Earlier in the week, the Vanguard highlighted problems with a consent item on the budget which was listed as an informational item, but, however, included at least one critical change in council policy with regard to the personnel compensation cuts.
In addition, there was another consent item which established an individual management MOU for fire management employees.
To our knowledge, this is the first public reference to the merger being on hold, though the Vanguard did report on this fact a week and a half ago.
The staff report further notes, “During the last round of negotiations, the previous management incumbents of the Fire Department requested the City pull the Fire positions out of the Individual Management Employees MOU and create a separate contract for these employees.”
Rich Rifkin spoke before the council during public comment on this item and noted some problems with the contract, as it sets a precedent for future contracts, despite the fact that the position is currently vacant and therefore is a non-bargained contract.
He was critical of the fact that the new MOU fails to reform retiree medical.
As he wrote earlier this week, “It continues to allow someone age 50 to retire and cost the City up to $21,000 per year (plus medical inflation per year) for 15 years before he becomes eligible for MediCare. After age 65, the cost to the City for his premiums will drop. MediCare picks up part of the bill and most people 65 and over don’t have minor dependents and more are widowed at that age.”
He also hit on another problem as he saw it.
“There’s a savings from $2000 to $1200 for the annual uniform allowance,” he said. “I started thinking about it, $1200 every year for every firefighter is a really lot of money. I mean do they need to spend $1200? It seems to me that’s ridiculous.”
“Every single year they need that? That’s $60,000 – it seems like a big waste of money to me,” he added.
The council, upon further reflection, pulled the item off the consent calendar and decided they needed more discussion in closed session.
In the meantime, the budget update was pulled from consent and discussed.
“I think on November 29 when we did our quarterly update, we also foreshadowed everything you see on this mid-year budget other than the fact that it looks like our sales tax revenues are up a little bit, but other than that it was pretty much what we reported when we were making all of these changes back in late November,” City Manager Steve Pinkerton said.
“Until we’re further along on our MOUs, it’s kind of hard to determine what else is really changing in our budget outlook at this point in time,” he said.
He suggested it would be another six to eight weeks before there is something else to report.
“So much of what we’re doing is tied up in labor now,” Mr. Pinkerton added.
The council would pass the item, however, fifteen minutes later Mayor Joe Krovoza would move for re-consideration.
Mayor Krovoza noted the same paragraph that the Vanguard had earlier in the week, which ended with the statement, “implementation of additional personnel reductions are being deferred pending the outcome of current labor negotiations.”
“I believe that part of that sentence beginning with ‘implementation’ is not a policy that has been adopted formally by this council. So as this is a budget update, [and] I’m uncomfortable with that language being inserted in there.”
“How personnel reductions happen and when they happen is a bigger issue for the discussion of this council,” he noted. “Even if this is just saying that they’re put off.”
He moved to strike that section and adopt the rest of the report.
Mayor Pro Tem Rochelle Swanson seconded the motion.
“The idea is just that that’s a significant policy move,” the mayor said. “It might be where we are, but it’s a policy piece that I don’t want included in what’s in an informational report.”
Councilmember Wolk noted that the word “while” at the beginning of the sentence should also be removed.
Council agreed. And the last sentence now reads, “These expenditures were intended to be off-set by corresponding General Fund personnel reductions.”
This may seem nitpicky, but council has never made the decision to defer personnel reductions until after the labor negotiations.
In November the city proposed proceeding on a track that would yield $2.5 million in annual savings and at the same time address current needs, from the perspective of an all-funds budget rather than simply general fund savings. This would also ensure that, going forward, the budget would include full funding of street maintenance at a minimum of $1 million, full funding of Other Post Employment Benefits (OPEB) required contributions, and a set-aside for potential increases in CalPERS (California Public Employees’ Retirement System) contribution rates.
In February, Paul Navazio, the city’s finance director, told the Vanguard that through various mid-year re-organizations and reductions, they are expected to realize an annualized savings of $1.7 million from the all-funds budget, with the general fund savings that are expected to be around $400,000.
“We are proceeding with our analysis of additional potential cost-savings through issuing RFP’s for several maintenance activities, to include parks, street lighting, and elements of utility operations,” Mr. Navazio additionally told the Vanguard.
He added, “We are also developing additional budget reductions that would need to be implemented in order to achieve the needed level of savings – pending outcome of our labor discussions as well as in the event that we are unsuccessful in renewing the Parks Tax.”
For the current year, the city is ensuring that they have sufficient funding in the budget to proceed with $1 million in street contracts to be let this spring.
Additionally, Mr. Navazio reported that they are developing their 2012-13 budget which would “include ongoing, full-funding, of street maintenance, OPEB obligations and CalPERS set-asides.”
He said, “This will ensure that we are including these ongoing expenses within a balanced budget framework for 12/13, and can be supported on an ongoing basis (ie these have also been built into our 5-year forecast).”
“When we present our mid-year budget update to the City Council we will provide an update on the alternatives for achieving the required budgetary savings – again, pending the outcome of our labor negotiations – where we discussed with the Council as being the appropriate place to engage with the goal of either fully-funding our current benefits, or alternatively, restructure our compensation package so that its costs can be sustained with existing resources, along with the other needs identified by the Council and supported by the City Manager,” he added.
City Manager Steve Pinkerton told the Vanguard that the talks with the various bargaining groups will be heating up soon and that the city is hopeful that this process will help shape the future cuts to reach the $2.5 million.
But nowhere in this report is there any mention that personnel reductions would be suspended. Given that the council took an overt action in June 2011 and amended it in November, it would seem that an informational report buried in the consent calendar is insufficient.
The personnel cuts were supposed to go toward shoring up unfunded liabilities in retirement health care, a preemptive move for the expected rate hike that would hit from CalPERS, and one million to fund street and road maintenance needs that would have been unfunded otherwise.
From a procedural standpoint, the council could not implement a policy change in an informational item. They have now rectified that problem.
However, from a policy standpoint, the council has, in our view, put itself in the tough position of needing to get huge amounts of savings from a single-round of bargaining with all of the units over the next four months. This is a classic case of putting all of one’s eggs in one basket.
We believe that several of the bargaining units are headed to impasse and we hope that ends up better than it did the last time.
For a budget cycle that started with a lot of promise, this has been a most disappointing development.
—David M. Greenwald reporting
My bet is that they won’t reach the 2.5 and what will be the ramufication?
“My bet is that they won’t reach the 2.5 and what will be the ramufication?”
That is up to the voters.
so true……
[quote]Council agreed. And the last sentence now reads, “These expenditures were intended to be off-set by corresponding General Fund personnel reductions.”
This may seem nitpicky, but council has never made the decision to defer personnel reductions until after the labor negotiations.[/quote]
It is not nitpicky, it is being accurate. Kudos to the CC for getting this right…
[quote]However, from a policy standpoint, the council has, in our view, put itself in the tough position of needing to get huge amounts of savings from a single-round of bargaining with all of the units over the next four months. This is a classic case of putting all of one’s eggs in one basket.[/quote]
Your suggestions on what the CC should be doing differently?
You two think that we’ll realize we’ve elected people who won’t make the decisions needed to fix things and who might end up making thins worse though procrastination, then we’ll elect some different folks to solve things? Seems as though we’ve been through this cycle before.
Thanks for this report, David. After I spoke in public comments about that item on the Consent Calendar, I walked home (15 minutes), and in the interim missed the part where the Council took up the Consent Calendar. So until reading your article I did not know what they did about the proposed Fire Exec. Management contract.
I suppose you will report on the Crown Castle business, tomorrow. But needless to say for anyone who watched the meeting, all of the passion and energy in Davis is against permitting that project. The Council is in a very tough spot, given the state and federal laws described by Harriet Steiner.
[i]”… all of the passion and energy in Davis …”[/i]
I might add that with respect to the Crown Castle question, I personally have no passion one way or the other about it. I suspect most residents don’t really care. But those who do, they care very much to not have [b]DAS ([url]http://en.wikipedia.org/wiki/Distributed_Antenna_System[/url])[/b] in Davis.
[img]http://upload.wikimedia.org/wikipedia/commons/4/4a/Videotron_DAS.JPG[/img]
[quote]I suppose you will report on the Crown Castle business, tomorrow. But needless to say for anyone who watched the meeting, all of the passion and energy in Davis is against permitting that project. The Council is in a very tough spot, given the state and federal laws described by Harriet Steiner.[/quote]
That is how I saw it too. The fact of the matter is the city is being sued, and if the city is not careful, its actions of noncompliance with current law could end up backfiring on the city. If the city on the other hand, makes good faith efforts to work on coming to a reasonable settlement of the issue with Crown Castle by agreeing to at least some noncontroversial antennas at a good deal of the sites, the city has a much better case in court. The city is in a terrible legal position here, and has to be very careful how they proceed…
I’m going to make a prediction that the City Manager will follow the practices of the last 2+ years in making personnel (cost?) reductions. Eliminate any position that is vacant, whether the position is warranted or not. Protect the positions (particularly in departments favored by the CM/HR Director), whether the workload continues to warrant those positions, or not. To the extent that the latter doesn’t work, transfer the affected employee to a vacant position (that would otherwise been eliminated) in another department, whether that employee has the background/qualifications to fill the position, or not. Make up the balance of savings sought, thru employee compensation concessions. Protect certain individuals by promoting them to avoid layoff protocols.
Probably will take a year or two to see if my prediction is correct, or not.
My prediction? Pain ([url]http://www.youtube.com/watch?v=DJnKm6ftPu0[/url])!
Agreed, but suspect it will partly be “targeted” pain.
Hpierce
Appreciate your candor as I suspect it comes from more knowledge than the rest of us have. And my comment after spending my career in private healthcare, this would very rarely be allowed to occur in the private sector. There are inequities but not to the extent you describe.
If we can’t rely on a (more highly paid) CM to make the tough decisions, I was really hoping that certain members of the CC would, especially the two not up for reelection this time. But it does not appear to be so. Alas. David says use your vote; just saying says, ?again
“Your suggestions on what the CC should be doing differently?”
Carry out what they passed in November. They have allowed this to back slide and they are putting all of their eggs in the basket of MOUs, I think we will be far short in July of where we had hoped to be.
Rich: Tomorrow I will report on Crown Castle. I agree largely with your take. It is a much longer article to write and I think this is the more important item. The counsel is largely tied on Crown Castle unless they get someone in congress to change the Telecom Act.
[b]@Rich Rifkin:[/b]David Greenwald conveniently neglects to point out that I made a motion specifically to schedule another closed session on the fire chief contract to be sure that we get it right. I had talked with our labor negotiator during the week about the wording of this MOU, and about the options regarding delaying the payment for retiree employee health insurance coverage until medicare age.
FYI David, this is an idea that I brought up years ago, and that I originally mentioned to Rich Rifkin.
Why “conveniently neglects” – it was intentional, I didn’t have the recorder on for that, so I had reconstructed it from my faulty memory with my attention partially diverted by my shadow.
David: [i]”Carry out what they passed in November.”[/i]
Don’t they have to reach agreement, or impasse, with the unions first? Or are you saying the city should just impose staff reductions at the same time they’re trying to extract reductions in pay and benefits from the unions? How would they know how much staff they need to reduce to achieve their cost objectives if they don’t have new contracts in place (or last-best-offers)?
These are genuine questions, not rhetorical, because I confess I haven’t looked back at the previous articles to see what exactly the council directed in November.
I agree with Don, I don’t see how this is a bad thing. I don’t think the council is necessarily putting all their eggs in one basket here. I don’t think they believe they will achieve the entire 2.5 million in savings from the MOUs. Rather, I think that by waiting to acheive just how much savings they achieve will help them make better decisions as far as program/staff reductions. Plus, I have to believe that if they’d implemented the 2.5 million in reductions before the conclusion of the negotiations, the bargaining units across the board would be much more resistant to making any concessions. So by waiting, they’re actually going to be able to reduce the number of layoffs which is a good thing. I also agree with HPierce in that with regards to layoffs, the pain is going to be targeted pain and that target will primarily be rank and file. David, you’ve always claimed to defend the rank and file. Well, it looks like rank and file positions will probably be saved by delaying this until after the MOUs are finalized. Unless you were in favor of the layoffs? I mean how else do you propose they achieve the savings? The existing contracts are a done deal, there is no reopening them. I don’t think the employees would never agree to reopen them (especially to the tune of 2.5 million in concessions in the last year of their contract) unless they were guaranteed no layoffs and I don’t think the city would ever sign off on that. I think this is a much smarter and more level headed approach. I don’t think things have gotten to the point of taking rash actions just yet. I think Mayor Krovoza’s motion in June was overzealous and overambitions. I think he’s just looking for more distinctions to be added to his resume as he climbs the political ladder. Davis is merely a temporary wrung on that ladder, he’s got his eyes focused on a bigger prize.
[i]”I think he’s just looking for more distinctions to be added to his resume as he climbs the political ladder. Davis is merely a temporary wrung on that ladder, he’s got his eyes focused on a bigger prize.”[/i]
Fairfield?
[img]http://www.fixfairfield.org/SIGN.jpg[/img]
[quote]Fairfield? [/quote]
Try county level, and then state level….after that is anyone’s guess.
[quote]Don’t they have to reach agreement, or impasse, with the unions first? Or are you saying the city should just impose staff reductions at the same time they’re trying to extract reductions in pay and benefits from the unions? How would they know how much staff they need to reduce to achieve their cost objectives if they don’t have new contracts in place (or last-best-offers)?
These are genuine questions, not rhetorical, [/quote]
I was wondering the same thing…
Two answers as I wrote this morning.
$2.5 million is the start of what needs to be cut. The ultimate number is over $7.5 million.
Second, the money was needed to go toward funding road maintenance and reducing the unfunded liabilities for PERS and OPEB.
For me, the MOU process is only one part of a much bigger picture.
It should be made clear… elimination of positions (layoffs), elimination of vacant positions, and similar actions, are in the sole discretion of City Manager (on behalf of CC). Changes in compensation, benefits, etc., are subject to consultation/negotiation with employee groups.
[quote]Second, the money was needed to go toward funding road maintenance [/quote]Yet, four positions (3 of which were vacant) were eliminated that provided for transportation (street, including striping) maintenance.
But the council is the one with the purse strings and they voted to cut funding by $2.5 million last year and it never happened.
[quote]$2.5 million is the start of what needs to be cut. The ultimate number is over $7.5 million.
Second, the money was needed to go toward funding road maintenance and reducing the unfunded liabilities for PERS and OPEB. [/quote]
But you don’t say HOW this is to be done, now that the fire department merger seems to be on hold…
I laid out at the time and over the summer how it could be done, but the point is that it wasn’t done.
[i]”How would they know how much staff they need to reduce to achieve their cost objectives if they don’t have new contracts in place”[/i]
Of course this is a valid question but one that lays bare the fundamental reason we are in this mess. It is a mindset of government to spend all it can get.
Here is how it should work… at all times… continually…
1.Identify and prioritize the work products and their quality and delivery expectations.
2.Design the most efficient work processes to produce the products meeting the quality and delivery expectations.
3.Start a continuous improvement loop to always strive to do more with less.
4.When faced with revenue downturns that result in the inability to cover expenses, cut lower performing employees and lead the remaining workforce to demand greater performance and sacrifice to continue to meet production expectations while balancing the budget.
We are already at #4 and so we need to quickly do #1-#3.
Then we need to keep doing #1-#3 so we don’t have to hit #4 again.
[quote]I laid out at the time and over the summer how it could be done, but the point is that it wasn’t done—.[b]David Greenwald[/b][/quote]Could you please restate your exact plan, David?
I seem to remember that you essentially suggested that we give employees an ultimatum to either take immediate compensation decreases before their contracts expired or else we would lay off a large number of employees.
Please restate your plan.
[quote]4.When faced with revenue downturns that result in the inability to cover expenses, cut lower performing employees and lead the remaining workforce to demand greater performance and sacrifice to continue to meet production expectations while balancing the budget.–[b]Jeff Boone[/b][/quote]We are not allowed to do this. We are required to lay off employees according to least seniority within groups that are already identified.
[i]”We are not allowed to do this. We are required to lay off employees according to least seniority within groups that are already identified”[/i]
I know Sue. I was being idealistic. It is too bad though. Seniority should be a factor, but certainly not the only factor. I think most of the private companies I worked for in my career would have folded during a downturn having seniority as the only retention factor.
[quote]I laid out at the time and over the summer how it could be done, but the point is that it wasn’t done.[/quote]
But that was before the fire dept merger fell through/was put on hold. So now what?
“But that was before the fire dept merger fell through/was put on hold. So now what?”
I don’t think the failed merger is a game changer on this.