Mismanagement of City Finances by the Davis City Council
by the No on Measure Q Campaign Committee
Disclaimer: Opinions are those of the writer and do not reflect those of The Vanguard or its Editorial Staff. The Vanguard does not endorse political candidates and is committed to publishing all public opinions and maintaining an open forum subject to guidelines related to decency and tone, not content.
Introduction and Background
This article is the second in a series presented by the No on Measure Q campaign committee about the new tax measure. The first article (see here) provided three good reasons for citizens to vote No on Measure Q including a decided lack of transparency and disclosures by the City Council in bringing the measure to a vote This 2nd article discusses the mismanagement of city finances by the current administration, which is attempting to get their financial house in order by encouraging citizens to approve forking over millions of dollars annually rather than addressing the root causes of the city’s financial problems. The best way to describe this effort is that it is a “Bailout of financial and operational mismanagement!
About Measure Q
If passed on the November ballot, Davis Measure Q would double the extra sales tax from 1% to 2% imposed by the City of Davis on all goods purchased or used within the City except for some food and medicines. Based on the expected $11 million per year generated by the new tax and a Davis population of about 66,000, this works out to to be an approximately $165/year tax for every man, woman, and child in Davis. And like the previous two ½ percentage point sales and use tax hikes, this tax is permanent. It doesn’t matter if the City’s financial condition substantially changes for the better in the future, this tax never goes away!
Reason 4 – The City Council suspended paying down $42 million of unfunded employee benefits.
The City has a massive $42 million debt for unfunded employee healthcare benefits. The City’s former Finance and Budget Commission made addressing this debt a central theme of many of its publicly-noticed meetings. This debt is simply kicking the can down the road for our children to pay. The Davis Enterprise’s columnist Rich Rifkin has written about it often enough. Rising pension costs are a very real issue. Progress was made for many years until this last year when the City Council decided to suspend payments. To bail the Council out of its terrible fiscal mismanagement, the City Council is asking us to approve doubling the local extra sales tax by 1%. But instead of using these new tax revenues to pay down the unfunded employee benefit debt and address the backlog of road repairs, the City Council says the new tax revenue will go toward providing “essential services” plus “new services and programs”.
This is like splurging on your credit card instead of paying off growing credit card debt. Taxpayers should vote NO on this new sales tax measure until the City Council puts in place independent financial oversight controls and creates a solid financial plan.
Reason 5 – The City has allowed its General Fund Reserve to shrink to 7.5% from the desired 15%
The City normally keeps a minimum 15% general fund reserve as a matter of sound fiscal policy. Last year the City let this reserve shrink to 7.5%. What happens if the city has an emergency with so small a reserve?
The last thing to do in a financial crisis is to keep spending on nonessential projects when the city’s reserve is sinking badly, as if there weren’t a care in the world. Ignoring a fiscal crisis, instead of addressing it, will almost certainly cause things to get worse. Instead of exercising restraint, the City Council is trying to bail itself out of its financial hole of its own making, by getting taxpayers to approve Measure Q. It will add an additional 1% increase in the sales tax on top of the extra 1% we already approved.
Rather than using the $11 million in new tax proceeds to build up the reserves again, unbelievably they plan to spend the proposed new tax revenue on unspecified new programs and services!
Continually increasing taxes to create new programs is unsustainable economic policy. Taxpayers have to rein in profligate spending by refusing to approve any increase in taxes as long as the City Council abdicates its responsibility to be better stewards of our money.
Reason 6 – The City Council has squandered many millions of dollars on “Nice-to-Have” projects Instead of maintaining what It already has.
In 2022, the City Council authorized the purchase of a brand new ladder truck and equipment for the City’s Fire Department for millions of dollars, even though the City has access to UC Davis’ ladder truck about a mile away. And there are only a few Davis buildings high enough to even need a ladder truck and these are already fully equipped with sprinklers.
Even worse, the City also has to spend more than $1 million per year to hire additional firefighters and incur other costs to operate the truck. They also needed to spend $600,000 more to expand the downtown fire station to accommodate this larger truck.
Further, the City Council authorized spending over $1,500,000 refurbishing the 3 perfectly functional kitchens in the City’s three fire stations. And the list of wasteful spending goes on. Voters should reject Measure Q until there are checks and balances in place to limit our Councils’ wasteful and profligate spending!
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Summary and Conclusion
The Davis City Council has squandered millions of the public’s money pursuing “nice-to-have”, but unnecessary projects and acquisitions. These expenditures were at the expense of suspending paying down the City’s $42 million debt of unfunded pension obligations owed by the city, and not maintaining the desired General Fund Reserve level of 15%. This City Council does not deserve our money until they get their financial priorities straight and implement rigid internal financial controls to ensure their financial priorities are in place and followed.
Our next article will discuss additional reasons why voters should reject Measure Q including the City Council’s failure to properly maintain City assets.
I suspect that the No campaign consists of the same people who have opposed almost everything attempted in Davis over the last 2 decades. Even if things are approved, then the lawsuits follow. It feels like a strategy of obstruction and I don’t know what to believe anymore. We hire staff and then complain about their performance on the job at every turn. We drive away talent and bury the ones who remain with busy work. We elect representatives and then denigrate them continuously. People don’t need to be on a commission to put forth ideas or take action to improve the community.
Sharla, you are almost completely incorrect in your suspicion, and in voicing that suspicion without doing your homework you are taking a page from the Trump Cats and Dogs playbook.
First, you choose to attack the messenger rather than engaging the financial mismanagement history and ongoing issue.
Second, in your attacking the messengers you failed to do your homework. Lets look at the five Ballot Argument signers.
— Jeff Boone, a local businessman, is the CEO of the largest Small Business Bank in California, whose sole mission is to provide SBA loans to growing and start-up businesses. His work every day is supportive of business and business initiatives. He is the antithesis of “anti.”
— Jeff Miller, former chair of the FBC is also a local businessman who has voted “Yes” on every economic development measure put to the voters. The minutes of past FBC document Jeff’s vociferous support of those economic development proposals. He too is the antithesis of “anti.”
— Both Jeffs have been consistently vocal in their opposition to the City’s financial mismanagement.
— Elaine Musser is also the antithesis of “anti.” In her own words, “I am NOT anti-growth, anti-housing, anti-commerce, and never have been. I have supported growth, housing and local businesses in Davis. I have never before not supported a local tax increase in Davis. This will be a first for me. Why? Because the City Council has been fiscally irresponsible and will continue to be, putting the new tax revenue towards “nice-to-haves” instead of necessities. The city had an infusion of American Rescue Plan funds of $14 million, yet let the general fund reserve go from 21% to 7.5% in two years! The city has not audited its financials since 2021. Yet the city conceded in a staff report they spent funding on new programs and services as the city’s fiscal condition spiraled ever downward! And the current City Council Subcommittee on Commissions (Vaitla; Chapman) made the citizen watchdog Finance & Budget Commission inoperable, so it couldn’t weigh in on the current budget or Measure Q. Before taxpayers agree to any new tax hikes, the city needs to put a solid fiscal plan in place, as well as provide meaningful citizen oversight and transparency. Otherwise the new tax revenue from Measure Q will just go towards more new programs and services – instead of fixing our huge potholes and increasing the general fund reserves to what they should be.”
— Mark Metzger is a local Yolo County businessman who has likewise been consistent in his support of economic development efforts in Yolo County. He too is the antithesis of “anti.” Mark has consitently worked hard to protect Yolo County’s taxpayers from wasteful taxes and wasteful government spending.
— Alan Pryor’s recent history has indeed been in opposition to the two DiSC proposals. Neither of those proposals had a marketing plan to actually bring jobs to Davis, only entitlements. Alan, like many others points to the fasct that for over a decade, the City has had no Economic Development Plan that development proposals can be measured against.
As Elaine’s comments above clearly stete, the issue is financial mismanagement by the city. The issue is NOT who the messengers are.
Let’s see –
Jeff Boone came out in support of Moms for Liberty and Riley Gaines when she came to town and declared Davis as “the epicenter of darkness”
Mark Mezger lives in Woodland and is apparently a member of the Yolo Taxpayers Association (per his Facebook page) – an organization that has opposed every tax since forever.
Should I keep going?
Sharla, again you are playing the Trump Eating Cats and Dogs game. Moms for Liberty has nothing to do with your original statement, which was “I suspect that the No campaign consists of the same people who have opposed almost everything attempted in Davis over the last 2 decades.”
Further, in both your comments about Jeff Boone and your comments about Mark Metzger, you are doubling down on the tactic of “attacking the messenger rather than engaging the message.”
Controlling costs is our problem. To illustrate, here is a comparison of the history of cost inflation and the growth of City revenues.
If you go to the City’s annual audited financial reports, the city’s own numbers show that the City’s revenues in 2012 were $61.8 million and in 2021 were $92.0 million. That is a $30.2 million increase over those 9 years. Bottom-line, we have been consistently seeing revenues grow 4.5% over the prior year for 10 years. And when the audited financial reports for 2022 are published, revenues will jump more than 10% because of the huge chunk of American Rescue Plan revenues received.
During that same period inflation as reported by the Federal Government CPI averaged 2.2%. If the City government made spending decisions that matched the CPI, then the $61.8 million of costs in 2012 would have been $74.9 million rather than $92.0 million. That is a $17 million difference. $17 million that has been squandered. $17 million that could have been used to repair the streets and maintain the buildings and control the weeds and fix the pavement cracks in our greenbelts.
As reported in the public record, and summarized here in the Davis Vanguard, The average total compensation paid to the 10 highest paid Fire Department employees was $385,034. (see https://davisvanguard.org/2022/10/guest-commentary-effects-of-excessive-increases-in-city-of-davis-employee-compensation/ )
The article compares the pay of Davis to the pay in Woodland where the 10 highest paid firefighters received an average total compensation of $277,515.
Controlling costs is our problem. What do you propose as a solution for getting the Council to pay attention to controlling their costs?
I don’t understand your reference to Trump’s assertion that Haitian immigrants are eating cats and dog in Springfield, OH. As a voter, part of evaluating the information that is given, is evaluating who is providing the information. I don’t have much confidence in sources that have support Moms for Liberty anti-trans activism – something that has been really damaging the Davis community. The YOLO County Taxpayers Association is aligned with this too as we saw in its opposition to the recent school tax measure. The Association opposes all tax measures as a rule. There has even been rumblings about Measure T – the effort to open a library in South Davis from members. It seems like you want me to disregard this and be angry enough to vote to withhold funding from the City until they implement unknown austerity measures. I will read your arguments against the Measure, but don’t ask me to disregard the source of the information. Do I think that the City could be doing better? All I need to do is look at Chestnut Park and agree.
Sharla said … “It seems like you want me to disregard this and be angry enough to vote to withhold funding from the City until they implement unknown austerity measures.”
No that is not what I want you to do … or anyone else to do for that matter.
Sharla said … ” I will read your arguments against the Measure, but don’t ask me to disregard the source of the information.”
Reading and digesting the arguments and comparing them to your personal experience is all I am asking you to do. Your personal experience is massive given all the years you worked in City Hall. You know first hand the damage that has been done to the financial stability and resilience of the local economy by the City not having an Economic Development Plan since Rob White was summarily dismissed by the City Council.
Sharla said … “Do I think that the City could be doing better? All I need to do is look at Chestnut Park and agree.”
I realize that what you have said is a rhetorical question … and that you gave a clear answer from your heart. The question that naturally flows from that is, “What needs to be done to get the Council to pay attention to controlling their costs?”
A first step would be to cap all annual employee pay raises to the CPI. That can be done immediately. Merit raises for extraordinary performance would still be available.
Second, act on the John Meyer staffing report that the City has had in its hands for years and never acted upon.
Third, make managers/supervisors actually directly manage/supervise at least four to six employees.
Fourth, act on the serious concerns raised in the independent Auditor’s Report. That report says that across the City’s structure deficiencies are concerning in general. The the purchase order system deficiencies are particularly alarming. This appears to be a intentional disregard for procedure and the municipal requirements of California Law.
It is important to note that the Finance and Budget Commission recommended consistently and loudly and formally in the public record that the City badly needed a new business software (ERP). Several of the FBC members, most notably Bill Wood, were very experienced in the installation and/or use of ERP systems, and Bill was an expert. FBC provided a lot of input to staff and the Council liaison (when he showed up) by Council and the City Manager never acted.
Bottom-line, you and I are in agreement that the City can be run better … we are in the position of looking at a friend who is clearly impaired. We have our friend’s car keys in our hands. Do we give the keys to our friend and let him/her drive while intoxicated? Or do we not give him/her the keys?
“your personal experience is all I am asking you to do. Your personal experience is massive given all the years you worked in City Hall.”
Huh?
You guys really aren’t doing your side any favors with this kind of misinformation.
Matt, I’ve never worked for the City of Davis. I worked at UCD, but now recently retired. I’m speaking as a resident of Davis.
You are wrong. I have lived here since 2005 and voted for every tax increase. But I’m done. The City council is incompetent. That’s not hyperbole. My council member, Gloria Partida, is worthless. Slide Hill Park has been unusable for an entire year because she did nothing to represent our interests and the City could not bother itself to perform basic maintenance. The City council has a stomach that is never full– it’s time to stop feeding them.
The way I see it, a No vote is a vote for the status quo in terms of the level of park maintenance at Chestnut Park and Slide Hill Park – the two parks within walking distance from my house.
By that logic, you’d never vote no for any proposed tax increase. The Council is unaccountable and out of control– the citizens have to vote no to send a message. There’s plenty of money but very little competence at the moment.
Can you please elaborate on how “there’s plenty of money”?
“and the City could not bother itself to perform basic maintenance.” and yes, the fact that there wasn’t a diving board at Manor Pool all summer is embarrassing.
You ever wonder if that’s a money issue? I’ll give you a hint….it probably is. You can find delayed maintenance all over the city. You want basic maintenance? Cutting a source a revenue isn’t the way to get it.
I believe this comment sums up the futility in trying to help municipal government as private unpaid citizen. I spent over 8 years on the F&BC, over two years as the chair of it. I not only attended over a hundred monthly meetings over those eight plus years but the many days, nights and weekends working with my fellow committee member on questioning/reviewing city documents as well as external documents to help provide input into processes, costs, logic and general assumptions being made by the city staff. I can also verify my fellow commissioners put in this time/expertise at no expense to their city. We put in the time and work for the citizens, many of whom do not understand how city finances actually work. Which is understandable, after nearly eight years I could still not find all of the cubby holes where resources were reallocated from year to year.
It seems interesting that a former city employee who was paid to develop business/revenue for the city is now implying that was the F&BC did not do “her” job too along with overseeing city finances? The comment seems more as propitiation than an objective evaluation of a group of volunteer citizens trying to help. It just always seems to come back to; “It is difficult to get a person to understand something when their salary depends upon their not understanding it. Upton Sinclair”
I’ve never worked for the City of Davis in any capacity. I am a UCD retiree. I am a long-time resident of Davis.