by Matt Williams
There is an age-old human behavior pattern that kicks in when we hear news that we don’t really want to hear … we shoot the messenger. After the messenger has been dispatched, sometimes we assimilate the message, and other times we duck our heads in the sand and pretend that the message doesn’t exist.
Over the past week, in my best imitation of Hermes (whose ankles had wings) or Ross Perot (whose ears were wings), I have carried forward a dispassionate recitation of just how dire the City of Davis’ current fiscal situation is. It has been the antithesis of “Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people.” Well, actually that is not quite true, because the “which shall be to all people” part has indeed applied. It is just that the “great tidings” have engendered anything but “great joy.”
I will get into the details of the “tidings” later in this article, but right now I would like to focus on the reaction that my “message” has produced along the way. Two of the people I respect the most on the Vanguard are Mr. Toad and hpierce, and despite the desire to preserve anonymity through screen names, I have sat in their presence and had many a cup of coffee with each of them. They are two of the people who “ground” me on specific issues, and I never regret running into either of them, or receiving a call when an issue warrants it. They are two voices that I listen to, and if I were to ever end up as an elected official, each would be in my “kitchen cabinet.” Further, despite our occasional differences, I think they respect me as much as I respect them.
But a funny thing happened on the way to the forum. Both hpierce and Mr. Toad have recently lit into me like a wolf encountering an unguarded flock of sheep. Their respective message has been pretty much the same, “How dare you, as an interloper from the dark recesses of unincorporated Yolo County, place a mirror in front of our faces and quote Walt Kelly? You have no standing in this Court!! Out, out damn Spot!”
In their zeal to attack the messenger, it seems that they hope to take the focus off the message. What is so painful about that message that they both would take those overt steps to throw someone who they respect under the bus?
The “Tidings”
The message is this … the City of Davis’ Fiscal situation is in a world of hurt. How bad is it? Well sadly that is a question that still needs to be answered in an open, transparent and thorough fashion. However, based on what we know, here are some thoughts:
1) Human nature causes people to not pay attention until the worst case scenario (rock bottom) has been reached.
2) Many people in Davis believe that if we haven’t truly reached rock bottom, we certainly have entered that Stygian neighborhood when it comes to the City’s fiscal health.
3) The December 17th Mid Year Budget update to Council reported a $32.11 million aggregate Budget deficit (double what was projected in the original Budget created less than six months ago) at the end of Year 5.
4) Not included in that $32 million is the five-year portion of the $164 million over 20 years needed to keep the Pavement Condition Index (PCI) of the City’s streets at its current level (the low to mid 60s). $164 million over 20 years is $8 million per year, which adds $40 million to the $32 million 5-year deficit..
5) Even after spending $213 million over 20 years (the $164 million noted above plus the $49 million already in the Budget) the streets maintenance backlog rises $108 million. That is because the combined materials and labor associated with streets maintenance are expected to experience an inflation factor of between 8% and 9.5 % per year. When that is compounded over 20 years, $21 million magically becomes the $129 million reported to Council by Staff on December 17th.
The Ron Popiel Syndrome
6) The same deferred maintenance backlog situation that currently exists for streets exists for City buildings and structures, and like streets there are no reserves set aside to perform buildings and structures maintenance. Whatever the buildings and structures deferred maintenance situation is, it will add $xx million (possibly $xxx million) to the $72 million deficit calculated at the end of 4) above.
7) I hope I don’t sound like a broken record, but the same deferred maintenance backlog situation that currently exists for streets also exists for City parks and greenbelts, and once again, like streets, there are limited or no reserves set aside to perform that deferred maintenance. I have been told that the Recreation and Parks Commission is slated to receive a deferred maintenance update report from City Staff. Whatever the parks and greenbelts deferred maintenance situation is, it will add $yy million to the $72 million deficit calculated at the end of 4) above, or the $72 plus $xx million deficit calculated at the end of 6) above.
8) The same deferred maintenance backlog situation that currently exists for streets exists for City pools. I know that Holly Bishop is likely to have informative estimates of what the pools deferred maintenance situation is, and whatever it is will add $zz million to the $72 million deficit calculated at the end of 4) above, or the $72 million plus $xx million plus $yy million deficit calculated at the end of 7) above .
9) The above list may well be (almost surely is) not complete. Here is a partial list of various Budget categories that each have their own inventory of impending Maintenance expense (some of it deferred, some pay as you go).
- Fleet
- Transit
- Property
- The non-pavement parts of Streets (sidewalks, signals and street lighting)
10) Then there are the monies that the various Enterprise Funds are going to require for maintenance that isn’t part of the General Fund, but are looming multi-million dollar expenditures that will be paid for by the taxpayers/ratepayers.
- Storm Water / Storm Sewer
- Waste Water
- Potable Water
- Solid Waste
The Bottom-Line
The message from the above nine points is pretty clear, “While we are in the neighborhood of rock bottom, the truth is that as bad as the current situation is, we actually don’t how how much further down we have to go in order to truly be at rock bottom .” That message should be a wakeup call to all Davis citizens.
We can not afford (no pun intended) to sweep anything under the rug. The time has come to get a firm understanding of where all the impacts on the Budget truly are, quantify them, and then craft a message that galvanizes our community and its leaders to comprehensive action that results in both further reduction and containment of costs, as well as a sustainable multi-pronged approach to short-term and long-term revenue growth. We have met the enemy, and they are us. As we quantify and verify our obligations and desires, we will no doubt find ourselves conducting a community dialogue about what items on the obligations and desires list are true needs and what items are actually only wants.
The good news is that working together we can come up with a comprehensive, coherent picture that (A) communicates with our fellow citizens, (B) creates an environment where neither staff nor Council can sweep items under the rug, tell partial stories or backslide, and (C) provide support to efforts by both Council and the City Manager to make the tough decisions necessary to do the right thing.
Thank you for listening, and thank you for caring.
Good article! Very interesting to read.
However, given the soaking of the ratepayers that the surface water plant and its rate structure brings to all of us, I have grave misgivings that any sort of revenue increase is going to pass with the voters. Time will tell, but the City should be very cautious about assuming Davis voters are going to automatically open up their checkbooks to bail out a city government that has been so careless with public money, especially since about 2005, under the watch of Saylor and Souza.
These same people think that after leaving the city fisc in disaster mode, we are going to welcome their dream project — large business park that blows the borders — that bails out the City from the mess it created? I would be very cautious if I were on the CC.
Michael
You are neglecting to mention a critical point. While the city government still represents the City of Davis, the council members are an entirely different group. One cannot lump the interests and strategies of the current council with those of the previous council credibly.
Don’t be so modest Michael, the big ticket items that are blowing up the City’s budget are the pension and health care decisions that were made long before Saylor and Souza ever ran for office. In fact, if my memory serves, many of those decisions were made on your watch (I am sure that Rich R. will correct me if I am wrong) along with that wonderful decision to put four fire fighters on an engine. You are every bit as responsible for the current financial fiasco as any of your favorite boogie men.
Mark: Four on an engine and 3% at 50 were both implemented in 1999, Michael Harrington was not elected until 2000.
It isn’t that you are laying out for the people of Davis the problem that concerns me its that you were advocating for a set of solutions that you will not be paying taxes on if implemented. I value your math skills but you should not be telling people which bad option is in their best interest. The voters of Davis need to make those decisions for themselves. Its not quite as bad as David telling City employee Unions what they should do but its the same principle the decisions need to be hashed out by the people whose pocketbooks are impacted and those who have no skin in the game should limit themselves to laying out the alternatives.
for most intents and purposes matt williams is as much a davis resident as anyone here. the world impacted by city politics does not end at the entrance to el macero. i don’t recall you telling don or a number others here who work in the city, comment, but don’t live in the city, that they aren’t entitled to their views.
I fully agree with the Toad.
Toad, I both hear your concern and take it to heart. I never thought I was advocating for a specific solution. I felt I was dispassionately laying out the cold hard facts about what (some of) the possible solutions are. As I noted in a prior post in a prior thread, only the Council and the Davis voters can advocate … and ultimately decide.
With that said, perception is reality, and if I gave you reason to perceive that I was advocating for what a specific solution should be put on the table, I apologize. The purpose of this article is to be crystal clear that we need to understand the problem as a precursor to changing the focus to solutions.
Understood and i think you understand better my complaint.
I understood it at the time, and modified the words I used thereafter when describing the problem and/or its components and/or its parameters. As I said, perception is reality. My intention is not to inflame, but rather to engage.
“I value your math skills but you should not be telling people which bad option is in their best interest.”
Why can’t he tell us? To use an analogy, I tell my husband all the time what actions are in his best interest, because I love him and want him to be healthy and happy, (plus I need him to happy and healthy, he pays the bills the around here).
My point is just like my husband doesn’t need to listen to me, we don’t have to listen to Matt. Let him share all the opinions he wants, at best we might learn something, and at least we know he cares.
Mr. Toad
Your contention is fundamentally in opposition to freedom of speech. Matt has every right to lay out the alternatives as he sees them, and every right to express his opinion about the strengths and weaknesses of each option.
It is up to the voters of Davis to then decide which of the alternatives, or some other option, best fit the needs of our city. I personally find Matt’s opinions thought provoking whether or not I happen to agree with them and I hope he will not stop stop expressing his opinions as long as they are clearly labelled as such.
I am not a government agent so objecting to his speech is not relevant. He can say anything he wants but when he crosses the line and expresses what choice is appropriate for others its fair to point out that he has no skin in the game because he is deciding for others how they should handle their finances. If a friend buys a car and pay cash but chooses to finance the car its really not my business to tell my friend what is in their own best interest. If I said you know its going to cost you this much more if you finance it it is one thing but that isn’t what Matt did. He said it would be wrong to float a bond to get a handle on city finances to fix the road and that we should pay for it up front. He did so without needing to pay a share of it himself. i have a problem with that and called him on it. Just as I did with David on the Unions and as I have with Don on his business interests and his opposition to other businesses although Don is alway threatening to censor me so I’m reluctant to call him out.
“he is deciding for others how they should handle their finances.”
How? He has no power to decide.
Good point, at worst he’s opining how others should handle their finances. I do find it interesting that the title of the article is about the message and the messenger, and a good portion of comments have focused on the messenger and away from the message.
Okay, let me clarify. he is attempting to decide for others…
I wholeheartedly disagree Toad. I am simply attempting to get all the issues out on the table and am encouraging a robust discussion/consideration of each of the issues. I’m at a loss as to where you see me advocating for any particular solution.
As I very clearly say in this article, there is a significant amount of work that needs to be expended on better understanding the length and breadth and depth of the problem. Without a good understanding of those three dimensions/parameters of the problem then we really won’t know whether any proposed solution actually matches what our fiscal needs are.
The word “decide” and the expression “attempt to decide” are yours, and relate to your focus on solution(s). The word “understanding” and the expression “endeavor to understand” are mine, and relate to my focus on the problem(s).
Calling a solution “irresponsible’ is both judgmental and perhaps wrong.
You didn’t pose it as a solution. You presented it as an alternative/option. I pointed out it’s clear fiscal flaws. How is spending $13 million per year in debt service a better alternative than spending $8 million per year for the capital expenditure portion of the debt service and not incurring the $5 million per year interest payment? Pointing out that clear mathematical/fiscal discrepancy is not judgmental. The numbers speak for themselves, and pronounce their own judgment.
Toad, I went back to the prior thread and found the post of mine that set you off. I repost it here. Reread it. I think you will see that I am not advocating for any particular solution, rather I am illuminating aspects of the problem, as well as noting the fiscal consequences of taking on debt. I think it is a dispassionate recitation of objective information.
—— Prior Post ——–
Mr. Toad said . . .
“Problem is you lead with your chin while trying to punch workers in the nose. We may need to cut more and a $400 dollar parcel tax may be the number in addition to a sales tax increase or perhaps a combination of both or maybe economic growth and financing the road funds over a longer term will lessen the blows. Doing both taxes on the June ballot is a bitter pill and politically hard to do especially when the decision makers and the finance people, the people who actually are responsible for making these decisions, haven’t figured out how much to turn the dials on each variable.
Pinkerton has laid out the problem and the Council knows they need to grapple with a tough reality when they get to the budget but you guys think you know the answers and spout off without the popular support of the voters and in Matt’s case without even living in the city where he would be subject to the parcel tax he proposes. “
I completely agree that seeing both on a June ballot will be a bitter pill to swallow, but it is the reality that we face. We are “kicking the can down the road” if we choose to either increase the already overwhelmingly large inventory of deferred expenses, or incur debt so that we can pay over 65% more for the exact same end result with our streets maintenance.
The problem is that by law the City can not operate with a negative General Fund balance (unlike both the Federal Government and the State). So the 5 million deficit in 2014 that exists before adding any streets expenditures has to be covered. That isn’t something we have any alternatives for.
Pinkerton and Staff have indeed laid out the problem, but because of very understandable time management of a very busy Council schedule, the information has been presented in pieces over the two meetings on December 10th and December 17th. A single consolidated picture of the Budget including the Deferred Streets Maintenance annual costs has not been as yet presented to the Council. That is in part because the Council hasn’t formally chosen which Streets Scenario to pursue.
One option could be to further defer the streets maintenance, but the fiscal implications of that decision are frightening if you look at the graph below:
http://vanderhawk.net/wp-content/uploads/2010/12/ConditionCurve21.png
The Pavement Condition Index (PCI) of our streets is already at the level of the low 60’s, which is right on the border between Fair and Poor, which is also the point where the cost curve changes dramatically as the graphic clearly shows. Choosing not to spend $1 now in exchange for spending $4 to $5 in the very near future is not a fiscally wise decision.
No it was probably one you made before that one because i raise the issue of you not being subject to the tax so it must have already set me off.
No, David set you off. You just took your frustration with him out on me. But I can handle it.
“Okay, let me clarify. he is attempting to decide for others…”
How do you attempt to decide for others? He may be attempting to influence people’s descisions, but as long as he is not doing so in a manipulative or dishonest way I don’t see why you have a problem with it.
B. Nice:
Matt Williams: 2014/01/02 In reply to Don Shor. –“Why is it that you want to penalize the low income members of the Davis community with higher sales taxes?
Matt Williams: 2014/01/19 In reply to Mr. Toad —
Toad, I have said that the ramp up time for Innovation Park Economic Development is probably 3 years, so in the short run we have no choice other than to add 1/2% to the Sales Tax and a $400 per year Parcel Tax, and both those tax increases should be on the June ballot.
Matt Williams: 2014/01/24 In reply to Mr. Toad — I never thought I was advocating for a specific solution. I felt I was dispassionately laying out the cold hard facts about what (some of) the possible solutions are.
What are you trying to say Don, Matt’s manipulating all of us;-).
To be clear, I think personal biases come into play whenever most people argue for or against something.
While Matt clearly has strong opinions on things, I would say he does a pretty good job representing facts with a reasonable amount of biasesness (is this a word?), and he is good at letting his biasses be known.
There are a lot of knowledgeable people that post on this blog, and even though I often disagree with some of them, I just as often learn from them.
So, it’s not all that relevant to me if the information or opinions they share are coming from someone who “technically” lives in Davis or not.
That all being said, I still do fact check the guy.
As you should.