This week the Davis City Council passed a budget that, with very little attention or fanfare, made huge in-roads into making this community more sustainable.
The new budget proposes perhaps as much as eight million in cuts, in order to deal with increased costs for pensions and OPEB (Other Post-Employment Benefits), to shore up infrastructure expenditures, and to deal with future hurdles that will come our way.
At the same time, the decision to lay off nine DCEA (Davis City Employees Association) employees, in particular, tree trimmers, has some segments of this community up in arms.
Councilember Dan Wolk, in particular, took great pains to support but yet question the approach.
“I commend you for making this serious proposal,” he said. “The fiscal imbalance that we face really threatens that foundation to the community that my kids are going to grow up in.”
At the same time he was highly critical of the budget, as it lacked both community involvement and shared sacrifice by the community.
“To me it makes it a better way of moving forward,” he said. “This budget, essentially it’s not very creative. It doesn’t feel very community-driven. It takes maybe a more adversarial stance toward the employee groups than I think we necessarily need to take.”
“It took us years to get into this situation and it will take us years to get out,” he said. “We don’t necessarily have to accomplish everything with this one budget.”
He argued that part of shared sacrifice was sacrifice by the community.
“This community could embrace, as long as it were coupled with structural changes, I think this community could accept additional revenues measures. I think this community could accept an increased parks tax,” he continued.
He concluded, “I think we can do better as a budget.”
He added, “The budget reflects your community’s values and I think we can do better than this.”
But can we? I will start with one critical point here. I believe that the first cuts should not have been to rank and file workers but rather to both management and the firefighters, who have taken more than their share of the unsustainable budget over the years.
At the same time, DCEA has put the city in a tough position by refusing thus far to take the same cuts that the other bargaining units have taken.
That said, in the end, I find myself having to disagree with much of what soon-to-be Mayor Pro Tem Dan Wolk said on Tuesday.
First, the reason this budget is not community-based is that the community has not engaged on this issue. Now, I am not sure whom to blame for this. We can argue that the city has failed to engage the public. We can argue that the previous council and past city management has downplayed the severity of this crisis. Or we can put the onus on the people themselves – arguing that they are asleep at the switch.
The evidence is a bit limited here, but I will make this point.
There have been two times when the public has engaged on the budget issues. Last year when the council voted to close down the Community Pool and cut funding for the ACME Theater – people actually showed up to complain.
Likewise, the public became engaged this year when nine DCEA employees were laid off and they protested the decision to cut the tree trimming position.
What we can take from this is that the public will only focus its attention when the cuts are specific and they affect people directly.
On the other hand, the budget workshops last August were sparsely attended. A few years ago, the Vanguard hosted a community forum on the budget, and about 50 people showed up.
And yes, we can argue that August was not the appropriate time for community outreach. That the city’s communications system is old and antiquated. That the city failed to conduct proper outreach.
But the fact remains that we get more people into council chambers when we discuss a zoning change or a housing development than when we talk about cutting millions from the budget.
So I would argue that the reason that the budget cutting discussion has not been community-driven is in part because, except when it comes to very specific cuts, the community has not engaged on this issue.
Secondly, Mr. Wolk argued that “it took us years to get into this situation…” That is the argument that Stephen Souza made this year during the election campaign, and it is the argument that the council majority used over and over again to attempt to stall change.
So in 2009 when the proposal was an $850,000 cut, when Lamar Heystek argued it should be $1.57 million, in 2011 when Mr. Wolk was the deciding vote in the $2.5 million cut – we could argue that we did not have to do this all at once.
The problem is that none of those cuts were actually fully implemented.
So now the clock is ticking and we have $15 to $20 million in deferred maintenance, and we have a quarter of our payroll going to retiree health. We are paying $1.7 million for people not to receive health insurance.
We are going to have to pay for $65 million in unfunded liabilities for OPEB and another $70 to $80 million for unfunded liabilities for pensions.
We have been stalling for four years because we can’t do all of this at once, until we now find ourselves under the gun that if we do not act now we could become another Stockton and Vallejo.
Mr. Wolk is wrong on this point. We do have to act all at once. Why? Because by 2015, bills are coming due. Because we did not implement the $850,000 reduction in 2009, we didn’t implement the $2.5 million reduction in 2011, so now we HAVE TO implement the $4 million reduction in 2012 because that is when we have our MOUs.
Stephen Souza, in his final comments, pleaded with the council, “Please don’t balance the budget on the back of all of our employees for the needs that are not generated by those employees. By that, it’s our infrastructure, that’s our responsibility as citizens in my opinion.”
The problem is that, while infrastructure needs were not specifically generated by the employees, in compensating our employees we failed to properly fund our infrastructure needs.
This was part of the council majority’s doing and Mr. Souza needs to take some responsibility for it. Remember what in 2008 was a $13 million unmet needs category? Well, most of that consisted of items considered off-line from the budget because we could not fund them.
And yet, at that time Mr. Souza bragged during his 2008 re-election campaign, about balancing the budget with a 15% reserve.
The reality is that between 2005 and 2008, employee compensation shot way up. The city had passed the half-cent sales tax as a way of bridging the funding gap caused by the loss of state funding. Instead, we turn around and give that $3 million in additional revenue as added compensation to the firefighters who helped Mr. Souza, as well as Don Saylor, Ruth Asmundson and Ted Puntillo, get elected.
The city somewhat made do through one-time funding from the state and federal government for maintenance, transportation, and other infrastructure needs.
To be sure, the city has lost access to the one-time funding stop gap measures the state and federal government had been giving for road maintenance. But in reality, that funding was not sufficient anyway. We were funding road maintenance, for example, at less than half of what was needed just to keep up the current level.
Last year that finally took us to zero. In order to shore up that funding, the only place the city could go was to employee compensation, as it represents 80% of the general fund spending.
The reality is that we knew about the road maintenance problems going back as far as 2008 and 2009, and our leadership failed to act.
Well, now the bills are coming up and the new council needs to act decisively to prevent use from following in the footsteps of Stockton and Vallejo.
In other communities, such as Sacramento, the firefighters have cut deals with the city to avoid 40 layoffs. The firefighters receive by far the highest average level of compensation of any of the city’s bargaining units and yet the firefighters have been an impediment to reform in this community for years.
The result is that the people who are going to suffer are going to be rank and file public workers and other employees who make between $50,000 and $60,000.
This may not feel like a community-based solution, but what choice do we have right now? We have a crisis, the community has not engaged on this issue, and time is running out for action.
For all of the complaining about the process however, both Stephen Souza and Dan Wolk understood one thing – they had to do this. That is why the council voted unanimously to put the community back on the road to fiscal sustainability.
We have had great progress in the last four years with this new council.
As Mayor Pro Tem Rochelle Swanson said, “I commend that we’re at a place where we’re not talking about tier cuts anymore. That we’re at a place where we’re not talking about living off of one-time spending where that’s how we decided we’re going to repair our streets or bike paths.”
We are not there yet, but with these actions we are much closer than we have been.
—David M. Greenwald reporting
I still see that unnecessary fourth member on the two trucks racing off to non injury accidents, over and over.
When is this going to change?
As you should know better than most, it’s a collective bargaining decision.
I cannot really find anything to quibble about in this excellent article. It is spot on, and well balanced. I would add that I have noticed the deterioration of our streets, both in Davis and outside Davis. I suspect things are going to be rocky for a while…
David
Good…..and sad article …. thanks for both the balance and the tone.
This is a great article David raising a number of good points. The main reason why the tree trimmer cuts have been considered egregious is because the community felt that they were strongly supporting and paying for protecting our urban forest when they voted 84% for the recent Parks Tax. We made clear that we were will to pay to protect those services, however within 24 hours the City tree crew was eliminated by the City Manager. Who could possibly have anticipated such a cut with a Parks Tax that passed so strongly?
I agree with your point David that cuts should have been made from the high paying administrative and management levels and I have gotten a great deal of feedback from people who are in complete agreement with this point as well. Instead of cutting a few very high paying administrative or management positions that we can afford to cut, the City, instead, cut 2-3 times as many service positions that we really needed to retain.
An excellent letter was in the Davis Enterprise last Wednesday which spoke to these concerns by Mary K. Williams. I posted it once but for those of you who many not have seen it I am posting it again. It has a great deal of interesting points and data relevant to this discussion. I am including the web link to the letter as well.
http://www.davisenterprise.com/opinion/letters/we-need-facts-on-city-layoffs/
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We need facts on city layoffs
I will be attending the City Council meeting this week to hear comments regarding the recent dismissal of employees, directed by City Manager Steve Pinkerton. I am especially concerned about the dismissal of the two remaining tree trimmers, particularly since the announcement was made immediately after the tax assessment for parks was passed. And, there is no apparent plan in place to care for the city’s trees and to maintain levels of service in our parks.
In this time of fiscal concern in the city of Davis, I find it interesting that Pinkerton, when hired in 2011, was paid at the 95th percentile of cities within our three-county comparison with average experience and had no particular performance goals that demand a high salary. There was a 35 percent pay increase between the old city manager in 2009 and this new city manager in 2011, a $45,000 difference. Why?
I also note that between 2000 and 2008, salaries rose far faster than the city’s tax revenue. A large amount of increases came to upper management rather than rank-and-file employees. Who provides most direct city services — upper management or rank-and-file employees, and whose salaries come cheaper?
I believe Pinkerton’s cost-cutting employee reduction should be thoroughly questioned and explained to the public. Why are cuts being made to the rank-and-file employees rather than to management? What, exactly, is the plan for the city’s trees and park maintenance? How can Pinkerton work more effectively and harmoniously with collective bargaining units?
Furthermore, I believe the City Council should have a clear vision and given direction for the city manager in dealing with the fiscal issues of Davis and management of employees. Does the City Council value and cultivate an amicable and cooperative relationship with city employees? What is the charge of the City Council to the city manager? The public deserves transparency in all of these issues. I will be a voice insisting on this.
Lastly, public perception in our city’s politics means everything! Facts and figures and response to the public from the city of Davis regarding this current topic of employee terminations has been slow in coming. Why?
Mary K. Williams
Davis
There is a lot mentioned here about community participation, community sacrifice etc., but no suggestion of a very practical way for the community to do engage in so doing. What that practical way for the community to participate is known as Participatory Budgeting which originated in Spain, and is practiced in Brazil by over 250 large and small municipalities. Of few communities have begun to implement participatory budgeting in the U.S. Most recently, the Vallejo, CA City Council voted that Participatory Budgeting would be used for deciding how 30% of the increased income from a sales tax passed last Nov. would be used, and Vallejo is the first city in the U.S. to approve a city-wide Participatory Budgeting process. Please go to http://www.participatorybudgeting.org for more information. Once I spoke about this with some City Council members and was told, shockingly, that the budget was too complicated for “ordinary” folk to understand. Imagine that?!
Thank you nprice! Exactly! We’re in the “crowdsourcing” era. There are a few things afoot in Davis, so crowdsourcing might be a reality soon (sorry, the focus is not on the city budget with this particular group). Nprice, if you’re interested in finding out more, let me know and I’ll take you out to coffee to fill you in.
It’s time for a change in how we do things. People aren’t engaging, for one, b/c the system of engagement is antiquated. I think nprice is on the mark w/ the website. And, there are other cities that are going this route. For another city that’s done it, and has made tremendous progress, check out [url]http://www.calgary.ca/CA/fs/Pages/Plans-Budgets-and-Financial-Reports/Our-City-Our-Budget-Our-Future/Our-City-Our-Budget-Our-Future.aspx/[/url]
For now, I await a”doom and gloom” piece on the crowdsourcing topic.
Waste is evident at the top.
In August of 2009 (35 months ago) the first of the 20 DACHA homes became vacant. Ten of the homes were vacant most of 2010 and all of 2011 and all of 2012 so far. On those empty DACHA homes, the City staff led by Housing Manager Danielle Foster have lost $15,000 a month in income every month for at least the past 20 months. $300,000 lost for the past 20 months and how much since August of 2009 for all those empty homes. Probably over $400,000 in lost income to the City just on ten empty homes.
That money just wasted by senior city management.
Were is the oversight?
What about the Tree Trimmers
The shutting down of Neighborhood Watch
The unfixed fountain in Central Park
The extra charges to ACME Theater
The shutting down of the Arts Program
Why was this mismanagement of assets allowed?
David Thompson
Twin Pines Cooperative Foundation
“”””In other communities, such as Sacramento, the firefighters have cut deals with the city to avoid 40 layoffs. The firefighters receive by far the highest average level of compensation of any of the city’s bargaining units and yet the firefighters have been an impediment to reform in this community for years.””””
I remember reading on this blog that the firefighters gave back $ 850,000.00 dollars in salary concessions over the last 3 years .
To bad that got wasted by the city for treating the DCEA employees unfairly
Impediment = ( $ 850,000.00 )
Sorry blogger but your not following your truthfulness guidelines !
What’s different here is the Davis FF union does not believe that the CC is serious They do in Sacramento
Trimmers get the boot. Why not that 4th crew member ?
[quote]I remember reading on this blog that the firefighters gave back $ 850,000.00 dollars in salary concessions over the last 3 years . [/quote]
You didn’t read that here.
In fact, what you would have read is that while the council was purporting that the firefighters contract represented a $744,000 savings, that was based on a false baseline.
The actual savings was closer to $244,000 over three years or on average just over $80,000 a year.
Source: Council Majority in Need of a Math Lesson on MOU ([url]https://davisvanguard.org/~vanguard/index.php?option=com_content&view=article&id=3183:council-majority-in-need-of-a-math-lesson-on-mou&catid=58:budgetfiscal&Itemid=79[/url])
How much would we save by eliminating the four firefighter on each truck and the cafeteria payout for unused and unneeded health insurance?
The first is a luxury we used to call “feather-bedding.” The second is a luxury that boosts pay for employees in a manner that makes it look as though they’re getting lower pay than they really are.
Both might have been nice things to have when the city was rolling in dough. Eliminating both would save money without reducing service and without generating any need to spend money to contract for services.
Citizens might get more involved to support the council if we knew the true cost of these two practices as well as other hidden-cost issues.
Instead, we get involved in budget discussions when we [u]think[/u] we understand an issue and can appreciate it–like losing tree-trimmers a day after we’ve voted to pay more for this type of city service in order to keep on extra managers.
“How much would we save by eliminating the four firefighter on each truck and the cafeteria payout for unused and unneeded health insurance?”
The fourth firefighter is about $1 to $1.5 million
The Cafeteria payout reduction to a $500 cap is $1.7 million
And the annual savings from firing two tree trimmers and maintaining the service at the current level by contracting instead?
That is less clear.
The city manager claims: [quote]A Tree Trimmer’s annual salary may be approximately $50,000, but the attached benefits to that position add an additional $50,000 to the compensation package. The general fund savings of cutting two filled and one vacant tree positions are approximately $318,000.[/quote]
And then it would depend on the contract.
One more: Does it cost the city anything to fire the tree trimmers and others on the list? Severance, unemployment, early retirement, other benefits or onetime or continuing obligations triggered by layoff actions?
Yes, I’m sure the CM calculated those into the savings. I’d have to ask what the cost was, bu the answer is ultimately yes.
“And then it would depend on the contract.”
That’s the critical question, of course. The anicipated figures must have been considered during evaluation of the options and deciding how to maintain the present level of service.
Do you have any reason to believe that wouldn’t be anticipated?
[quote]This is a great article David raising a number of good points. The main reason why the tree trimmer cuts have been considered egregious is because the community felt that they were strongly supporting and paying for protecting our urban forest when they voted 84% for the recent Parks Tax. We made clear that we were will to pay to protect those services, however within 24 hours the City tree crew was eliminated by the City Manager. Who could possibly have anticipated such a cut with a Parks Tax that passed so strongly? [/quote]
The Parks Tax only covers 25% of the costs of maintaining our city parks is my understanding, so I certainly was not surprised by the layoffs of the tree trimmers. In order to keep the tree trimmers the Parks Tax would have really had to be funded at 100% or $49 x 4 = $196. Would citizens have been willing to pass a $196 parks parcel tax? I doubt it…
No, I’m just saying that the total saving figures would have been developed as part of the process and should have been released to show citizens the impacts of the decisions. I’m further suggesting that people can understand and get behind cutbacks if we get this kind of information–not just re. tree trimmers, but fourth-on-a-truck and not-health-plan-coverage expenses.
On the other hand, we might support the tree trimmer decision even less if we knew how insignificant those savings are compared to the multimillion dollar, less visible city budget considerations.
“The Parks Tax only covers 25% of the costs of maintaining our city parks is my understanding….”
But, it was an in-your-face indicator to Pinkerton about quirky Davis values. The timing added to the weirdness of targeting two highly valued’ “low-paid” positions (instead of just the vacant one as he did with management). How much did these two layoffs really save, considering the costs to implement them and maintain the service level via contracts in the future. What kind of specialized equipment supported these two folks?
Were these two used more to send a message rather than simply to save bucks? If so, what message? And, to whom?
I think most people in the city at this point realize that the timing was fumbled, though Steve Pinkerton still maintains he was trying to give the maximum time to deal with the layoffs.
The one thing I would remind you, though I largely agree with you on this, is that the purpose of the layoffs was the PERB ruling and not to deal with the overall budget picture.
David, The one thing I would remind you, though I largely agree with you on this, is that the purpose of the layoffs was the PERB ruling and not to deal with the overall budget picture.
The NINE EMPLOYEES LAID OFF were all about the PERB ruling! Pinkerton said exactly that in his statements with the Vangaurd. It was not fault of DCEA or Pinkerton that the city did not follow the rules of fact finding. It was Melissa Chaney, the city Attorney and the now defunct City Council. DECA has now been retaliated against by the new City Manager and the new City Council and quite possibly Melissa Chaney! They have now left the City with another possible unfair labor practice to deal with! How much will this end up costing the city? Will they have to reinstate their jobs with back pay and benefits along with interest? These employees have paid a very steep price for the stupidity of all involved. At the very least the lay offs should not have happened until new contracts are agreed upon and not have produced the savings the City requires to get on the correct path to fiscal sustainability . Why on earth did we keep the same City attorney? Why do we keep Melissa Chaney employed when contracting out Human Resources out is not only a very easy thing to do but then it would be run in a professional manner? It is quite possible we would not even be having this discussion if these people did not screw the bargaining process up!
I have to take issue with the contention the Dan Wolk was wrong. It did take us years to get into this situation and although we missed opportunities to address things sooner it is still years. As I wrote in a previous post there seems to be a reluctance to look at the way Steve Pinkerton is approaching the budget. It does seem aimed at extracting the lions share of savings from the employees by reducing their compensation but miraculously maintaining service levels. Maybe there hasn’t been enough community outreach on the budget because we haven’t had the citizens see the real impacts. Again, as I said earlier a slow degradation of services is harder to see but they are getting worse. Perhaps we need to make dramatic cuts, whole services, close some facilities.
I heard a management professor tell a story once. He was relating the importance of training your employees and in an answer to what if you pay for all this training and the employee leaves to which the response was “what if you don’t and they stay.”
I would pose that this will work for many city employees under the plan to cut compensation. I would assume there are a number of employees who work for government due to the combination of the pay and benefits they receive, forgoing more lucrative positions that might pay more but have far fewer perks. This is a quality of life decision. But if you cut that compensation or the perks enough the financial realities will be the driver. So to my story. What if we cut compensation so much that the most desirable, marketable employees leave? What does that leave us with? Fewer services, lower qualified and trained employees and a city that is a shell of what we have come to expect. We need a budget that is thoughtful and community oriented if not community based and not some cookie cutter, pedestrian budget thought of in a different place at a different time that is neither enlightened nor articulate.
There are some very good points out there. Cutting firefighter crew sizes for one. We as a city of intelligent people can do better that the budget presented to and approved my council.
Here is proof that the city is truly dedicated to financial stability.
Administrative Services DirectorFull-time $10,198.40 – $12,396.21 Monthly07/13/12
*The City of Davis will only accept online applications for this position*
Another $148,000 position to make sure the city staff are as efficient as possible.