them can be reasonably done, and defer the matter to the City Council to find ways to get the task accomplished. If the CC is successful, the F&B Commission certainly runs the risk of looking a bit foolish, but so what? Who can predict the future? No one is right 100% of the time…
Directly from the Commission Handbook:
“Individual Council members may attend meetings and may participate in the Commission’s discussion, BUT ARE NOT IN A POSITION TO DIRECT THE COMMISSION’S DISCUSSIONS OR RECOMMENDATIONS.”
[i]”A big component of the cuts will be reforms to pensions, retirement and other factors that, indeed, will have to accompany the collective bargaining process.”[/i]
I am not sure what you mean by “to accompany” the collective bargaining process.
If you listen to the voices of the city’s workforce–including the small number who post on this site–there is next to no chance that the necessary reforms in the labor contracts will be achieved through ‘collective bargaining.’ I am in regular contact with a dozen or so city workers (not counting those I speak with in higher management positions) and I get the sense they are angry. They think they have already given away too much. They want increases in compensation. They think they deserve a big cost of living adjustment in their favor and they want an end to furloughs. That is what I am hearing with unanimity.
My conclusion, thus, is that the bargaining process will get us too little to save the City from its burdens. The reforms we need will be gotten from the labor deals. But those deals will have to be imposed, not bargained.
The question is to whom the Council thinks it owes its allegiance–the 65,000 residents of Davis who vote and pay taxes here? Or the workers, many of whom* live elsewhere?
*80 percent of the firefighters, for example, live outside Davis. The new City Manager, likewise, does not live here, nor is he required to.
“The new City Manager, likewise, does not live here, nor is he required to.”
Wrong on both accounts. The council has not repealed the ordinance that requires him to live in Davis. And he was moving his family into their Davis home this weekend.
As for the rest, you may be right that the new terms will have to be imposed, that is part of the collective bargaining process however.
[quote]My conclusion, thus, is that the bargaining process will get us too little to save the City from its burdens. The reforms we need will be gotten from the labor deals. But those deals will have to be imposed, not bargained. [/quote]Hmmm… sounds like a couple of years ago, where a Councilmember wanted to go to impasse and impose a contract [u]prior to the first meeting[/u] of the meet and confer process… sure sounds like “good faith” to me…. not. However, that being said, let’s save the time and effort (and cost of a negotiator) of ‘playing’ a meet & confer game if, at the end of the day, the Council has the desire and the will to do whatever they wish.
[quote]The council has not repealed the ordinance that requires him to live in Davis. And he was moving his family into their Davis home this weekend. [/quote]
Yes, I heard that too – that the new City Manager WILL LIVE IN DAVIS. That is fantastic, as now the new City Mgr will have a real stake in the community. I was actually very encouraged by this development.
[quote]As for the rest, you may be right that the new terms will have to be imposed, that is part of the collective bargaining process however.[/quote]
I’d rather not be so pessimistic. Let’s let the City Mgr have a chance to get his feet a bit wet; let the CC let the City Mgr get a chance to get his feet wet; lets leave time for Citygate to get its report in; and ignore rumors and assume everyone is going to act in good faith. We don’t have the Gang of Three on the CC anymore, but a CC that is very attuned to the city and its needs tho they may disagree on how to meet those needs. We have a new City Mgr who almost certainly has to be better than the last one (just my personal opinion). The economic situation is abysmal, to be sure, but let’s stay positive…
Geeeeeeeeeeeze, do I sound Pollyanna-ish? Guess I take after my Dad, God bless ‘im!!! Dad always said to me growing up “If you don’t have hope, you don’t have anything…”
[i]”And he was moving his family into their Davis home this weekend.”[/i]
I did not know that.
A member of the city council told me–you might have been there for this discussion–that there was a chance Pinkerton would not settle in Folsom, but would instead move to Davis. I did not realize it would happen so soon, because the school year started on August 23 and he had been hired just a few weeks before that.
A city worker who does not think we need major labor contract reforms: [i]”Hmmm … sounds like a couple of years ago, where a Councilmember wanted to go to impasse and impose a contract prior to the first meeting of the meet and confer process… sure sounds like “good faith” to me.”[/i]
I don’t know the specifics of your argument. However, I do know that every contract which was up for renewal in 2009 had been discussed in closed door negotiations for at least 7 months prior to the expiration of those contracts. I don’t know what went on behind closed doors, but I know that starting in December, 2008 the council met in closed session to discuss the labor deals. I also know that no deals were reached before December 16, 2009, when the current fire contract began.
So your claim that “a Councilmember wanted to go to impasse and impose a contract prior to the first meeting” may be true. I don’t know. But that strikes me as beside the point, when it took a year or more for every contract to be worked out. And the one which was not, the one which has been imposed, DCEA, took even longer.
[i]”… let’s save the time and effort (and cost of a negotiator) of ‘playing’ a meet & confer game if, at the end of the day, the Council has the desire and the will to do whatever they wish.”[/i]
I wish that were the system. What instead has to happen is a kabuki dance, where the council meets in closed session and decides its terms, then the council’s negotiator(s) present those terms to the labor negotiator(s), then labor says no, then council’s rep(s) return with a new offer or labor comes back with its own terms and after thousands of dollars are expended in this process, the council will (hopefully) impose terms which save the city from bankruptcy or further decimation of city services, such as last week’s decision to remove many public garbage cans around our parks and greenbelts because it has now been decided picking up the trash is too expensive.
I never said that I did not think that “reforms” were appropriate. You assume I am a city employee. I know many who are. What I am concerned about is a “pretend” process whereby the employer says, “let’s meet & confer… here is what is going to occur, do you agree 100%, no alternatives will be considered, and if you do not walk out the door with agreement, we’ll do it anyway.” I do not like charades.
[i]”What I am concerned about is a ‘pretend’ process … I do not like charades.”[/i]
I don’t either. I wish the city could just impose its terms from the get-go. But the state law requires the charade. So there will be a charade.
In the past, the pretense was that the city counicl fought on behalf of the taxpayers and the labor reps fought on behalf of the workers. And in between the two sides a fair deal was reached.
But as I look at it, this has never been the case with public employee unions. There never has been, up to now, anyone fighting on behalf of the taxpayers. So this phony process called collective bargaining has resulted in a terrible imbalance, harming the collective interest all to the benefit of the workforce.
Let me give just one example to help make my point: union bank hours. How could anyone justify that benefit on behalf of the taxpayers, where we pay regular and overtime wages to workers who are not working, but rather are attending union meetings and union training sessions, mostly outside of Davis?
Want another? How can anyone justify from the taxpayers’ point of view a contract which guarantees overtime pay every pay period for firefighters, despite the fact that one-third of the hours those employees are ‘on the clock’ they are sleeping, and more hours which they are awake and on the clock they are preparing their meals, cooking and feasting?
You might conclude that I am unsympathetic to the notion that we need to strike a balance with labor so that we have a workforce with good morale and one that is happy enough with the terms of their jobs that they choose to stay in the employ of the City for the long term, because I almost always speak of all the wrong being done to the people of Davis by these overly generous labor deals. But that conclusion is wrong. I do believe in striking a balance. I do believe we should offer terms which make workers want to stay with the city for the long run.
I think, however, that our policies have had no balance at all: I think they have completely screwed over the citizens and we cannot continue in the direction we have gone for the last 20 years.
A new balance has to be struck. It has to be one where the cost of compensation rises proportionally to the income growth of the city. It has to be one where the terms of the contracts don’t encourage early retirement and or saddle the future taxpayers with unfunded post-retirment benefits to those young retirees. It has to be one which does not pay unnecessary overtime or union bank hours. It has to be one which gives out no more paid holidays or paid vacations than typical private sector workers get. It has to be one in which the rising cost of medical care does not result in a loss of services to the citizens of Davis.
To Rich Riflin: I’m hoping City Mgr Pinkerton will represent the citizens for a change…
[quote]Let me give just one example to help make my point: union bank hours. How could anyone justify that benefit on behalf of the taxpayers, where we pay regular and overtime wages to workers who are not working, but rather are attending union meetings and union training sessions, mostly outside of Davis?
[/quote]I have never, and will never, belong to a union. What you cite, in my opinion, I agree with… however, I do believe that employees not covered by a “union”, should be able to spend city-paid time if they are part of the meet & confer team, for a non-unionized employee group. Otherwise, the employer could wear individual employees down by stretching out the process and decimating an employee’s vacation time. If you believe that employees in the public sector should have NO collective bargaining rights, talk to your legislators and change the laws.
[quote]How can anyone justify from the taxpayers’ point of view a contract which guarantees overtime pay every pay period for firefighters, despite the fact that one-third of the hours those employees are ‘on the clock’ they are sleeping, and more hours which they are awake and on the clock they are preparing their meals, cooking and feasting? [/quote]I have no idea how someone could “justify” this. Never part of my reality, and you cite an anomaly of the fire service in a criticism of all municipal employees… nice work… probably extremely appreciated by “tea-partiers”.[quote]I do believe in striking a balance. I do believe we should offer terms which make workers want to stay with the city for the long run.
[/quote] Agood sign. Look at which departments have the lowest turnover, and therefore, the least “institutional memory”.
[quote]A new balance has to be struck. [/quote]I don’t doubt it… but your proposal will limit compensation to the City’s ability to pay (does that mean any new revenues should go to projects, new programs, etc., and only when all those needs are satiated, if there are any funds left over, the city MIGHT consider compensation increases to reflect benefit cost increases, inflation, etc.?). How about a merit based system? No harder to change THOSE laws than the collective bargaining ones, I’m thinking. Private sector employees at least have that… or they lose their high performers.
Whether I was/am a public employee, the words I write would be the same…. is that true of Mr. Rifkin and/or Mr. Greenwald? Or am I just a self-serving liar?
Got distracted and did a “dumb-thumb”…[quote]A good sign. Look at which departments have the lowest turnover, and therefore, the [s]least[/s] most “institutional memory”. [/quote]
Rich said: “Want another? How can anyone justify from the taxpayers’ point of view a contract which guarantees overtime pay every pay period for firefighters, despite the fact that one-third of the hours those employees are ‘on the clock’ they are sleeping, and more hours which they are awake and on the clock they are preparing their meals, cooking and feasting?”
Rich, I am always impressed with your research, but let me add my two cents worth based on personal experience.
I have lived and worked right across the fence from the Main Fire Station during most years since 1995, and I can tell you I doubt those FF get much of a rest at night. They are constantly going out on calls. I cannot even imagine dozing off, and then being woken up by loud alarms, hour after hour, night after night. Sleep in under 4 hour blocks is fairly worthless. In aviation law, I deal with crew fatigue issues all the time, and the NTSB and FAA have done a lot of sleep deprivation research. If those FF dont get a solid rest on their days off, I would bet that they are walking cases of sleep apnia.
Many of their calls concern drunken college students who are medically impaired and cannot help themselves, or are involved in auto accidents.
You have to give those FF credit when credit is due for their hard work and fairly tough working conditions.
hpierce: I have never asked who you were, I had always assumed given you comments that you were either a city employee or close to them. You have the right to anonymity on this site and I won’t breech that. But if you are willing to share, I would like to understand your background.
To hpierce: Thank you for a different perspective. I found your comments very thought provoking…
To some extent I think it is easy for citizens looking from the outside in to make rash criticisms, not fully understanding the underlying mechanisms, seeing other points of view; or to stake out extreme positions w no willingness to make compromises. It is extremely important for citizens to be engaged in community affairs and raise questions often, but it is crucial to always keep an open mind, and listen to all sides, rather than stake out an initial position and stick with it the facts/other pts of view be d-mned. Then when push comes to shove, a citizen should make the decision s/he feels is the right one given a sufficient amount of information…
[i]”I don’t doubt it… but your proposal will limit compensation to the City’s ability to pay.”[/i]
Ultimately, we are always limited by our ability to pay. The question is the trajectory of spending at any given time. We can sustain our trajectory if we contain the increases in our costs on a year-over-year basis to the long-run growth of our income stream. If we exceed that trajectory, then we put ourselves in a position to either take away compensation down the road or reduce the expected levels of services by doing things like closing swimming pools, stop picking up the trash, laying off police personnel and so on.
One area where I strongly disagree with David Greenwald is what we should do during a recession. My belief is we should dip into our reserve funds, notably the general fund reserve. David’s belief is that barring a meteorite hitting Davis, we should maintain that fund at 15% of the GF budget. David has been very critical of the council for the fact that the GF reserve is now below 15% (by a small amount). Despite the fact that income growth to the City is near zero, he wants the City right now to return the reserve fund to its mandated 15%.
If the City would follow my advice–to limit the increases in costs to the long-run growth in income–we could then avoid lay-offs and furloughs during ordinary recessions, when things like sales tax revenues take a dip. I would have us spend down 1/3 of the reserve fund to cover income losses in the first year of a recession; and spend down another 1/3 the second year. I would not want to go below a 5% reserve fund after that, because it is prudent to have cash in case that meteorite ever hits us.
In an extraordinary recession, such as we are now in, some lay-offs or furloughs might be necessary. I concede that. But most post-WW2 recessions have historically lasted less than 2 years. And when the income stream to the city regains its form, I would suggest we could rebuild the reserve fund a few percent each year until it was back to 15%.
Unlike many in Davis–including, apparently, some bargaining groups–I think the worst option is to lay-off employees. Beyond the fact that I want a full complement of police officers patrolling the streets and I don’t want other services (whether they affect me or not) being reduced or elimiated, I don’t want to see individual employees who are working hard and trying their best to serve the people of Davis and trying to do all that is expected of them to become unemployed*. Yet unions (or their equivalents) seem to prefer this option–to get rid of the low man on the totem poll, in place of having all employees take a small cut in total comp. To me, that attitude is heartless. I feel very much for the productive worker whose position is eliminated.
*It was about 5 years ago, well before the economy tanked, that I first called for changing our fire staffing model from 4 to 3 on each truck. Doing that means eliminating 9 jobs. My suggestion, because I do understand the pain job elimination means, was to achieve that through attrition over a number of years, so no one would be terminated involuntarily. If we had started this in 2006 or 2007 and we kept the compensation growth at a sustainable level, I think we could have achieved the 3 men on a truck model without laying anyone off. But now I think that is impossible. We are going to go to 3 on a truck. That I have no doubt. But it is almost certainly going to be done with great pain to the 9 firefighters with the least seniority. I am sorry for the pain they will suffer. The fault lies with our city leaders who sat on their hands for the last five yaars.