Last year the new Davis City Council was handed a chance to really start over when Bill Emlen suddenly announced he was headed to Solano County. Publicly, the council and the public were quick to heap praise on Bill Emlen.
At the same time, most with familiarity with City Hall understand that Mr. Emlen was a man of profound limitations, who greatly contributed to the current pending crisis through a series of mistakes where he first underestimated the nature of the problems. He then failed to take proper leadership in rectifying the problems, not only of the pensions and unfunded liabilities, not only the missed opportunities with the fire department Grand Jury report and the last round of labor contracts, but also the consistently overly-rosy budget projections.
Every step of the way he was aided and abetted by the leadership of Don Saylor.
So, with Don Saylor and Bill Emlen gone, a new council in place, it seemed that the time was ripe for the types of changes we need.
This background is important for understanding current interim City Manager Paul Navazio. At a personal level I like Paul Navazio, as he is professional, he works hard, and in a lot of ways he is sincere and has some very good ideas for re-shaping the city.
But there has always been the nagging feeling in the pit of the stomach about Mr. Navazio. From the very start, he appeared to be a guy that would say what the person in the room wanted to hear. I had heard this from others, but saw it myself as well.
His budgets were always overly rosy. I remember the 2009 budget very well, because Lamar Heystek developed an alternative to that budget with much more realistic revenue assumptions. Mr. Heystek was ridiculed by Mr. Saylor, who basically called the numbers made up and suggested that they use real numbers. Of course, it turned out Mr. Heystek’s numbers were pretty close to right on and Mr. Navazio’s numbers were overly rosy.
This is but a tangible example of what people like Councilmember Sue Greenwald had to deal with for years.
The bigger problem is that I have long suspected that Mr. Navazio is hiding numbers on the real impact that pensions and the unfunded liability will have on the budget.
It is very tempting to try to excuse some of Mr. Navazio’s budget projects by arguing that he was essentially forced by those in power, namely Bill Emlen and Don Saylor, to paint an optimistic picture of the budget. Whether this was overt or implied pressure, I do not know. But I have heard a number of people on the inside in the last several months say the exact same thing.
As I said, we might be able to have given him a pass on past budgets, but he is running the show with the present budget, he has a council pushing him to go further in cuts, dealing with unfunded liabilities and the whole nine yards.
And yet, we see the exact same thing from him. An overly-rosy budget that argues if they make these cuts, some of them painful, they will have a budget surplus in the out years of the five-year projections.
The problem is that those projections make wholly unrealistic assumptions that you can keep salaries flat for the next five years, that PERS (Public Employees Retirement System) rates will remain the same, that CalPERS will keep their ARR at 7.75% for the next five years, etc.
The chance of those assumptions alone holding seem very remote, and yet we are dealing with millions of dollars per quarter percent tick of the ARR. Millions.
This is very telling because it suggests that Mr. Navazio is what we saw him as Finance Director.
The city’s budget balancing plan was really to produce a permanent stop gap. Instead of doing a study of the services that the city provides and prioritizing those services, we saw a budget balanced largely on who was retiring or transferring.
That is understandable in year one of the budget crisis. But we have been in a recession now for three years and there is still no plan. The council is finally pushing the city manager to do what should have been done in 2008, or at the very least in 2009.
Instead, we had a policy of burying our head in the sand and hoping it would go away.
I see no illustration that leadership is coming from the city manager on this or any number of other issues. The leadership is coming directly from council that is having to push and prod the staff to make the kinds of changes we need.
It is very clear that what the city needs is a new City Manager that can come in and make the tough decisions. The city needs a new HR Director that can help lead on employee compensation issues, rather than irresponsibly create a conflict of interest by sitting in on her own and her husband’s own contract bargaining.
It is time to find that new leadership as we move toward impending budgetary and fiscal crises in the city, created by a failure of past leadership who allowed salaries and benefits to get out of control and then missed the opportunity in the last round to properly deal with that.
—David M. Greenwald reporting
Paul Navazio on his own is a definite improvement over Bill Emlen. But I agree that we need real leadership on the huge budget issues the city is facing. So far, the current City Council seems to be leading the way, but they should not have to poke and prod city staff every step of the way. These are particularly tough times, which are going to call for tough measures, no question. It is not clear to me whether Paul Navazio is up to the task or not. To some extent it takes a while to get one’s feet wet…
“The city needs a new HR Director that can help lead on employee compensation issues, rather than irresponsibly create a conflict of interest by sitting in on her own and her husband’s own contract bargaining.”
David, I’m sure that those in the know know what this refers to, but for us uninitiated, could you clarify. Sounds interesting. (I once worked at a place where the union negotiator and the district negotiator were spouses. They were also planning to retire in a few years, so whatever the “worker” got would fatten the family coffers for the remainder of their lives. We got a great contract that year; the taxpayers got screwed.)
David – I disagree with your assessment of Paul Navazio. I think you are evaluating him on a single issue which is that he did not come in with a slash and burn budget right off the bat. The City Manager’s job is not just to wring as much concessions as he can out of the bargaining units assuming the most dire of economic forecasts (remember that he has not even had the opportunity to even bargain with them yet). Rather the City Manager’s job is to perform a delicate balancing act representing 3 constituencies – the public, the city employees, and the City Council.
I think his budget presentations have been thoughtful, transparent, above-board, and faced the reality that we have a citizenry who demands top quality city services AND there is nothing he can do about the public employees’ compensation until he gets to the bargaining table again. And as to his assumptions that PERS ARR rates will remain the same, he has to reasonably use those rates to prepare a budget until PERS formally announces new assumed ARRs and contribution rates. Whether you agree with the PERS ARR number or not, that is the number he has to deal with when presenting his initial budget.
I think the real question is whether or not Paul realizes that it is a game-changer if those PERS ARR rates are reduced. But he has shown that he understands the dire implications if that happens and has acknowledged that the subsequent millions of dollars in extra pension related expenses will have to be offset by cuts elsewhere – at least until the City gets back to the bargaining table with the unions. But I think to overly slash the City budget now because some in the community think we “might” have to cut more in the future risks a real battle with citizens who have come to rely on the level of services the City provides. And Paul has to serve this citizen constituency also.
And the fact that the Council has to prod him into making certain revisions or assumptions to get the budget to reflect their goals is nothing untoward. This is exactly as the process should unfold when draft budgets are prepared and revised to reflect the diverse wishes of different members of the Council remembering that our Council certainly does not speak with only one voice. If facts and circumstances change in the future then our budget changes accordingly.
I think you should look beyond this single budget issue you are so focused on and whether or not Navazio’s budget reflects your particular economic understanding when calling for a new manager. My general take on his “overall” performance is that he is doing a very good job under a very difficult set of conditions he has inherited. Not only was the budget and employee compensation problems he inherited hugely problematic and not of his doing, but there was also a huge public relations problem he got with the new job. And that is that a lot of citizens just felt that the employees were there to serve their own interests and not the interests of the citizens. This was due to an attitude fostered by the former City manager who seemed to build a wall between the Staff and the citizens. Each thought that the other was the “enemy” instead of fostering interactions that build common ground and move the ball forward.
I, for one, have noticed a discernable shift in the general attitude of City employees since Paul has assumed the reins. I think they are becoming more open, inclusive, and are now trying to do things differently once they clearly understand that is what the citizens and new Council want. That, in itself, is a huge paradigm shift from where things were only 1 year ago. And I think the citizens of Davis see this and are slowly becoming more trusting of their City employee leadership. I attribute this to the model that Paul is setting.
I think fostering a sense of trust in our government is the most important near term change we needed in Davis and I just trust Paul to make fair, balanced, and objective budget recommendation and to relay the implications of these recommendations to the Council, the employees, and the citizens of Davis in an honest manner.
That said, I have no idea how good Paul is as a day-to-day manager of the huge City bureaucracy he inherited nor to I know how well he can muster the troops and negotiate broad based pension reform packages later. The jury is still out on those counts.
But in terms of his honesty and integrity and the degree of trust I think he as earned from employees and citizens and even the Council, that will be very, very hard to find in a replacement manager.
I, for one, would urge the Council to not rush for change just to say they have made a change. Paul Navazio is clearly a huge step up from Bill Emlen. Based on his performance so far, I think he should be at the top of the list of candidates for the permanent job.
I don’t know.
Wasn’t Paul involved in the labor negotiations when he was Finance Director?
[i]”Wasn’t Paul involved in the labor negotiations when he was Finance Director?”[/i]
Yes. And as Assistant City Manager.
It’s reasonable to blame him in part for our bad contracts. However, I think the largest share of the blame lies with the City Council. I think, going back a decade, the Council majority failed to properly advocate for the taxpayers in almost every respect. I think they fell in love with staff. They wanted to please the people who were working for the City in place of wanting to please the people. The council should never have hired members of the City staff to negotiate on behalf of the taxpayers. It really puts the staff-negotiators in an impossible situation. The Council also failed to direct its staff-negotiators to strike a sustainable bargain for the long term. And then finally they voted in favor of the contracts which were struck.
I think the negative attributes assigned to some top members of the City staff by some commenters is mostly the result of staff responding to the direction set by the City Council. That does not leave them blameless. But I don’t see how you can expect a finance director or the head of HR to take a hard line on the long-term budget when you have a solid majority of the City Council taking money from the firefighters and so on and directing the top staff to please their funders.
The question I have is whether any kind of executive search for a city manager would lead to a candidate that was likely to be more aggressive (if that is the goal) in supervising the negotiations with public employees. I assume that the field of applicants would be from people currently employed as city managers, or on track to be. I think that the direction given to the city manager by the council is what matters, and of course the recurring suggestion that they hire outside negotiators. If they have confidence in Paul Navazio and work well with him, the council members should appoint him.
“The question I have is whether any kind of executive search for a city manager would lead to a candidate that was likely to be more aggressive …”
I don’t know. I do know that the Palo Alto City Manager, James Keene, has been very aggressive with the PA unions and he has had the backing of his council in that regard and together they have succeeded in reforming their labor troubles.
What I think Davis should do, if we want an outsider, is give Mr. Keene a call and ask, “Who do you know on your staff or elsewhere who has your same type of approach?” I would guess that Keene knows another Keene who could do the job in Davis.
Most City managers are political animals. If you aren’t you don’t get ahead, so I generally agree with Don’s comment above.
Navazzio knows the issues for Davis, that’s a plus. But he also has baggage.
Te tide is definitely turning though. Stockton declared its second fiscal emergency and San Jose is following suit–this potentially allows labor contracts to be abrogated (case law still sketchy here).
If we can find a City manager who is smart and willing to take a serious look at budget issues that would probably help, but is there someone out there like that?
That is one sexy looking assistant city manager , but I wouldn’t vote for him .