Council Pushes Back Budget Discussion

Last week, the Davis City Council pushed the September 30^th deadline back.  They will now begin with a Budget Workshop, which appears focused on reviewing the current status of unfunded liabilities related to the City’s pension and retiree medical benefit plans, along with unfunded liabilities related to major infrastructure components including streets, sidewalks, bikepaths, parks and city facilities.

According to the staff report, “Staff is also prepared to provide the City Council with an update on the status of developing options and recommendations for identifying no less than $2.5 million in current-year funding to be re-programmed for the highest priority needs identified by the Council.”

The city is considering the following options: “1) potential savings being identified through a series of reorganization and restructuring proposals across all City departments, 2) program areas where potential savings could be achieved through alternative service delivery methods (including, contracting, shared-services, and public-private partnerships),and, 3) specific program reductions.”

From the outline, it appears that there will be a second part to this workshop in October or November that will focus on implementing an action plan that includes labor negotiations, re-organization and restructuring proposals, alternative series delivery opportunities, and targeted program and service reduction (if necessary).

The Vanguard was very critical last week of a decision to delay the proposed cuts into November.

Wrote the city staff: “Staff acknowledges that any reductions based on a $2.5 million dollar package, irrespective of timing, would create significant impacts on service levels. With so much at stake, staff feels the need to have adequate time to allow full vetting of the service impacts.”

“At this time, when considering review of the above-mentioned alternatives to service reductions, staff will not be ready to make solid, fully vetted recommendations by a September 27th deadline,” the report continues.

“In the interim, staff is proposing to move forward with the following plans to continue movement toward a long-term sustainable fiscal plan,” the staff report continues.  “Continued work on organizational restructuring will be advanced with outside consultants, as well as internal department evaluations, with a goal of implementing structures with non-service impacts in advance of our return to Council in November.”

The critical question that the Vanguard asked is, over the last three months, what was done by finance director Paul Navazio to move this process forward.  As we pointed out, three months was the same length of time that the finance director used to develop the original budget.

Councilmember Sue Greenwald, during last week’s discussion on the budget, defended the finance director: “Paul [Navazio] did prepare the specific reductions we asked for…  Paul said he prepared a list that did exactly what we asked for… to basically cut $2.5 million from the general fund and a list of positions to be reduced.”

“So he did do what we asked for, but he just didn’t think it was wise – obviously it would have a profound effect on employee morale if we didn’t want to just do the layoffs.  I can understand that since Paul has the job of both presenting these figures and keeping people working.”

“If we wanted it, he could do it.  I don’t think it’s the right idea now,” she said.

“I think presenting to the council to sort the various options we’ve evaluated is the necessary next step,” Paul Navazio told the council on Tuesday.  “I think what we were struggling with internally… is kind of that next level is the implementation and implication for actually implementing those.  What might be easier to implement in terms of short term savings, might not necessarily be where the council ends up wanting to be in terms of organizational structure.”

He said we are close to being able to start the process of discussing with the council what the budget cutting options are and the implications are, but he said that instead of cutting the $2.5 million he wants to get council and community feedback first.

Mayor Joe Krovoza said, “The theme that I’m most sympathetic to in all of this really is the observation that Sue made when we were at the end of June which was that we were going to potentially bring on a new city manager in the interim between the stated goal the council passed in late June and the end of September.”

“I couldn’t agree more that this is a very complex issue of both finding the cuts and managing through them – so the idea that those things are developed in concert makes sense to me,” he said.

“I don’t think it’s fair to ask our new city manager, who arrived on September 2, to figure this out in a month,” he said.

But while he was understanding of the new city manager’s dilemma with respect to the budget, he echoes some of the Vanguard’s concerns about the lack of apparent progress in the three month time frame that the council gave Mr. Navazio.

The Mayor said, “While we don’t have $2.5 million in cuts here, we don’t have two, we don’t have 1.5, we don’t have one, we don’t have 500.”

“We have spent three months,” he said, pointing out as well that even the Finance and Budget Commission had the better part of two months to look into recommendations for cutting $2.5 million from the budget “to at least start to bring us some movement on this issue.”

“That said I think it makes all the sense in the world to follow what Rochelle [Swanson] is saying, to keeping the momentum going here to ask Steve [Pinkerton] to design a workshop for us next week that begins to frame the questions that he believes that he needs to frame to get input from this council so that he can start learning our values and our approaches and we can starting hearing from Steve how he would go about this process,” the Mayor said.

Some people suggested, in response to pushing back the time frame, that there was nothing magical about the September 30 deadline.  This is an accurate statement, but it misses several crucial points, not the least of which is that that is the date that the council gave the city manager at that time, Paul Navazio, to come forward with proposals for cutting $2.5 million.

We believe there was more than ample time to do as the Mayor suggested, at least come forward with some sort of proposal, even if it was not all the way to $2.5 million.  The Mayor was being more polite that we were last weekend, but essentially saying that it was unacceptable that there were no numbers or proposals that were presented to council by their prescribed deadline.

At the very least, the council needs to find funding for road maintenance this fiscal year.  Currently we have $250,000, which is probably one million short of what is needed just to prevent falling further behind.

—David M. Greenwald reporting

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