The County Board of Supervisors has set for itself a series of excellent budgeting principles they are following in a very responsible way. Below in italics are the ones most applicable to the City of Davis budget. What follows are comments under each sensible standard briefly explaining how our City Council is faring.
“The budget should be structurally balanced…” With the adoption of the new two-year budget cycle, the City’s General Fund expenditures will have exceeded revenues for 5 years in a row, which is just not fiscally sustainable.
“Ongoing expenditures should not be funded by one-time or non-recurring revenue sources.” American Rescue Plan funds were used to create new programs, with no discernible plan on how to continue funding them once the money dried up, other than new taxes. Citizens don’t have money trees growing in their collective backyards to fund continual demands for new taxes every time the City runs out of money.
“Reserves… shall be funded at levels consistent with best practices…” The General Fund reserve is about 11%, $4 million dollars short of the city’s target of 15%. So what happens if there is another fiscal emergency?
“The… budget will…prepare to address any potential funding impacts from the [state and] Federal government.” It does not appear the City Council or City Staff have prepared for contingencies in case state and federal funding is dramatically decreased. We all know a drastic decrease is coming after the U.S. Congress passed the “Big Beautiful Bill,” or as I like to call it, the “Big Bad Betrayal.”
“…new position requests that increase net county cost will be reviewed critically, while recognizing that resources are unlikely to be able to accommodate growth.” Despite the budget’s dismal outlook, the City Council decided to approve new city staff positions the city could ill afford with money they don’t have.
“Departments shall… provide performance measures…” Performance measures? What performance measures? Where? We haven’t seen any!
“Budget reductions should provide for immediate stabilization in the short term, while creating the time and opportunity to make strategic decisions for addressing structural budget deficiencies in the longer term.” Dan Carson and I had urged the City Council to begin working on fixing the City’s financial mess as soon as they returned from vacation in Sept. Instead they have put off any action on the issue until March of next year, too late to achieve any solutions in the current budget year. And it’s not at all clear the Council will even take any action to find funding to fix our roads and bike paths, or to pay down the growing unfunded liability for employee health benefits.
“Transparency.” The public was not informed as to how bad the City’s budget picture was—until after the City negotiated new contracts with the City employee bargaining groups. Those expensive deals left no money to fulfill the promises made to the voters to put the City on a fiscally sustainable path, an egregious bait and switch.
“Budget reductions should focus on preservation of …services and programs…” City Council members continually speak of creating new programs or expanding existing ones, when it can’t even provide basic services such as pavement management.
“Recognition and maintenance of appropriate levels of administration and support to ensure that…programs and services can be effectively carried out is critical.” Measure Q was the recent sales tax increase approved by voters. Measure Q funds were spent on employee salary increases, instead of other city needs as promised in the ballot language. As a direct result, there is a shortfall of funding needed to fix pavement, parks, city buildings and other City infrastructure. Shockingly, that deficit is projected to be $265 million over the next 20 years.
If a report card on the City’s fiscal situation were issued, in my opinion the City would fail in every single category. I would highly encourage the City Council to adopt some basic budgeting policies similar to the County’s principles. I suspect it would keep the City Council on a better fiscal track, instead of constantly going off the rails.
“Ongoing expenditures should not be funded by one-time or non-recurring revenue sources.” American Rescue Plan funds were used to create new programs, with no discernible plan on how to continue funding them once the money dried up, other than new taxes.”
Amen! Amen! Amen!
Every time the Council cavalierly paid for some “want to have” out of Biden Money I cringed. What are they thinking – this is free money? Look what that ‘free money’ did to the entire national economy in terms of inflation, which is nothing but a regressive tax that most impacts those with low income.
And after the Measure Q fiasco, where Measure Q funds were not spend on roads and bike paths as promised – a bait and switch – I think citizens are going to be a lot more skeptical about approved new tax measures. Citizens are suffering from inflation, and it’s only going to get worse under the current federal administration.
Alan M.” “Look what that ‘free money’ did to the entire national economy in terms of inflation, which is nothing but a regressive tax that most impacts those with low income.”
The “secret” to avoiding inflation is to spend it as soon as you get it. Last man (or woman) standing with a dollar in their pocket loses (assuming that the game has a stopping point). And if it has no stopping point, everyone “wins” (I think). Just keeping printing money and spend it as fast as you can. My theory is that artificial intelligence pays for it.
:-)
This is all so sad.
Thanks to Dan and Elaine for keeping this front burner in public eye fir our beloved Davis.
A city so rich Human capital has been unable to marshall these advantages into a sustainable financial plan that balance revenue and expenses.
A place where people will spent an extra $200k to live vs woodland has wasted these advantages. Our schools are now threatened.. and reality building affordable apartment home which city has focused done wont fix financial problems even if it will finally bolster school enrollment in 5,years to save our schools.
This problem transcends one set of council leader which is why long time permanent city manager MiKe Webb seems suspect.
Webb proved his short term thinking in beggered the tree budget – over citizen objections— a move that that killed a woman in slide hill park by neglected pruning— and caused our annual insurance previous to more than double, exacerbating budget shortfall.
That Webb now runs Yolo county should cause concern.
However long term this is a problem of collective in Davis- a cultural problem of how we do/do not collaborate in making civic decisions.
As part of “city hall crowd” since 2012 I am part of collective dynamic that created this mess. But damn if I know the path – and my role – to change the culture and get us out of it.
Alan H says: “A place where people will spent an extra $200k to live vs woodland has wasted these advantages. Our schools are now threatened.. and reality building affordable apartment home which city has focused done wont fix financial problems even if it will finally bolster school enrollment in 5 years to save our schools.”
“Some” people will spend $200K (or more) to live in Davis (rather than Woodland). Most young families (who move to the area) won’t – but they’ll still send their kids to Davis schools – without paying DJUSD parcel taxes. Some of them actually work for the school district, itself.
The district already knows that (even) poaching students from Woodland isn’t going to prevent a school closure. (Probably because Woodland residents age-out of the system, just as everyone else does.) Though there will be another 1,600 housing units at the Woodland technology park – the one that “moved” from the location in Davis that’s now being paved-over for Bretton Woods. (DJUSD’s poaching activities are likely giving WJUSD a “reason” to not build another school at the technology park – despite what a determined group of parents in Woodland have been pushing for.)
But “who cares” about the impact that DJUSD’s poaching activities have on Woodland’s school district anyway, right?
In any case, Davis’ school system is too large in regard to the needs of the community – even when accounting for its poaching of Woodland students. That’s an entirely different issue than suggesting that it’s “threatened” as a whole. I’m surprised that you’re apparently confused regarding the difference.
There are, no doubt, quality school districts that are smaller than Davis’ school district.