Davis, CA – There are a lot of curious aspects of the No on Q Campaign that I will break down shortly. Perhaps the most interesting is the surprising lack of interest in the one contested City Council race.
Actually back up half a step further – two of the three city council races are completely uncontested and the third has three candidates, all of whom support Measure Q.
Think about the optics here – we’re mad as hell and want to send the message to the city council – but at the same time, we’re completely punting on the city council elections themselves during a year when the majority of council was up for grabs.
While that does look odd on the surface (and even as we drill down a bit), there is a method here. We have noted that for some time it is far easier to torpedo Measure J votes than it is to elect slow growth candidates to the city council.
That said, it’s a tough lift to actually defeat Measure Q. It’s a majority only ballot measure – meaning it only needs 50 percent plus one to pass. Polling in late 2023, put support for such a measure near 70 percent. You have recent history of a concerted effort to defeat the school parcel tax which garnered just 32 percent no vote.
And even though a sales tax doesn’t rise to the “for the children” level, we saw a parcel tax that didn’t have a ton of support or effort behind it get to 57 percent in 2018. Moreover, other communities are pushing similar taxes and the impact of this particular tax on the average person is fairly small.
In short, I always thought this was a tough lift.
With that said, I paused when I saw a letter from Elly Fairclough the other day, opposing Measure Q (or at least questioning it using the rhetoric from the campaign):
“Elaine Roberts Musser is on the mark in calling for the city to “right its fiscal ship” with an audit and a reworked financial plan that prioritizes basic services.
“It is shocking to learn that the budget for street repairs was cut $1.5 million while daily more residential streets crumble into a failed condition with no prospect of timely repair. Measure Q funds alone (estimated at $11 million annually) are not a solution for the city’s fiscal problems; in fact they could make them worse if expended in ways that entail new ongoing costs.”
Elly Fairclough is a long time establishment figure who has worked a district rep for multiple local legislators. Seeing this letter, definitely caught my attention.
I’m not going to quite go as far as to say I think Measure Q is in trouble – I still think that’s a tough lift given all the points I raise above. But the message that the opponents of Measure Q wanted to send, definitely have registered.
With that said, I don’t know what the opponents can reasonably hope to gain here. As I have written in previous columns, cutting off funding actually doesn’t change policy unless its coupled with change in leadership – and there is no sign of that – in fact just the opposite.
Not only do all three candidates for the open District 2 seat support Measure Q, but one of the likely candidates has been recently backed to the hilt by the Firefighters.
There is also the question of what happens if the dog actually catches the proverbial car? In this case, that would mean, defeating Measure Q.
Recently, Alan Hirsch wrote, “If Q doesn’t pass, we will have deep cuts in services and programs” and “I believe creating a crisis by not passing Q…”
But Alan Pryor, one of the leaders in the No on Q campaign called that, “a false alarmist claim repeatedly made by Measure Q’s supporters.”
He argued, “it makes no sense.”
Pryor instead argued, “This is because Measure Q is NOT A RENEWAL of an existing sales tax for which a defeat would indeed reduce city revenues probably costing jobs and resulting in a decrease in services.
“Instead, Measure Q is actually a NEW TAX for which the proponents themselves have claimed will provide “additional programs and services”. Defeating Q will not decrease city revenues from existing levels. It just means the city will have less NEW money of ours to waste.”
There is of course a flaw in this argument.
It is true that Measure Q could be used to fund “new things.” But the Council has stated very clearly that the priority will be shoring up existing holes – that includes maintaining services, improving infrastructure and most importantly shoring up the general fund reserve.
Right now, the reserve is down to 7.5 percent. New revenue is needed to get back to 15 percent.
While the reserve is a “reserve” there is a fundamental flaw in this logic. If the city fails to get new revenue, the reserve will continue to decline to zero and either before that happens or when it happens the city will be forced to make substantial cuts to programs and services. That’s even if the council somehow chooses not to bring the reserve back to the required 15 percent level (which would be imprudent to say the least).
At some level, I think the opponents believe that by crashing the system, they can force a restart at the city council level. But then again, if you don’t trust the city council to have additional revenue, why do you trust them to cut into services and programs?
As I have said before, Measure Q is most definitely a band aid and you can see the extent of the bleeding by the difference between what Davis expects to bring in – $11 million and what West Sacramento expects to bring in – $20 million for the same tax increase.
History has shown that for the most part, when money falls short, the city (and other government entities) don’t suddenly get more efficient, they cut where its easiest to cut.
As I have said previously, I don’t have a dog in this fight. I completely agree that there are serious problems with the city’s financial situation, I am just skeptical that this medicine will work to fix that.
Davis is running out of American rescue funds aka Bidenbucks. Davis lost state redevelopment funds a decade ago. A tax increase will refill the coffers from the loss of these funds.
The no on q folks argue that the city can’t be entrusted to deliver the services that the community needs. But, one thing is certain, without new revenues the city infrastructure and the quality of public safety will decline while the homeless situation is unlikely to improve.
As a general fund tax the check on
Ron, look at the progression of City of Davis revenues since the redevelopment Agency funds were taken away by Jerry Brown.
2012 . $61,823,000
2013 . $64,931,000
2014 . $67,941,000
2015 . $73,013,000
2016 . $70,490,000
2017 . $74,917,000
2018 . $77,446,000
2019 . $89,314,000
2020 . $83,720,000
2021 . $91,990,000
In the 2022 Budget the reporting of a portion of the American Rescue Funds money resulted in a $10,189,000 increase in revenue over 2021. That number will change slightly after the independent auditor reviews the City’s financials, but as it exists now the next entry in the above revenue numbers would be:
2022 . $101,179,000
That is a more than $39 million increase in revenues in 10 years … a more than 63% increase. The problem is not revenues. The problem is having the discipline to control costs.
Matt – you’re posting numbers without adjustments.
What adjustments? 2012 through 2021 are directly from the audited financial statements. They are already fully adjusted and finalized. And what is it about the words, “That number will change slightly after the independent auditor reviews the City’s financials”/i> that you don’t understand. 2022’s audited financial statement is not available,; however, the 2023-2025 Budget does have “Actual” numbers for 2022.
You haven’t adjusted for inflation, comparative labor, material costs. So your comparison is not meaningless, but it is distorted. You also for whatever reason chose to start at 2012, the end of the great recession spending adjustments, rather than in 2007 or 2008 which would have started the baseline a more typical level.
David, your statement reinforces the fact that the problem is not revenues. The problem is having the discipline to control costs.
Inflation is on the costs side, not the revenues side. Comparative labor is on the costs side, not the revenues side. Material is on the costs side, not the revenues side. Further, changes in labor and material are part of inflation.
I chose to start in 2012 because that was the first year without RDA funding. If you want to go back further, and have an apples-to-apples comparison, you will need to back the RDA revenues revenues out of the years prior to 2012.
But lets engage your adjustments argument. The table below takes the base year 2012 and shows the City’s reported revenues in the second column, the national CPI in the fourth column and the Bay Area CPI in the sixth column. The fifth and seventh columns show the impact of the respective inflation rates on the base year amount.
2012 $61,823,000 1.7% $61,823,000 2.2% $61,823,000
2013 $64,931,000 1.5% $62,750,345 2.6% $63,423,428
2014 $67,941,000 0.8% $63,252,348 2.7% $65,127,110
2015 $73,013,000 0.7% $63,695,114 3.2% $67,192,179
2016 $70,490,000 2.1% $65,032,712 3.5% $69,567,008
2017 $74,917,000 2.1% $66,398,399 2.9% $71,606,264
2018 $77,446,000 1.9% $67,659,968 4.5% $74,832,934
2019 $89,314,000 2.3% $69,216,147 2.4% $76,665,683
2020 $83,720,000 1.4% $70,185,173 2.0% $78,188,671
2021 $91,990,000 7.0% $75,098,136 4.3% $81,518,595
2022 $101,179,000 6.5% $79,979,514 4.9% $85,493,852
As you can see the revenues in 2022 are over $21 million more than those revenues if they grew only by the National CPI, and over $15 million more than those revenues if they grew only by the local CPI. That is the “extra” money after adjustments that the Council had at its disposal each year to provide services to the community and maintain the City’s infrastructure
Further, both the CPI numbers are heavily affected by housing costs, and the City’s expense reports do not show a category for how much the City had to spend on housing, because the amopunt is close to zero. That would be an adjustment that makes more “extra” money available.
Bottom-line, the problem is not revenues. The problem is having the discipline to control costs.
My statement doesn’t reinforce that point at all. Nor is it intended to. My statement is an effort to have you posting real numbers that are valid in order to have a proper discussion – given your educational background, you should know better.
I would argue that if you are trying to make a statement about revenue – you should look at revenue and not expenditures.
Revenue increases are a function of inflation as well. The city has made very small increases in actual revenue sources over that time.
That said, I calculated that two-thirds of the increased expenditures are due to simple inflation which I would argue is not the best measure of costs. Part of the driver for employee compensation is comparative cities of which the cost of housing is an embedded factor. There is also the small but actual 8 percent increase in population. Add all that up and a very small percentage of the increased costs are actual increases in cost.
David Greenwald said … “There is also the small but actual 8 percent increase in population.”
The facts do not support that statement the ten year growth of City of Davis population was 1,223 on a base of 65,622, which is an aggregate 1.87% over the 10-year period, which is a compound annual growth rate of 0.19%. That is flat growth. In addtion, the number of businesses needing services has dropped drastically. As you yourself have reported, the number of Retail businesses downtown in 2012 was 84 and in 2024 is 49. The number of Food Service businesses in 2017 was 99 and in 2024 is 64. So the demand for services is (arguably) shrinking.
Inflation is indeed a factor, but when you take the baseline $61 million and apply the local (Bay Area) inflation rate to that you get the following, which shows how $61,823,000 in year one was affected by Inflation, and in the last column the amount each year that Revenues grew faster than Inflation. If you add up all the numbers in the last column, the Council had over $60 million of adjusted Revenue growth to provide services to its (arguably) shrinking city.
Year . Revenue . Inflation Rate . Inflation Effect . Surplus over Inflation
2012 . $61,823,000 . 2.2% . $61,823,000 . $0.000,000
2013 . $64,931,000 . 2.6% . $63,423,428 . $1,507,572
2014 . $67,941,000 . 2.7% . $65,127,110 . $2,813,890
2015 . $73,013,000 . 3.2% . $67,192,179 . $5,820,821
2016 . $70,490,000 . 3.5% . $69,567,008 . $922,992
2017 . $74,917,000 . 2.9% . $71,606,264 . $3,310,736
2018 . $77,446,000 . 4.5% . $74,832,934 . $2,613,066
2019 . $89,314,000 . 2.4% . $76,665,683 . $12,648,317
2020 . $83,720,000 . 2.0% . $78,188,671 . $5,531,329
2021 . $91,990,000 . 4.3% . $81,518,595 . $10,471,405
2022 . $101,179,000 . 4.9% . $85,493,852 . $15,685,148
David Greenwald said … “Add all that up and a very small percentage of the increased costs are actual increases in cost.
I suspect you want to revisit that last sentence. I don’t think it says what you intended. But even with the wording fixed, you are ignoring the fact that the City’s argument starts with the statement that revenues have not kept up with costs. That statement is clearly incorrect.
You’re still sticking with those CPI numbers as your basis for your analysis eh? You’ve chosen to ignore what I’ve explained in the past how a simple price index doesn’t capture the rising costs of everything in a regional area.
Continued : …The check on the budget is that the voters elect the City Council.
David Greenwald said … “With that said, I don’t know what the opponents can reasonably hope to gain here. As I have written in previous columns, cutting off funding actually doesn’t change policy unless its coupled with change in leadership”
There are core members of the No on Q team who disagree with me on this, , but I don’t believe the problem in the Davis government is the people, it is the culture. As Alan Hirsch quoted Peter Drucker yesterday, “Culture eats strategy for breakfast.”
Josh Chapman is capable of doing the hard work that is required to change the culture. So are Bapu Vaitla, and Gloria Partida and Donna Neville. However, they are unlikely to undertake that task if we give them more money to play with.
Changing the culture isn’t easy, but there has been work done in the past that can be used to start the task. John Meyer completed an assessment of the organizational structure of the City, and made a coherent, complete recommendation for eliminating waste. What he found were significant span of control issues, including numerous instances where a supervising employee was supervising as few as one single employee. But none of his recommendations were pursued.
10 years ago the City’s then-CFO identified serious problems in the City’s purchasing practices that were costing the City huge amounts of money. More recently a subcommittee of the FBC completed a focused study of purchasing practices and audited a significant number of purchases and found that the City’s purchasing practices that were costing the City huge amounts of money. And both of the last two audits by the independent auditing firm called out the City’s purchasing actions as being in violation of the City’s purchasing policies where they existed, and that those policies were/are woefully deficient.
That is a decade of inaction for a clearly defined, very costly problem. If we give the City more money to play with, that woeful history will just continue. That is why I have characterized the No on Measure Q position as “an intervention” and Jeff Boone has characterized the Yes on Measure Q position as a bailout rewarding a legacy of bad management and bad fiscal decisions. If your child was stewarding his/her money the way the City has, would you give that child more money to squander?
“But the Council has stated very clearly that the priority will be shoring up existing holes”
By their own actions, the Council has proven this to be a false claim. If they were focused on “shoring up existing holes” they would not have blown up their budget with new items like the ladder truck and the additional FD staff.
The first step in economic development is to make it easier and less costly to start a new business in town. If the goal is to increase retail sales, as has been stated many times over the years, then an easy fix is to expand the number of locations in town where retail businesses are allowed. All that requires is a change of zoning (to allow retail) on existing commercial buildings, and in some cases changing the municipal code. The Council could have made these steps at anytime (with very little effort) over the past two decades, but no.
Well said Mark. Very well said.
“[W]e’re mad as hell and want to send the message to the city council – but at the same time, we’re completely punting on the city council elections themselves during a year when the majority of council was up for grabs.” This is one of the negative aspects of district-based elections. If these were at-large seats, the entire City could focus on the failures of the council. But I live in wretched Partida’s district and won’t have a chance to engage meaningfully until 2026.
The author of the piece aludes to the “dog actually catching car.” In an election cycle where unhinged hyperbole is rampant, this seems an offensive metaphor. Both sides of measure Q have fiscal and oversight concerns with regards to the city’s financial obligations. There is at least doubt regarding the transparency of the City’s past budgetary history. The argument that the city council elections might influence change ignores the fact that district elections prevents much of Davis, my self included, from having and electoral say in November. When the waiter at a restaurant tells me “some folks really like this dish, but others really hate it”, I decline the order. I get that same feeling in regards to Measure Q. I applaud the research both sides have done to illuminate the effect the 100% increase in our city sales tax might bring, but when I’m not convinced by those pushing the numbers, I’ll always vote NO. Come back later and we’ll see. I liked Matt Williams comment about Alan Hirsh’s quote of Peter Drucker. “Cultural eats Strategy “. Well I’ve been in Davis a Decade and a Half longer than Mr. Greenwald and I still love the culture of my adopted town. I sure miss the Blue Mango Restaurant, Mayor Julie Partansky and the Palms Playhouse. Our culture is small town vs busy city, I wish we could still behave that way. (Oh and yes… I’m ready for all the “Go Boomer” comments.)
Not passing Measure Q this time doesn’t mean that it won’t pass if offered again under a different set of conditions. Remember that the leading opponents were leading PROPONENTS in previous tax measure campaigns. A crisis can sharpen the mind.