by Gloria Partida
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.
Meeting the fiscal needs of our city has been a challenge for many years. The city has tried to meet that challenge in various ways. In 2018 the measure to pass a tax to fix roads and bike paths garnered over 57% of the vote, but failed because of the need to pass by two-thirds. The city has done a very good job of managing to deliver services with a lean staff and recently hired an economic director to help stimulate revenue.
The reason many people are drawn to Davis is the access to quality city services. We enjoy the green belts, recreation services and community connections. All of these are supported by taxes into our general fund. We are now at a critical tipping point that will require us to make hard choices about what services we can offer.
I am supporting Measure Q because whenever cuts to community services occur, they affect the people that can least afford it. Young families and seniors that rely on recreation programs to bridge gaps will lose access to those services. Public safety, which is already stretched thin, will be more so. The ability to support affordable housing will become nonexistent. Measure Q dollars will stay in our community and their use will continue to be overseen with the same rigorous public process our current revenue undergoes. Join me in voting to support a community where everyone can thrive!
Gloria said … “Meeting the fiscal needs of our city has been a challenge for many years.”
The revenue numbers in City’s own audited financial reports do not support Gloria’s claim.
From 2012 (the first year after Governor Brown did away with the Redevelopment Agencies all across the state) through 2021 (the most recent year the City has published an independently audited financial statement) the City’s Governmental Services revenues have grown 48.8% … from $61.8 million to $92.0 million, which works out to a compound annual increase of just over 4.5% year over year.
During the same time frame … 2012 to 2021 … “Business-Type Activities” (usage fees for the Utilities Water, Wastewater, Solid Waste, and Storm Water) revenues rose from $40.1 million to $65.7 million, a 63.8% increase, which works out to a compound annual increase of just over 5.6% year over year.
The growth of revenues has been consistent. The problem is cost control, not the absence of revenue growth!
Note 1: the costs Inflation rate in 2021 jumped up to 7.0%. Costs definitely were higher. However, the Governmental Services revenues in 2021 increased by 9.9%.
Note 2: the costs inflation rate in 2022 jumped up another 6.5%. Costs again were definitely higher. And although the City hasn’t released the 2022 audited financial statement, we know that revenues will have increased by more than 10% because of the $19.7 million American Rescue Plan payment received by the City (see https://www.cityofdavis.org/city-hall/city-of-davis-american-rescue-plan-arp ). So again the annual revenues increase exceeded inflation.
Why do you tie the rises in costs to the rate of inflation? Costs are generally going to be mostly manpower and manpower costs are mostly a reflection of the state of the regional economy. Or in other words you have to pay more for workers in a economically growing region like Sacramento. So hiring guys to fix roads in Davis is going to cost a lot more when they’re being paid more to make new roads for cities that actually grow.
As for your claims about fire fighters in Davis and Woodland; the difference in pay doesn’t appear to be that great to me. According Salary.com a fire fighter II makes $72,803 in Davis and $72, 735 in Woodland. Just eyeballing the base fire fighter pays from the city salary tables this looks to be the case:
https://documents.cityofdavis.org/Media/AdministrativeServices/Documents/PDF/ASD/Human-Resources/Salary%20Tables/24-121%20-%20Revised%20Salary%20Table%20approved%207-30-24.pdf
https://www.cityofdavis.org/city-hall/human-resources/salary-tables
Now I don’t know to what or how much overtime pay gets factor into the fire fighter’s total compensation as it’s not reflected in their base salaries I believe.
Keith, here is a somewhat long, I believe very interesting/illuminating, answer to your second question. I will address your CPI question in a separate comment after this one.
According to the May 2024 Staff Report when the City considered the recent firefighter MOU ( see https://documents.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/2024/2024-05-07/03I-Fire-General-Unit-and-Management-MOU.pdf), the Firefighter II position in Davis was on average about 6% less than in neighboring communities,, and then the Council gave them an immediate 6% raise to bring them up to parity (and we made it retroactive back to July 1, 2023!). This is in conflict with your statement that our Firefighter II salaries were right in line with Woodland’s. Why the discrepancy?
But our main problem with the raises just given to the firefighters is that the 6% raise was also given to all the firefighters, including the ten highest paid fire fighters in Davis, who are objectively already paid far more than the 10 highest paid firefighters in Woodland … as well as our own 10 highest paid Davis police officers.
Drilling down into that statement, the average total compensation given to the 10 highest paid firefighters in Davis in 2023 was $283,253 while the comparative average total compensation paid to the 10 highest paid firefighters in Woodland in 2023 was only $246,219. That was before the 6% raise retroactive back to July 1, 2023!
So our ten highest paid fire fighters were being paid an average of more than 15% more than their Woodland counterparts before the raise … 22% more after the raise.
It is worth noting, that these same ten highest paid firefighters in Davis were being paid 7% more in total average compensation than our ten highest paid police officers in Davis who received an average of $265,483 in 2023. That 7% became more than 13% with the 6% retroactive raise.
How did this all come about? The answer to that is straightforward. The Davis fire fighters contributed tens of thousands of dollars to the recent campaigns 4 of our sitting City Councilmembers- Josh Chapman, Bapu Vaitla, Will Arnold, and Gloria Partida. And the fire fighters just donated $5,000 in the Yes on Measure Q campaign committee.
Follow the Money!
These are all good questions Keith. I will address them one by one.
Keith Echols said … “Why do you tie the rises in costs to the rate of inflation?”
The answer arises from the First Law of Holes … “if you find yourself in a hole, stop digging.” That First Law is a warning that when in an untenable position, it is best to stop making the situation worse. Using CPI as the annual salary inflator is widely used in lots and lots of industries across the country. It is really clean and easy to understand. It works well. Clearly what the City has been doing isn’t working.
Keith Echols said … “Costs are generally going to be mostly manpower and manpower costs are mostly a reflection of the state of the regional economy.” Or in other words you have to pay more for workers in a economically growing region like Sacramento.
I’m not sure how the condition of the regional economy is going to be reflected in municipal governmental jobs, For the most part workers don’t move back and forth from municipal governmental employment to private sector employment. But lets not quibble about that.
With that said, it is worth looking at the difference between history of the National CPI and the history of the Bay Area CPI. Here are those numbers. As you can see, the Bay Are Compound growth reate from 2012 to 2022 is not terribly different. A substantial proportion of the difference is due to the cost of housing in California.
………..……… National ….. Bay Area
Year ……….…… CPI ………….. CPI
2012 ………….. 1.7% ………… 2.2%
2013 ………….. 1.5% ………… 2.6%
2014 ………….. 0.8% ………… 2.7%
2015 ………….. 0.7% ………… 3.2%
2016 ………….. 2.1% ………… 3.5%
2017 ………….. 2.1% ………… 2.9%
2018 ………….. 1.9% ………… 4.5%
2019 ………….. 2.3% ………… 2.4%
2020 ………….. 1.4% ………… 2.0%
2021 ………….. 7.0% ………… 4.3%
2022 ………….. 6.5% ………… 4.9%
Compound .. 2.27% ……….. 3.21%
Annual Growth Rate
Keith Echols said … “So hiring guys to fix roads in Davis is going to cost a lot more when they’re being paid more to make new roads for cities that actually grow.”
Unfortunately we can no longer include images in our comments here on the Vanguard, but I will ask The Vanguard to include a picture that was taken the last time the City placed a notice that it was hiring fire fighters. So many people showed up to interview that the line of applicants wound from the back doors of City Hall along the walkway past the pool to B Street, and then down B Street to the corner of B and Fifth Streets, and then down Fifth Street all the way to A Street. Clearly a position in the Davis fire department is considered to be highly desirable.
Bottom-line, we can continue to chase the tails of the other municipal jurisdictions who are giving exorbitant raises … or we can stop being lemmings. We all know what the ultimate fate of lemmings is.
You’re misusing the CPI. It’s meant to track inflation and the real values of wages (taking into account inflation). So it’ll tell you the real value of those salaries in regards to it’s true buying power but it doesn’t tell you about a specific job market. That’s a stretch. There seems to be this need by some to tie city employee (and those hired by the city) compensation to the CPI because it’s tied to a cost of living index….so they feel like it’s okay to pay more to adjust for inflation but nothing more. But that’s not the way the job market works. You have to pay workers based on their other opportunities. It’s pretty simple; when an area is growing then the cost of hiring workers increases….those construction workers (to fix roads and such) have multiple job offers when a region is growing….so the cost of hiring them increases significantly.
Keith, thank you for the thoughtful response. I agree with your description of how the CPI works. It does a good job of describing how the existing wages of the existing employees of the municipal jurisdiction have shrunk in purchasing power.
CPI increases assume that the employees are doing their job as described/expected by the municipal jurisdiction. If a continuing employee is simply “doing their job,” the fact that they are indeed continuing to do their job makes the conditions of the new hires employment market largely irrelevant.
Further, for the employees who have consistently demonstrated that they have gone above and beyond simply doing their job, there are merit increases that are available to reward those employees. Plus there are promotions.
Your construction worker example is a thought provoking one. It caused me to look at the annual Budget and see that well over 50% of the City’s annual General Fund expenditures go to the payment of City employees. That prompted the following follow-up question, “Which of the current City positions actually do construction tasks?” Bottom-line the answer to that question is, “Very few.” I have sent out a question to half a dozen people to get their thoughts on the following question, and will get back to you once I hear back from any of them.
“Do any of you have a sense of how much of the annual General Fund Budget falls into the following four categories?
— Employee Salaries and Benefits
— Retired employee costs (pensions and OPEB)
— Overhead
— All the rest (mostly contracted services)
My suspicion is that:
1. is well over 50%,
2. is at least 10%
3. is at least 10%
leaving 4. with less than 30%.
Thoughts?
Matt
>”CPI increases assume that the employees are doing their job as described/expected by the municipal jurisdiction. If a continuing employee is simply “doing their job,” the fact that they are indeed continuing to do their job makes the conditions of the new hires employment market largely irrelevant.
Further, for the employees who have consistently demonstrated that they have gone above and beyond simply doing their job, there are merit increases that are available to reward those employees. Plus there are promotions.”
But that’s not how hiring works. Sure you can give raises to current employees based on the CPI. That makes sense. But when you need to hire someone you don’t figure out what you’re paying someone right now for that job and just figure you’re going to add the difference based on the CPI. No, you look at what the other similar jobs are out there are paying or are advertised as paying. So if I’m hiring a City Manager or an accountant…it’s going to be based on what the job market dictates. The CPI doesn’t reflect a regional economies’ job market or the availability of talent of certain jobs/positions. And the thing about growing markets and jobs is that they tend to compound on each other; meaning someone gets paid market rate for a job over whatever the current person with that job or a similar job and then if the market is still growing and employees are in demand …then the next person gets even more than the last person for that person on the open market.
>”I’m not sure how the condition of the regional economy is going to be reflected in municipal governmental jobs, For the most part workers don’t move back and forth from municipal governmental employment to private sector employment.”
Sure they do. And accountant is an accountant. HR is HR. I mean sure there is acquired knowledge and experience with working in certain kinds of government (city, state fed) but it’s not foreign to move into the private sector…especially if it’s one that’s related to the government. In my business over half the planners I knew eventually ended up working for development companies. One of my buddies went from being a planner, to in charge of entitlements for the same company I worked for in the bay area to the head of land acquisition and development for a major central valley builder and then back to being a planner (in Colusa I think) and then to being a Sr. Planner in another central valley city (I can’t remember…somewhere south of here). I have another buddy of mine that worked as a planner for two bay area cities and is now a builder.
> “Which of the current City positions actually do construction tasks?” Bottom-line the answer to that question is, “Very few.”
That’s not surprising. Even homebuilders do not keep construction workers on staff or keep very few of them on staff. Homebuilders hire construction companies who hire contractors…etc… Presumably cities hire specialty companies to do most of their construction and maintenance tasks. And bids for those companies go up as demand for their services in a growing region go up.
>“Do any of you have a sense of how much of the annual General Fund Budget falls into the following four categories?
Well, I’d imagine the city of Davis is in the same boat as many other governments that in the past decided to provide benefits over salary compensation to compete with private job opportunities while not spending money (up front). It was essentially kicking the can down the road. So I assume many governments are having to pay larger and larger amounts of their budget towards retirement obligations. Unfortunately it’s becoming more and more time to pay the piper for those delayed compensation policies.
Keith, you and I are approaching this from two very different angles. You appear to be focused on new hires, while I am focused on existing employees. I could be wrong, but I would expect that Davis experiences considerably less than 25% turnover in any year, which means that existing/continuing employees outnumber new hires by at least 3 to 1. Tracking what other municipal jurisdictions are paying for the same positions makes a lot of sense in the new hires game, but the old expression “two wrongs don’t make a right” applies in a situation where the other municipal jurisdictions are chasing their tails driving up the dollars offered without any consideration to the value the position delivers.
There isn’t any reason to mimic other jurisdictions’ foolish salary decisions … unless the municipal jurisdiction is seeing an increase in employee departures to go to the same job in other cities. CPI, or some other tracking of the buying power of a dollar over time makes immense sense in handling the “parity raises” for existing/continuing employees. Extraordinary employees would be eligible for merit raises over and above parity raises, based on the extraordinary value received by the City from the employee’s work.
CPI would not apply to outside contractors, who ideally would be selected in a competitive bidding process.
Looking at the annual Budget for the 2021-2022 year tells us an interesting story
The total General Fund expenditures were $72.9 million.
Of the $72.9 million, $52.6 million were for Salaries and Benefits … 72.1% of the total
$5.9 million were for Contractual Services … 8.1% of the total
$9.3 million were for Other Operating Costs (Overhead?) … 12.7% of the total
$1.1 million was for Cost Allocation (definitely Overhead) … 1.5% of the total
$0.2 million was for Debt Service (definitely Overhead) … 0.3% of the total
$3.8 million for Transfers Out (Overhead?) … 5.2% of the total
As you can see, the proportion of costs that are affected by the inflation in the Sacramento Region Construction marketplace is minimal.
>”Tracking what other municipal jurisdictions are paying for the same positions makes a lot of sense in the new hires game, but the old expression “two wrongs don’t make a right” applies in a situation where the other municipal jurisdictions are chasing their tails driving up the dollars offered without any consideration to the value the position delivers. There isn’t any reason to mimic other jurisdictions’ foolish salary decisions … unless the municipal jurisdiction is seeing an increase in employee departures to go to the same job in other cities. ”
The value a position delivers is dictated by the market. If Davis offers a job as an accountant at $65K per year and West Sac offers a similar job for $75K; I’m probably going to favor the West Sac job in my job search. If I’m employed as a city Planner for $80K a year and I see that there are job openings in Vacaville for $90K; then I’m going to consider it….especially if I’ve been working at Davis for a while and I’m locked in at $70K per year and there’s a $90K opening. So some compensation adjustment needs to be made or I’m leaving. Or if I’m a Planner and developers come along and offer you $80K plus bonuses (per entitled lot for example) I’m going to consider it. In fact at the local level the cost of living is generally higher in Davis surrounding cities (in a great bit of irony…there’s that housing issue!). So it would make sense that Davis would have to pay a bit of a premium over surrounding cities for similar positions because of the local higher cost of living. That’s how the job market works.
Now if you’re looking to be a fiscal Hawk about city hirings; that’s great. I’m all for it. But simply analyzing numbers and applying other numbers isn’t how to do it. You have to look at WHY numbers are being applied as they are. You need to do a deep dive into the city’s hiring and compensation practices, rules, guidelines and policies that the city uses. Where do they get their job market data? How do they make those comparisons? What region to they use (greater Sac region? Yolo County? Sac/Vacaville?). How are raises calculated? Are they based on job market rate adjustments or a cost of living adjustment? What is the formula for that raise/adjustment? What does the job market look like for certain positions? How long does the average position stay open? Is there a priority to some positions? Thus adjustments to offered compensation to keep a position from being open too long? There is all kinds of qualitative data that can be gathered that go in to create the numbers you’re looking at.
>”As you can see, the proportion of costs that are affected by the inflation in the Sacramento Region Construction marketplace is minimal.”
You’ve listed the General Fund data; which I don’t believe is relevant city construction.
The city lists $26.7M for City Wide Infrastructure: Capital projects are funded with capital project funds, enterprise funds, and ISF’s. https://www.cityofdavis.org/home/showpublisheddocument/17344/637813053672630000 Of which $12.97M was used for Streets, Bike Paths and Transportation. Enterprise Funds for which Water, Sewer and Transportation are listed. All those construction and specialist contracting companies are likely being hired out of those parts of the City Budget and not the General Fund. And those contractors are looking at capital improvement projects from the entire Sac region. So these contractors are likely in demand. Hence those construction costs have likely been rocketing upward to a degree that the city of Davis can’t keep up with at it’s previous rate of infrastructure maintenance
So like I said, knock yourself out if you want to make sure the city is properly spending our tax dollars. I’m all for holding our civic leaders accountable. But I also want to be fair so I think you need to do deeper dives into the data.
Gloria Partida is absolutely useless as a policymaker and representative. She allowed the City to ignore the conditions in Slide Hill Park for years and then did nothing to press for necessary repairs that took a year to complete— a year when much of our park was inaccessible and surrounded by safety fences. I will vote No on this measure and anything else she has the temerity to put before the voters until we finally send her packing in 2026.