Jon Li’s Vicious Attacks on City Manager Appear Unfounded

Vanguard Believes Leaks From Disgruntled City Employees Driving Some It

The attacks on City Manager Steve Pinkerton began hot and heavy on December 5, 2011 from Jon Li, even before the city manager had finished a three-month period that saw both the implementation and the revocation of water rate hikes in advance of a massive surface water project.

Mr. Li argued that Steve Pinkerton both tells “too many stories” and “doesn’t care to hear anybody including Department Heads.”  He also claimed that there are four city council votes to support Paul Navazio for city manager.

In his missive, Jon Li describes Steve Pinkerton and Joe Krovoza as “soul mates” joined at the hip.  In this and other missives it is clear that one of Jon Li’s chief concerns is economic development, and he argues, “Pinkerton’s claim to fame is what he has done in economic development.  His experience aside, three months into the job, Pinkerton still doesn’t actually know anything about the Davis economy.”

Jon Li has stepped up his attacks since the New Year began.  In later writings, Mr. Li argues, “Pinkerton isn’t a real hands-on manager who builds trust among his staff.  The less Pinkerton actually knows about the City of Davis, the better he likes his decisions, ‘independent’ thinking, actually unrestricted power without responsibility.”

He adds, “He and the HR are independently redesigning the entire city bureaucracy without regard to Department Heads or the affected employees.  Everybody is confused, then Pinkerton wins.”

One of the big charges that Jon Li makes has to do with a remodel in the city manager’s office.

Mr. Li writes, “Pinkerton wants to be so hidden in the far back corner away from contact with other city employees (let alone the public) that he doesn’t have to deal with any of the consequences of bad decisions and actually talk with or get to know the people he is ordering around.  Only Krovoza will ever be able to break through the layers of secretaries to talk with Pinkerton at all.”

He adds, “A re-organization designed exclusively to benefit Pinkerton at the expense of every other person who works for the City of Davis, or is a resident of Davis, except of course for Krovoza.  It isn’t handicap accessible, but then why should someone in a wheelchair have the right to meet in the City Manager’s office?  Who cares if the city manager’s office is not compliant with ADA? It’s only a 22-year old federal law.  Why should Pinkerton care?  Talk about transparency in local government(?)”

The Vanguard received an email from someone who spoke with a number of people who apparently verified some of Mr. Li’s charges and argued that we may have a serious problem with the new city manager. He cited, specifically, the money being spent to create a new City Manager’s office at the other end of City Hall.

As the Vanguard looked into the charges, it became clear that, while Mr. Li was clearly getting information from employees who are either leery of change or disgruntled, much of his charges fall flat.

Jon Li clearly was not happy when Paul Navazio was passed over for city manager.  He is also clearly critical of the direction that the city has taken on economic development.  But in the Vanguard’s inquiries, we do not see a city manager running amok, but rather a city manager who is out front in making changes and acting very responsively to the needs and direction of all of the councilmembers.

Contrary to the claims of Jon Li, the efforts at re-locating the City Manager’s office are part of a much larger and broader re-organization effort that the city manager believes could save the city as much as $500,000 by consolidating duplicative operations.

These ideas were actually presented to the city council as recently as November 29 of last year, as part of the budget workshop.

Instead of having the Finance Department and Parks and Rec Department separately collecting money, the idea is to create a one-stop permit center within City Hall.

There is also a plan to relocate Public Works engineering, inspections services and capital project planning to City Hall, consolidate Traffic Engineering with Transportation planning within City Hall, and relocating the Information Technology division back to City Hall as well.

In order to do that, these plans require a re-configuration of office space within City Hall.

According to information that the Vanguard received form the city, Public Works engineering, inspection and capital project staff will be co-located with Community Development staff.  This will require the moving of Finance and the City Manager’s office.  Those will be relocated to the eastern end of City Hall.

That reconfiguration will also allow the city councilmembers who currently have to share a tiny office to have more space for meeting with constituents and it will allow for a conference room which would facilitate meetings.

Community Services will move to the city space in the county building at 600 A Street, where the Recreation public counter will be.

The cost of this project is a rather modest $156 thousand, with the expectation of annual savings in excess of $450,000 (General Fund), and in excess of $1.7 million in All Funds savings.

But this comes with a cost, as well.  The plan calls for the reduction of perhaps as many as 14.1 FTE (full-time equivalent) positions in the city.  That means that some employees will face layoffs in the reorganization efforts and that is obviously creating some anxiety.

Also, moving people around or even out of the building is also part and parcel of this rearrangement.

The Vanguard was told this was one of the first things that Steve Pinkerton proposed when he came in as city manager, and he saw it as a quick and relatively obvious way to save the city a lot of money and fix a number of other problems.

Naturally, when a city manager comes in with clear mandates to make changes that will impact many people, there is going to be anxiety and anger.

But what became very clear at the State of the City Address is that Steve Pinkerton is one who is a straight-shooter and, unlike predecessors, is not going to sugar-coat things.

We noted that first in his first budget talks, where he did not beat around the bush, he attacked the issues and offered few excuses.

A perfect example is his discussion of the budget at the State of the City Address.  The good news is that Davis skipped the 15 to 20 percent drop in property tax revenues.

“We’ve got flat revenues, the challenge of course is… expenses never stay flat,” he said.  “The biggest ones for us are employee-related expenses, namely the ones you’ve heard about over and over again… pension and retiree medical.”

Here, CalPERS (California Public Employees’ Retirement System) offered the city manager an out that other councils and city managers would have jumped on – but Steve Pinkerton did not blink.

“The sort of good news on the pension side is that we’re getting projections from our friends at CalPERS… the folks at CalPERS claim that they have enough money at the moment and that they’re not going to increase our rates over the next two years,” he said.

Instead, he argued, “We think they’re wrong.  We think they’re basically doing that so that they don’t have to give the state an increase in their rate this year so they don’t contribute to the state budget deficit.”

He added: “But we think they’re in complete denial.”

“Long-term, what’s happening with CalPERS is completely unsustainable,” he continued.  “There’s no way they can ever meet their obligations and so at some point in the next five years they’re going to come clean and there’s either going to be a ballot initiative or some legislative change and both future employees and existing employees are going to see some reduction in the accounting methods – it’s just not sustainable.”

He hopes this realization comes before they hit the city with a 30 to 40 percent increase in our contributions rates.  “There is some point in time when the fiscal laws of nature are going to catch up with [Cal]PERS,” he said noting that non-PERS cities are having to increase their rates by as much as 70 percent.

It was straight talk from Steve Pinkerton, and it was refreshing to hear.

At the same time it does not take a rocket scientist to figure out the problem here.  The council has made it clear that they want real budgets, that reflect not only costs but unmet needs.

But those costs are going to come at the expense of current and future employees, about whom Mr. Pinkerton said “there is either going to be less money for employee salaries because we’re setting it aside for their retiree medical, or they’re going to take less of the benefit in the future.”

“So, one way or another we’re going to get that under control,” he added.

All of the employee contracts expire on June 30, he said, “so we should have a lot of fun between now and then.”

To a good extent, that is what is driving the information leaks to Jon Li.

In order to get to these places, we are going to see major changes in city government, and some people are going to lose their jobs.

The final piece of this is the charge that Mr. Pinkerton is simply Joe Krovoza’s “lapdog.”  In seeking out this question, the Vanguard spoke to each of the five Davis city councilmembers, three of whom were willing to go on the record.

The sense we got is that all five councilmembers are behind the city manager on this reorganization effort.  They are as united as they have ever been on the budget issues.  And Mr. Pinkerton is very good at finding out what the council wants and making it happen.

Not only did the councilmembers we spoke to believe it was ludicrous to suspect that Mr. Pinkerton was anyone’s lapdog, but we know that, if there were that sense, the councilmembers would be taking issue with that and calling him to task.

Instead, what we see is very strong, almost glowing support for Mr. Pinkerton.

When we talked to Sue Greenwald, she called him a “straight shooter” and said he has been by far the best city manager that she has had to work with.

In a written statement to the Vanguard, “I’ve been very impressed with Steve Pinkerton’s intelligence and extraordinary breadth of knowledge.  I think that Steve Pinkerton and Paul Navazio make an excellent team.”

“Walking into a job as city manager today is a no-win situation, much as it is to be a councilmember.   When times are rough and tough choices have to be made, people will tend blame the person in charge even if that person did not create the problem,” she added.

“Immediately upon taking the job, Steve has had to deal with our budget problems, labor negotiations, the dissolution of the redevelopment agency which is a huge blow to the city, the massive surface water and wastewater projects and  an ongoing departmental reorganization.  Unfortunately, this has not left any of us much time to do the more proactive work that we most enjoy,” she added.

Councilmember Greenwald concluded: “I think Steve is going to be a great city manager, but we have to accept that these are difficult times.”

The bottom line is that he does not play games, he is upfront when he disagrees with people, and he does not appear to take policy disagreements personally.  Moreover, he is genuinely looking to see what the council wants to do, and trying to find innovative ways to carry it out.

That is not to suggest that he is perfect.  It was not a good move for him to make, policy-wise, to take such a large salary.  While some may question if the city can really afford that, a good city manager can make up that difference.  However, from a perception standpoint, it was bound to create animosity with city employees that he would be asking to make sacrifices, if it were viewed that he got a pay raise.

There is also the perception that he was brought in to be the hatchet man, which of course started him off on the wrong foot.

But what is clear is that he has the very strong backing of council.

Mayor Pro Tem Rochelle Swanson told the Vanguard, “I believe Steve Pinkerton has made some real progress instituting practices to achieve better economic vitality & sustainability that this Council wants to see.”

“He has also prioritized improved customer service to our citizens within the limited budget and resources,” she said.

Part of the problem has been some of these things have gone on in the background, and the public has not been aware of it.

“Much of the progress is in the works and the results may not yet be apparent to the outside observer. However, there have been specific items where his insight and background has guided council and/or staff,” Ms. Swanson added.

“He has already taken decisive action in a timely manner. Considering the major issues we have tackled in the last 4 months — most notably water — I think he has made a good start,” she continued before noting, “of course there is still a lot he will continue to learn about our community.”

Councilmember Stephen Souza commented to the Vanguard, “Steve Pinkerton has been a wonderful addition to our city government and our community. My hope is that he stays with us for a long time and we will all be better off.”

The city still has a real problem with communication.  That was very apparent during the water debacle, and other issues that preceded Mr. Pinkerton’s time there.  The fact that the city had not released details of the reorganization to local media sources represents an ongoing problem that Mr. Pinkerton and the council desperately need to address.

However, from our perspective, we do not believe that the words of Ms. Greenwald, Ms. Swanson or Mr. Souza would be nearly as positive if they perceived Mr. Pinkerton simply to be a lapdog of Joe Krovoza’s.

It is clear that the city manager enjoys very strong support from his council, and that many of the perceived problems may actually be anxiety from rapid change.  But it is clear that the city has to make major changes to plan to provide the same level of services with much less in the way of resources.

To do that, you have to break some eggs.  Jon Li is probably not happy that his guys did not get the jobs he wanted for them, and has lashed out against the current occupants of those offices.

There are clearly some issues below the surface that will need to be worked out, but I see nothing to suggest that there is a serious problem with the city manager.

Jon Li makes a suggestion for an economic strategy session involving several hundred people, but writes to Mr. Pinkerton, “I do not expect you to be there.  I expect you to be looking for a job.  You didn’t pass probation.”

The Vanguard at this point disagrees, and more importantly, so do Mr. Pinkerton’s actual bosses.  It will be interesting to see just how this plays out.

—David M. Greenwald reporting

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