September Looms As a Critical Month on City Budget Issues

The Davis City Council is back in action tonight with their first regular meeting following their summer recess.

The adopted budget from June called for roughly $8 million in cuts, including $4 million in savings from the new labor contracts and $4 million in restructuring.

While the budget is not on the agenda for tonight, it looms large.  The city has finally hired a replacement to Finance Director Paul Navazio, who took the city manager position in Woodland this spring.

On Monday, City Manager Steve Pinkerton told the Vanguard that Yvonne Quiring is not expected to impact the current labor negotiations for contracts that expired back on June 30.  The process, he said, is too far along and so the city’s outside negotiator, Tim Yeung of Renne Sloan Holtzman Sakai, LLP, along with Human Resources Administrator Melissa Chaney, will continue to head up the city’s negotiating team.

Mr. Pinkerton, citing privacy of personnel matters, could not divulge if the city is close to either a contract agreement or impasse.  However, he did say that we would have some news within a month.

Other sources familiar with the current situation are expecting that the city will be headed to impasse.  Last week, the school district also indicated that it may be close to impasse on contingency agreements with the teacher’s union should the governor’s tax fail.

The situation with the city is somewhat dicey at this point.  Despite the agreement on pension reform, the biggest impacts seem down the road and for new hires.

While Mr. Pinkerton would not divulge the details of current negotiations, it is clear that the issue of pensions weighs heavily on them.

“By far the biggest issue we face,” he said, “is what we’re going to do with the people who are now employed and how we can get some protection.”

“We have to convince the existing workforce there have to be enough dollars down the road, that we have to get off this kick that it’s sustainable the way it is right now for existing employees.  Or that fixing it for existing employees has somehow shifted the sustainability issue for current employees,” he added, “It has not.”

Steve Pinkerton noted that, while pensions are an important issue, the issue of retiree medical is a far bigger issue for the city of Davis right now.  As we have noted, the costs of retiree medical put it somewhere between 20 percent and 25 percent of payroll.

In the long run, this might help the city by raising the retirement age and thus reducing the years that the city has to fully cover employees.

However, as Steve Pinkerton was quick to note, the impact does not affect anyone currently employed.

As we await some word on the state of contract negotiations, the issue of the size of the firefighter force is another critical issue.

As we noted a couple of weeks ago, it was in 1999 that the city of Davis expanded their fire staffing from two stations of three on an engine and one station of four on an engine, to all stations having four on an engine.

At the time when the council unanimously approved the changes, it required the hiring of six firefighters at the cost of just $368,676.  This means, at that time, total compensation for a firefighter was about $60,000 a year and that figure “included the costs for turnouts, beds and lockers for the new firefighters.”

Now the cost of that policy is far higher.

As Rich Rifkin wrote on August 15 of this year, “Based on numbers provided to me last week by city staff, the marginal expense of that additional firefighter on each truck in the 2011-12 fiscal year was $1.48 million. For the 2012-13 fiscal year the cost will be another $1.57 million. In five years it will be $1.94 million.”

The city has brought in Interim Chief Scott Kenley to do a study to see if the city can reduce its fire staffing.

The city’s interim fire chief, Mr. Kenley, told the Vanguard in August that he is in the process of a full analysis of fire staffing with a report going directly to city council, due in late September.

One of the critical questions is the risk assessment to dropping the number of firefighters on duty.  Back in 2009, Chief Rose Conroy analyzed the data and found that there were ten instances where the city would have been out of compliance with the new OSHA standard.

However, Scott Kenley said he has gone back through three years of service calls, looking at all calls where equipment was tied up for more than an hour – those calls that are most likely to include fires significant enough to require an entry.

According to his analysis, Davis has only had five fires a year requiring an interior entry, which would require the two in/two out standard.

In short, the city is spending $1.5 million per year to prepare for five incidents.

A reduction in the level of fire staffing might save the city nearly $2 million per year, but at the same time other studies such as CityGate have indicated that those cuts will come with a cost.

Mr. Kenley told the Vanguard the council is going to have to make some tough choices.  He said it was a matter of either increasing or reducing the risk to the community and then making a choice in the tradeoffs.

His report to council will be done in late September, and at that point he hopes to provide the council with clear information that they need in order to make an informed choice.

Will September finally be the month where we start to develop a clear picture as to what the employee contracts will look like and the true feasibility of the reduction of fire staffing?  That is the critical question moving forward, as Davis attempts to put itself on the path to fiscal stability.

—David M. Greenwald reporting

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