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.
Well Don, it is interesting that you pull that one question and two comments out of three different contexts that span three weeks, but I’ll bite.
First, the January 2nd post is a question to you. It doesn’t advocate for anything, much less a solution. It quests for understanding within the context of the discussion that it was a part of. What was that discussion Don? Did you ever answer the question?
The January 19th post again has context that you conveniently choose to ignore. The response was neither manipulative nor dishonest, as you clearly and cutely indicate. Nor did it advocate. It was immediately preceded by Toad’s clamoring cry posed to David and me that he wanted to know what solutions either of us were considering. So my response lays out one simple fact and then responds within the $71 million 5-year deficit context of the preceding posts in the discussion.
Which gets us to the third post you have quoted, and I have nothing to say about that post other than it is 100% accurate on its face.
In aggregate your post adds one more shining example of the veracity of the article’s first sentence.
You then went on to disparage sales taxes, using the Robin Hood analogy, clearly suggesting you oppose them by the language you chose. Yet 17 days later you are saying sales tax will be necessary.
That is manipulative and dishonest.
Your Jan. 19th post was clearly advocacy for a particular course of action (“we have no choice … it should be on the ballot”). Anybody can see that is advocacy. So your comment that it is not is manipulative and dishonest.
You then deny advocating a course of action on Jan. 24, which is dishonest.
And this is a repeated pattern.
Context Don. Context. You were proposing a Sales Tax as the sole solution. In that context not only is the Sales tax itself regressive, but your total tax package is regressive, because it has no balance, no tempering influence. The post of mine proposes the exact same Sales Tax as 25% of a tax package that blends different tax instruments so that the regressive aspects of the sales tax component are tempered by the significantly more progressive Parcel Tax (or its variant, an Ad Valorum Tax) that makes up 75% of the total tax package.
So that was neither manipulative nor dishonest. It was simply addressing a more complex situation than the overly simplified approach that you were talking about on January 2nd. Two very different scenarios, and two very different discussions.
You clearly don’t understand what advocacy is. Advocacy is proactive. It charts a course. My response to Toad was the antithesis of proactive. It was 100% responsive to his entreaties for the articulation of a solution. I had been very clear in the dialogue that we hadn’t even identified the length and breadth of the problem, so jumping prematurely to the consideration of solutions was exactly that … premature. I gave him what he was clamoring for … with a little bit of hyperbole thrown in to spice it up.
If I am advocating for anything, it is that we have to get up front and personal with the problem we face. We need to gaze deeply into its eyes. We need to become familiar with all the pores of its skin. We need to come to grips with the fact that it is almost surely a $100 million per year problem that is going to last for a minimum of 20 years. As I said at the end of today’s article, we are very much in the neighborhood of rock bottom, but 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.
It is apparent that you don’t want to engage that message. You find it much more to your liking to focus on the messenger. That is your prerogative and I’m cool with it.
That statement is false. It is dishonest. I have disproven it so many times that for you to repeat it here is a lie.
Don, again you totally ignore the context of your words. In this case you have copied and pasted precisely and exactly “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?” Within that conversation referenced, what tax burdens did you propose? The answer is simple … none. The sole burden on taxpayers that you proposed in that January 2nd conversation (which you chose to quote as your example when calling me a liar) was regressive. If you can show me otherwise I will shout apologies to the rooftops. The simple truth is that you can’t.
Don nails it and you Matt and found the quote that caused me to challenge your solution with my “Good for the goose good for the gander” reminder about you assuming that you have no skin in the game. You are definitive in what you say IS THE SOLUTION while in addition to proposing taxes you won’t pay would be politically suicidal to put forward all at once likely causing one or both to fail and resulting in a severe reduction of services. We can already see that the City is taking a more cautious approach. Now you may not like their approach or feel its the best solution but at least it doesn’t have the cram it down their throats insensitivity your proposal commands.
I was more than definitive Toad. I was hyperbolic. Choose to read the hyperbole any way you want to.
Now, with that said, where do you see the advocacy in the post, which I again repost below for easy reference. I acknowledge your point about the bitterness of the pill. Is acknowledgment typically part of advocacy? In a word, “No.” Is explaining the legal facts of a City’s ability to operate with a deficit General Fund balance advocacy? In a word, “No.” It is simply a dispassionate recitation of factual information. I point out the incompleteness of your statement about Pinkerton’s laying out the problem. Is that advocacy? In a word , “No.” Again it is a simple recitation of factual information.
You are confusing fact checking with advocacy.
——- repost ———
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.
Then don’t get all worked up about what happens to the hyperbolic messenger.
I’m not worked up at all. Don is worked up. You appear to be mildly worked up. The evidence is clear. The focus is on the messenger rather than engaging the message. It’s a Walt Kelly moment.
Just spoke to Matt… we’re cool. [As if anyone cares]. Posting, like e-mail, has the potential of “venting”, and being mis-understood. Suggest we communicate in a manner we can collaborate.
i commend you for handling it in that matter, unlike toad who chose to keep firing blanks.
Let us know, 24 hours from now, whether you should have used the term “shooting blanks”… your call.
BTW “firing blanks”, or “shooting blanks” is often used by those who have low sperm count, and are not able to procreate. Will assume you are not saying Mr Toad is impotent.
it was a metaphor
Matt didn’t call me he posted it on the blog so I responded on the blog. What’s your problem? i don’t think Matt or I are mad at each other. I think telling other people how they should spend their money is wrong especially if you have no money in the effort.
my problem is that i believe our city is in trouble and you have tendency to make wry and insulting remarks while shifting the topic and the blame.
here’s the core message:
this city is in trouble. it made promises to city employees that it can’t keep and instead of owning it up, you are doing everything you can to protect 300 employees over 70,000 residents. that’s my problem.
Those 300 employees already took cuts. Do you think the next thing we should do is cut them more? My argument is two fold. First since they already took cuts we should look elsewhere first including at our own lifestyle choices about things like housing and development. Second arguing for pension cuts for existing employees has legal impediments so we need to be realistic about how we proceed.
je d’accord… big time.
Thanks for the support Hawkeye.
“Those 300 employees already took cuts.”
Not really, they agreed (or had imposed) reductions in the rates of increase of their benefits, but no real cuts.
“Do you think the next thing we should do is cut them more?”
Yes, a cap on total compensation should be implemented as soon as possible.
“Second arguing for pension cuts for existing employees has legal impediments so we need to be realistic about how we proceed.”
Agreed. They should be given the option of making the concessions during negotiations, or whenever possible, having their job outsourced.
There is no guarantee of employment, or at least there shouldn’t be.
Mark: I’m fairly sure that even employees can’t opt to take reduced pensions. At best they can pick up a larger percentage of their share.
No real cuts? They are contributing more toward their pensions and can take out less in medical benefit cash out. Those are just two ways that compensation has been reduced. For all i know there could be others and there could be more coming. What are you putting on the table?
Just hope that your employer does. If they have, your situation will turn out better than what you seem to want for City employees.
Am suspecting you got “screwed” by what you expected for your reality. I understand anger, and the desire to make others suffer the same. Wrong [in my opinion], but understandable.
we took our hit a few years ago, furloughs, 20% pay cuts, etc. far more than the city employees have been asked to take.
i think you’re being presumptuous about my personal positions. my problem is that we have gotten to the point where city compensation is unsustainable. so we expect the taxpayers to pony up and support a tax, the taxpayers to take service cuts, but somehow, the employees are sacrosanct.
They are not sacrosanct but they have recently taken cuts. If I am correct you have been opposed to growth. It is those who have been opposed to growth who I think should pay up for their lifestyle choices. Davis has made a conscious effort to avoid exploiting our I-80 frontage for business development. We just put an ag easement on a huge piece of land with I-80 frontage. These decisions also have had an impact on local tax receipts and therefore the city budget. i don’t think it is unreasonable for the people of Davis to pay additional taxes to make up for what these policy choices have cost us and even though I oppose those policies i believe I should pay my share since I have benefited in some ways from those decisions.
“they have recently taken cuts. ”
I want to respond to this point because while it is true that they recently took cuts, the cuts they took needed to happen in 2009. But they did not happen in 2009 and so we are really behind the eight-ball. The ramifications for that failure are tremendous. First, we have four years of savings that did not happen. Second, we deferred maintenance which will cost us tens of millions. Third, instead of being able to cut salaries, we had to offset benefit cuts with small salary increases.
I don’t disagree with you that we are going to need tax increases, but as I wrote this morning, I think some of those are going to be tough for the public to swallow. The decision on Mace 391 has nothing to do with the present situation. In a few years perhaps we might have seen the fruit of that, but not for the current fiscal year.
Its all going to be tough to swallow however it washes out but i think people should take responsibility for the consequences of their lifestyle choices on the revenue supply side. If we should have made those cuts years ago we also should have done the same with actions designed to raise revenue years ago. You want to put it all on the workers but then get all picky about how we should go about generating more revenue as if retail near I-80 or housing was the same as a nuclear power plant or a coal plant. A good friend told me a long time ago that someday the opposition to growth in Davis was going to catch up that we had long been able to pay people well while tapping the residents to cover deficits instead of growing our economy. It appears that nothing has changed but as the day of reckoning arrives it appears that everyone wants to blame everyone else instead of taking responsibility for their own choices. Its sort of like that Quentin Tarantino movie where they all kill each other in a final shoot out. That is where we are headed and all this talk of demands in order to support raising revenue is just one more gun pointed at another variable.
“Its all going to be tough to swallow however it washes out but i think people should take responsibility for the consequences of their lifestyle choices on the revenue supply side”
But what about people taking responsibility for the consequence of their lifestyle choices on the expenditure side. That’s really where we got out of whack – we spent money that we didn’t have. We created unfunded liabilities and then attempted to balance the budget by not paying for repairs – roads, parks, buildings, sewer, water lines, etc.
personal note Mr Toad… was about to respond to Matt in this forum, then decided to talk directly to him. I have definite disagreements with his positions on different things, but have always perceived that he is sincere. [Even when I think he is incorrect, or when I think he “over-reaches”]
I have never had coffee with him, but look forward to coffee or a beer. I “outed” myself to him a few years ago, and we have discussed ‘stuff’ interrittently.
I also regale @ times [lots] at people to tell me what to do, or think.
My opinion [and my suggstion] is watch our language, don’t get ‘personal’, avoid inflammatory rhetoric, and use this page to find consensus, if we can.
I once had an illuminating conversation with Brett Lee about installing a fireplace insert. It was about being mistaken in thinking he was telling me I should buy one. He told me he knows he never told me I should buy one because he would never do that. I knew he was correct because implicit in his statement is an understanding that it is inappropriate to tell others how they should spend their money. Certainly Matt understands this concept since he worked in finance all those years.
Mr. Toad
Perhaps I am misunderstanding you. You are stating that it is wrong to tell others how to spend their money, and yet you seem to have no problem railing against those who prefer no to slow growth. Why do you think it is wrong to dictate economically but feel it is fine to dictate someone else’s life style ?
And do you also believe that a renter shouldn’t be able to vote on a parcel tax?
Sure taxes are a cost passed through to renters.
To clarify renters should be able to vote.
i’m not dictating your lifestyle. I’m challenging the impacts your choices have on others.
We have chosen to live in a city. All of our choices will have impacts on others. I have consistently said that I am willing to pay more in taxes for the lifestyle I prefer. You have consistently said that you prefer rapid economic and population growth. Surely a prudent solution is going to have to involve some form of compromise. I am not pretending that my preferred solution would not negatively impact others and would prefer that we all honor the others point of view as a valid perspective in our community.
” I “outed” myself to him a few years ago, and we have discussed ‘stuff’ intermittently.”
What is it about Matt that encourages the “outing” of ourselves to him?
Circumstances. Know him professionally.
Question, when the NRC comes up with suggestions to the city council for different programs like fireplace smoke, plastic bags and DWR do the resulting ordinances and rules apply to El Macero?
That G.I. is a rhetorical question. You already know the answer.
For the record, no they do not. However, I have observed an almost complete dearth of fireplace smoke in El Macero over the past 24 months, and I know for a fact that other than one weekend in early December when our furnace conked out on Saturday night and we had to heat the house with our fireplace (using for the most part the gas igniter bar rather than wood fuel), my wife and I haven’t reduced the size of our wood pile in two years.
Although the City’s DWR rates and rules don’t de jure apply to El Macero, they do apply de facto
Finally, since we have no stores in El Macero, we already have a plastic bag ban in effect. 8>)
And as far as DWR goes?
Matt, you can [pun intended] correct me here, but the El Macero CSA has a separate contract with DWR, independent of the City
Actually hpierce, I believe each El Macero resident has an individual contract with DWR. We each receive an individual quarterly bill directly from DWR. No County involvement. But as noted in prior posts, the rates we pay are very comparable to what City residents pay, with the only likely difference being the timing of when annual price increases appear on the bill.
Are residents of El Macero allowed to run for Davis City Council seats?
ABSOLUTELY not !!!!!
So El Macero residents can’t run for Davis City Council but are allowed to sit on Davis city committees and commissions?
Yes. The Council changed the prior “City Residents Only” rule in 2012. School District committees and commissions have always spanned the school district boundaries. Council wrestled with boundary issues when they created the Water Advisory Committee. The issue they wrestled with was that the Enterprise Fund that encompasses the Davis Water System covers an area that is larger geographically than the City Limits. Combined the DJUSD and WAC experiences caused them to adjust the focus from “city” to “community.”
Okay, thanks for the clarification. I can understand DJUSD and things like WAC that do involve El Macero residents but in my opinion people shouldn’t be sitting on committees and help steer policy if they aren’t directly affected and/or in some cases don’t have to abide by the decisions.
I understand your perspective, but here is a question for you … does that mean that you support a Davis residency requirement for all the consultants that the City hires to give the City advice?
If I recall correctly, Matt was at least one member of the NRC that opposed a plastic bag ban, instead I believe he supported a charge for both plastic and paper bags.
You do recall correctly B. Nice. I did advocate for that in the NRC meeting.
NOTE: Emphasis provided for the benefit of Don Shor.
Matt, if Davis has to hire an expert consultant because our locals need input then yes it’s okay if they don’t live in Davis. But I, who lives in Davis, can’t imagine sitting on a committee for El Macero, or say West Sac, Woodland or Dixon and dictating proposals for those cities that don’t apply to me.
Mr. Toad said . . .
“Matt didn’t call me he posted it on the blog so I responded on the blog. What’s your problem? i don’t think Matt or I are mad at each other. I think telling other people how they should spend their money is wrong especially if you have no money in the effort.”
Toad, I think you read too much into my post in the other thread. I didn’t tell anyone what to do in the other thread. I simply pointed out that the debt service on an $8 million dollar a year borrowing to cover 20 years ($164 million total) would convert that $8 million per year capital expenditure into a $13 million per year debt service payment (at 5% interest over 20 years). I also opined that paying $13 million per year would not improve the annual Budget deficit, it would actually increase it by $5 million per year. That isn’t telling you how to spend your mone, rather it is telling you what are the fiscal consequences on the course of action you proposed.
There was a post you made where you said something to the effect of we should pay up front that borrowing was wrong and too expensive. I forget the exact wording and the time and article but it was previous to the one you quote which was sort of a re-iteration of a previous one. My calling you out was a response to a combination or aggregation of those posts.
No, I didn’t say it was wrong. What I said was that it was fiscally irresponsible. The first is a value judgment. The second is a mathematical calculation.
Matt,
I disagree – due to the limitations of public sector funds accounting, formal debt financing of major infrastructure improvements IS THE ONLY PRACTICAL WAY OF ESTABLISHING A BUDGETARY PLACEHOLDER for the ongoing expense of such maintenance. In the private sector, it would be depreciation, in the public sector it is debt expenditures.
Is there some other way you would suggest?
Let me channel Mr. Toad in sharing this suggestion … one alternative, realchangz, would be to follow a “Pay as you go” approach.
The most important advantage of that approach would be an absence of “legacy debt” that we pass on to the members of our children’s generation. A more colorful way to describe that alternative is, “Don’t kick the can down the road to the members of our children’s generation.”
The most notable disadvantage of that approach would be the need for a recurring revenue stream that is sufficient to actually may the payment as you go.
It is interesting to note that in December 2012 Staff supported and Council approved water rates that treated the $37 million of capital maintenance of the existing water system as “pay as you go” in computing the annual Revenue Requirement of the water system in ther new rate structure. Both Staff and the City’s Financial Consultants felt that that approach was the most fiscally sound approach.
However, the perspective of the Davis business community was different. They presented a very logical argument that taking that $37 million out of the local economy by reducing the discretionary spending at local businesses by the $37 million would do significant damage to both local businesses and the local economy. So, in the final rates approved by Council in January 2013 the $37 million was paid from the proceeds of a bond. That reduced the Year 5 Revenue Requirement from $29 million per year to $23 million, but it meant that the $37 million principal amount plus approximately $15 million in interest will have to be repaid in the years after 2018.
Lol. That’s rich. Hate to let you down, but that term has already been taken – by the government. That Is the basis of the accounting that has brought us to where we are today!
Why do you think you are channeling me? I could not disagree more. In general not carrying debt is the best option but it may be prudent to incur debt under certain conditions and it isn’t always irresponsible to do so especially in times of low interest rates like we have today and when the infrastructure will last over the life of the loan. Also it is prudent to borrow money if the cost of continued deferral increases the cost of repair as we see with the steep cost curve as roads deteriorate. Further, it is this sort of judgmental pontification, calling people irresponsible unless they pursue the course you prefer that I find offensive especially when its not your money. Make your case but don’t insult people who might want to fund it differently. You aren’t the one who has to pay it so you shouldn’t be patronizing others by asserting that only your view is the correct one. Trust that they will make the decision that they believe is in their own best interest after considering all their options and respect their right to male that decision with their own money.
Lol. That’s richh. Hate to let you down, but that term has already been taken – by the government. That Is the basis of the accounting that has brought us to where we aretoday!
Literally, all accounting for “Other Post Employment Benefits” is reported on a “Pay a You Go” basis. Those are the exact words. What it “means” is that we pay only for what is actually paid out in benefits this year. Kind of like the “minimum due” on your credit card. Sorry if that doesn’t comport with your notion of what the term “should mean”- but that’s your government’s definition of what it actually means.
I remember a quote that goes something like: “love begets conflict…conflict begets understanding… and understanding begets love.”
Another quote I am fond of using, “If I don’t argue with you, I probably do not like you very much.”
Someone recently posted a Facebook quote that said: “I’m actually really nice, until you annoy me.” I certainly resemble that remark.
IMHO, arguing cool. Battering/maligning, not so much. With that distinction, I agree. Always told my employees that the most disloyal thing they could do was not confronting me when I was making a bad decision or messing up.
I agree. Although personally I find there are some people that are not very skilled at differentiating an argument with battering/maligning. For example, if I say “liberal”, they tend to take it like a personal attack. If you say “conservative” I tend to take it as an attack against an ideology that I happen to more inclined to agree with. And since and ideology is just a set of ideas and beliefs, I think it is exactly appropriate to use that category/label.
I see a two-way street needing to be constantly maintained. One side needs to practice being more sensitive, and the other side needs to practice being less sensitive. Otherwise we just stop talking to each other and that, I think, is worse than arguing.
“If you say “conservative” I tend to take it as an attack against an ideology that I happen to more inclined to agree with”
FYI, when I say it, it’s meant as an insult, please take it as such 😉
Frankly
When you say “liberal” I hear it as a label, perceive your intent as a prejudgement of my beliefs…… and personally consider it as a compliment ; )
“…the combined materials and labor associated with streets maintenance are expected to experience an inflation factor of between 8% and 9.5 % per year…compounded over 20 years, $21 million magically becomes the $129 million reported to Council by Staff on December 17th….”
We’re heard this kind of projection for a few years. I’m curious from where it comes; what special foresight do these prognosticators have? What’s the level of inflation averaged for the last 20 years?
If you’ll give me some guarantee of 8-9.5% inflation through 2024, I can get working on financial planning for my retirement. I need a little of this magic in my personal life.
I think it has to do with labor and materials cost inflation AND the fact that more extensive work is required when the roads are not maintained well enough.
Certainly there are many hyper-inflationary areas that exceed the CPI. Education costs come to mind.
“What’s the level of inflation averaged for the last 20 years?”
i believe it was reported to be 9%. see the mayor’s comments about the other fact, which is that as pavement conditions deteriorate the repair costs soar from $7 per square yard to over $60…
Yeah, too bad we hit the road fund to buy 391. I wonder what the differential is between what repairs that money would have bought and what the money we got back will buy on roads that have had repairs deferred over that time frame? This is a good example of how the choices we have made impact the situation we are in and why its not all the fault of the unions.
Toad . . . that “Elephant” has left the room.
Sadly, but I think it is still important because people act like the only reason we are upside down is because of the generous contracts employees have gotten when that is a problem on the expense side these same people tend to ignore what their lifestyle choices have done on the revenue side. Imagine i’m a liberal supply side Toad.
You are correct, mostly, Mr. Toad, and the same can be said of DJUSD.
Toad…80% of the general fund budget is used to fund payroll. We are upside down because of compensation. No other expenditure even comes close.
We are also upside down because we have failed to secure revenue to pay those obligations. So you want to take it out of the workers while i want to grow our economy. Certainly Mark you understand that the more dynamic and robust our economy the less we need to cut and certainly you understand that asking those who demand a quality of life that undermines our fiscal responsibilities should be willing to step up and pay more for that quality of life they covet.
Toad: Of course I understand that a more robust local economy would allow us to better pay our obligations, but even if that robust economy existed today I would still say that we are overcompensating staff. There is absolutely no justification for the benefits that we offer city workers. Their total compensation needs to be cut regardless of how much money the City brings in through economic development.
Two major factors…
Cost of oil, which is used to manufacture asphalt concrete pavement.
Cost of private contractural labor (City doesn’t do major maintenance). Not sure of the ‘drivers’ there.
Minor factor: think the #’s were based on worst-case scenarios, so as to not understate, and to create more political will to pass revenue measures. I get that.
The source of that information was the City’s pavement consultant, Ryan Shafer, P.E., G.E.
Associate/Division Manager
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NCE’s pavement engineering services emphasize realistic economic solutions to our client’s needs. NCE’s engineers utilize pavement design procedures tailored to our client’s needs and our engineers have access to in-house state-of-the-art technology and apply it to real world applications. Our Pavement Design staff focuses on infrastructure projects which include resurfacing of existing roadway and bicycle and pedestrian facilities. NCE staff is well versed in pavement design, using the latest AutoCAD and Civil 3D software. They also stay updated with the newest design alternatives thus are able to advise our clients with the most cost-effective treatments as well as the “tried and true” methods upon which infrastructures have been built.
“this city is in trouble. it made promises to city employees that it can’t keep and instead of owning it up, you are doing everything you can to protect 300 employees over 70,000 residents. that’s my problem.”
For some reason, I hadn’t thought of the potential city staff suffering the way Davis Progressive presents the dilemma. In fact, we couldn’t afford the level of employment we had five years ago if we were deferring maintenance in order to pay them then.
Given the historic, rapid increase in costs for current employees, how can we expect to ever get even without cutting staff even more? Seeking more tax revenue while still not keeping up with maintenance needs seems to put us on the same unsustainable path.
Hoping that our residents will do what’s needed even to be dreaming that “economic development” somehow will solve our fiscal problems seems unrealistic given our history.
So, a few general observations to ponder:
With respect to public sector employment, does it every become the responsibility of the employee to pay attention to the fiscal and accounting practices of their employer? Checking the annual report, reading the footnotes, etc. (to the extent that such reports are available)
Does it ever become the responsibility of the public sector employee to formally challenge the policies of their employer in their accounting and fiscal management of the employee’s pension and retirement programs?
In the instance of public sector employees who are members of an organized labor group, with formally elected representatives and paid professional labor negotiators – is it ever the responsibility of the elected leaders or the paid representatives to “inform the member that their employer is continuing to fail in their obligations to put the funding necessary to support the promised pension and post employment benefits?”
In the instance of public sector employment, and associated retirement benefits, is there any body of law or regulations which operates in similar manner as for the private sectors?
The reason for these questions is the body of law and regulations which do apply to private sector employees and associated retirement benefits. These programs and benefit are governed by requirements of the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is a federal law that sets minimum standards for pension plans in private industry.
While ERISA does not require any employer to establish a pension plan, once such plan is established then the guidelines for its administration become crystal clear.
“ERISA requires plans to regularly provide participants with information about the plan including information about plan features and funding; sets minimum standards for participation, vesting, benefit accrual and funding; requires accountability of plan fiduciaries; and gives participants the right to sue for benefits and breaches of fiduciary duty.”
Just thought it might be helpful to inform those who might be unfamiliar with the requirements applicable to private sector employers when the general public is about to be asked to engage in the conversation about “unfunded liabilities” and, more to the point, is requested to absorb the attendant budgetary impacts from same.
Just curious, I guess. I would very much like to know how public sector employees feel and how they view the matter when issues like “legacy debt” begin to impact current operating budgets as we are beginning to see now.
An observation on the 69 comments in this thread (including this one). 23 actually engage the message in one way or another. 41 focus on the messenger. 4 stray off into “other” issues.
What does that say?
That the first sentence of the article is alive and well in Davis …
“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.”
Some of these problems can be alleviated by outsourcing work and laying off city employees. Fewer employees means fewer buildings to maintain, fewer pensions to pay in the future, fewer offices, fewer supervisors, etc.
From “Cell Block Tango”
He had it coming, he had it coming
He only had himself to blame
If you’d have been there, if you’d have seen it
I betcha you would have done the same
Mr. Toad,
I don’t get out much and same for reading and movies, so with apologies, I don’t have the specific context of your comments. But I do think I understand the sentiments.
And, I think you might be surprised how much company you have. For, in the end, it is the system which is broken and benefits none of us except those who control the levers of power within the system.
Certainly it doesn’t help in protecting the best interests of the rank and file employees and clearly it doesn’t help protect the unsuspecting taxpayer.
You may there exists a very high degree of common cause in bringing greater transparency and integrity to the process of public oversight which you see emerging in this online community.
I think that this may be the one uncontroversial substantive comment on this thread. What David seems to be increasingly successful in doing is to create a space where contributors have started to focus more on discussing issues than casting aspersions on the authors.
Matt’s understandable perception of a target on his back ( or apple on his head) not withstanding, I am seeing a positive trend in the posts on this blog and am appreciative of what may represent in part an awareness on the part of participants that the Vanguard has made a deliberate move away from a more potentially inflammatory tone to one of more reasoned discussion.
Its from “Chicago.”
Of course there are problems and they have been exacerbated over time by inaction. Let me list a few of the problems just so you can see that I’m actually more honest than you know or most anybody else is willing to recognize with their own prescriptions.
3% at 50 with the city picking up the employee portion of the contributions for public safety workers. Well bust my budget! But the problem is that unwinding what has been created is not as simple as most of the conservatives here want to believe because of laws that protect peoples pensions. Possible current solutions include greater contributions from employees, reduced benefits for new hires, reductions in staff or finding more revenue to pay our obligations.
Retiree health care costs. When you retire around 50 or 55 it creates a large liability for the city to pick up to pay for your health care until you are eligible for Medicare. Raising the retirement age for healthy employees and negotiating greater contributions from employees through the collective bargaining process might help some but i will admit this is a big problem and I don’t have good answers that legally can unwind currently vested obligations. One thing is certain the 5 year bar for being granted lifetime retirement health benefits is an archaic and expensive relic that if it wasn’t done away with in the last round of contracts should be first on the chopping block next time.
There are probably other things on the employee side like holding the line on raises but in my mind layoffs, outsourcing and pay cuts should be near the bottom of the list after many other possibilities have been exhausted including reaching for more money on the revenue side.
On the revenue side we need to raise taxes and generate new revenue to cover our existing obligations and lessen the blows to employees. We should remember that the finest form of leadership is by example so we are in a stronger negotiating position when we put something on the table that shows we are doing our part. An increase in sales tax and a parcel tax seem to be on the table. That we need both shows how bad the situation has become.
We also need to foster economic development to grow our tax base. For too long this community has been steadfast against development. Even now for too many it is a sacred cow where opponents of growth demand we walk on eggshells in how we proceed. It amazes me that some of the loudest voices for fiscal reform also are the most steadfast in opposing economic development that doesn’t fit into their ideals of what is acceptable. People who oppose growth must accept their responsibility for the low revenue base their demands have created. They need to pay up or accept that the level of services they demand are not sustainable with the obligations that have already been encumbered by the city.
Finally we need to think differently about our budget. The era when we could do everything everybody wanted is gone. The redevelopment money we borrowed to build a parking structure that never got built was an expensive waste. The pass through agreement between the City and the County needs to be re-examined to see if there is a way for the city to retain more of the money. I imagine there must be other areas of the budget that could be re-thought to save money although i will readily admit i have little familiarity with what is inside every line and what possibilities exist for savings.
Last but not least we may need to stretch out our road rehab costs through borrowing. We need to be careful with both interest expense and duration of loans but this may be a way to proceed that helps us manage digging ourselves out of the hole.
Reply to Matt Williams:
“If you can show me otherwise I will shout apologies to the rooftops. The simple truth is that you can’t.”
Same thread:
Now stop misrepresenting my positions.
Well done Don, you take two subsequent posts and and attempt to use them to justify your position ex post. Further, you still don’t recognize the difference between a question and a statement. Let me pose the question to you again. Maybe you will have the courage to answer it this time.
It really isn’t that difficult a question.
No Matt, I am explaining that you misrepresented my position. If you also believe a sales tax is going to be part of the answer to the current fiscal situation, as you seem to have said elsewhere, then I see you have come up with your own reasons as to why it is necessary. Thus I don’t need to answer your manipulative questions.
I think this thread — wherein you misrepresent my position, deny it, and then try to deflect the discussion — should explain to you why I no longer engage with you on the Vanguard. Because your actions on the Vanguard are manipulative and dishonest. Don’t look for further discussion with me on this thread, or likely elsewhere.
Don, I think you need to look in the mirror. I didn’t bring your position up, you did. The two words Don Shor had never been uttered in this thread until you made your post to B. Nice.
Questions are questions. They simply forward dialogue and peel back the layers of the onion. What causes you to label a simple question “manipulative”?
Be sure to take your sandbox with you when you go.
Why don’t you guys take it over to my piece of the state wide plastic bag ban, it’s kind of slow over there…