Last week, the Davis City Council, while recognizing the need for revenue measures, decided that rather than attempt to cobble together a last moment tax measure, they would wait for a subsequent election to place a measure that would fund, among other things, critical city infrastructure including roads, parks and city buildings.
We were critical of this, in particular due to the fact that the council has been discussing such a revenue measure for two years, and they declined to place an infrastructure measure on the June 2014 budget, opting for a general tax measure which would increase the sales tax by half a cent on the dollar. Six months later, citing troubling polling, they declined again. Finally, they waited to discuss an array of options until December, which ultimately proved too late in a jam-packed February agenda.
However, Elaine Roberts Musser, in a letter today to the local paper, cites another problem, calling the discussion “muddled” and the deliberations “startling and unsettling.”
Ms. Musser makes a number of good and important points. The chief problem appears to be that the council was really not on the same page as to what the tax should be, how much, and what the key priorities were for expenditures.
Ms. Musser points out, “The City Council couldn’t decide what any potential tax revenue should be spent on. Disparate interests were mentioned: road maintenance, Rainbow City, more police. Reference was made to a city wish list, which includes everything but the kitchen sink.”
She writes, “Clearly there is no City Council consensus on city needs, their prioritization and how much tax revenue is necessary to pay for it.”
Perhaps this oversimplifies it, but there appeared to be three camps. One, led by Dan Wolk and Lucas Frerichs, sought to expand the current parks tax from $49 per year up to at least $99. They were willing to accept Rochelle Swanson’s direction to add infrastructure, but it was fairly clear that Councilmember Swanson disagreed with some of the more optional items on the list.
On the other hand, Robb Davis and Brett Lee seemed more interested in funding roads infrastructure first, but may have been willing to accept parks spending in a way that was more in line with the breakdown of actual needs, at 80 percent roads and 10 percent each for parks and buildings – a funding breakdown not reflected in the scenarios that city staff had laid out.
This seemed to be the crux of the dispute and, while Dan Wolk obviously saw some urgency in his leaving the council and perhaps in framing his campaign, the rest of the council seemed willing to wait to develop a clearer picture of needs.
Ms. Musser noted, “Even more unnerving was the talk about spending parks tax revenue on parks, which would free up general fund monies to be spent on other things, like road repairs or whatever a future City Council decides. This practice is known as “supplantation,” also better known as “bait and switch.””
As Ms. Musser I think rightly points out, any idea of using the parcel tax to lay out expenditures, with the idea of then freeing up existing general fund spending for other purposes, would have been problematic at best and instilled the fears that critics like the Vanguard and others have that this is all a ploy to free up money for employee salaries.
Ms. Musser might disagree, but it seems like this was done with regard to the MOU where sales tax money that was sold to the public to close deficits and fill critical infrastructure short-falls appeared to be used in part to fund a small but meaningful raise for employees.
While I disagree with Ms. Musser on the soda tax, I do believe that the evolving concept of the tax, coupled with unfortunate suggestions that it could fund infrastructure, is problematic. Mayor Pro Tem Robb Davis apologized on Tuesday for bringing infrastructure into the conversation. Moreover, it is clear that the actual proponents of the tax in the public health community saw this not as a way to fund infrastructure, but rather as a means to fund critical health programs.
As Ms. Eastin pointed out last Monday: “There is a lot of misrepresentation going on by the soda industry. They would have you believe, oh, we will raise taxes on sugary drinks to fix the roads – that is not true.”
On Tuesday it was Mayor Pro Tem Robb Davis who admirably took the blame for this snafu, but really this was a process-oriented mistake and the blame here falls on the city manager who threw the soda tax on the discussion with revenue measures, rather than putting it as a separate item that needed consideration. This automatically and, in retrospect, intentionally, pitted the soda tax against other revenue measures, rather than recognizing that its purpose and mechanism were in fact quite different.
This was enough to lead Ms. Musser to write, “The conversation on the soda tax was in much the same vein, where its original purpose was to address infrastructure which morphed to school health seminars. This budgetary and taxation sleight of hand gives voters the reason to vote no at the ballot box to any new tax.”
While I disagree here, I think she is right to argue that the poor handling of this item might give people the impression that this was simply another “budgetary and taxation sleight of hand” that gives the voters the “reason to vote no at the ballot box to any new tax.”
That is her chief concern here and I think appropriately so. Suddenly the city manager is throwing out a marijuana tax which is not even conceivable absent voter direction on recreational use of marijuana – something that is at least seven months away. Why discuss this now, as we are jammed on time?
While I believe this is probably more incompetence than malice, the case can be made that Dirk Brazil was attempting to get Dan Wolk off the hook by making it easy to kill the soda tax.
Ms. Musser concludes, “The City Council’s confusing discussion reinforces my belief the necessity to follow the Finance & Budget Commission’s suggestions. Hammer out guiding principles, setting out specific metrics for any new tax measure, including articulable needs (not “nice to haves”), prioritization of those needs, and exactly how any proposed tax will pay for the costs.”
I certainly support this evidence-based approach to financing. At the same time, for the most part we have our evidence. We have a 2013 consultant report on roads, which was updated this fall to take into account the collapsing oil market and thus the decrease in the inflation projects for asphalt, but this is largely a known entity.
At some point the council needs to take the plunge and ask for tax increases. I think sooner would have been better, and the fact that we are still waiting is a reflection not only of conflicting council goals, but also poor city management.
—David M. Greenwald reporting
“Hearts starve as well as bodies; give us bread, but give us roses!”
Brett separated “need to haves” and “nice to haves” and the community has been divided on this since he framed it that way around two years ago, however the truth is we need both but the council came up empty handed without a proposal for either or both. Very disappointing.
Bread and Roses is a strange reference. You’re linking a parks tax to a labor strikes at the turn of the last century up in the Boston area.
I simply like the imagery. Notice I used the line but not the reference. My analogy is the parks as our hearts and our roads as our bodies. We need both for a healthy community. I would like to see them roll it up into one big bond issue while interest rates are low.
I share Misanthrop’s disappointment. Mostly I am disappointed in myself for not being able to help lead a healthy discussion on this. Frankly, putting a tax measure on the ballot is one of the more puzzling issues I have faced as a CC member. We need to put a very specific measure on the ballot but we do not seem to have a shared vision about the way to go. I think there may be 5 different visions about how to do this (I am talking about length, amount, use–all of which combined to create dozens of permutations).
In addition, I strongly support the work of the FBC and their recommendation to move forward with greater (overall) accountability for how funds are spent (even if it is a special tax). Further, as I brought up at the CC meeting, I am not convinced we should put a tax measure on the ballot without simultaneously more strategically confronting ways to contain cost.
The result of all these factors means that we simply could not get to any kind of consensus on this issue. I take responsibility for not being able to lay out clearly my goals and how I view a tax. I also, as David noted, own my responsibility in muddying the conversation by suggesting in an earlier meeting that the SBT could go to infrastructure. I still can’t figure out what I was thinking when those words left my mouth.
We are faced with serious fiscal challenges and need to act on multiple fronts to deal with them. I am happy to start to more aggressively examine cost containment but have no illusions that that alone will deal with the challenges in the short/medium term. We are going to have to work hard to come to consensus on this.
The problem you have leading with cost containment is that we have been doing that since Rochelle first got on the council. Since then raises have been kept low, positions have gone unfilled, unused health benefit cash outs have been reduced and a number of contracts have been imposed. Perhaps we can do more but the problem isn’t that the people on the council now aren’t spendthrifts with the people’s money the problem is that previous councils gave away the store. The issue is as much about credibility as cost containment.
The case I think you should be making is that the current CC gets it and that you will continue being vigilant but as we right the ship we still need to maintain the infrastructure that has fallen into disrepair and the sooner we get on to fixing things the cheaper it will be in the long run.
Meanwhile the annual cost per city employee has gone from $100,000 to $150,000.
So your points that we have been leading with cost containment are generally factually incorrect.
Yes, and this is a really frustrating data point. It tells me that the whole system needs review, probably by outside advisers.
Good point Frankly, we cut 100 employees so did this just free up money to give all the others more compensation?
As I understand it, it is not the other employees are getting more compensation. Instead the cost of providing them the same level of compensation has gone up. So again, as I understand it, and Robb Davis explained pretty well a few weeks ago – we have fewer employees, we are paying more for them, they are working harder, and they are taking home less than they were previously. This seems like a lose-lose proposition.
All that matters is total compensation. Employees, like all animals, tend to give higher attention to what they can see, feel and taste today over the things they take for granted and the things they will not see, feel or taste until the future.
So healthcare benefits and retirement benefits are being taken for granted. And it is these things that are driving up the cost of labor per FTE.
Even their very generous paid time off benefits are taken for granted.
But employees still complain that they have not got a raise.
Employees will always complain that they have not got a raise.
Employees get bored and restless doing the same job for years and start to feel like a victim carrying a big bag of rocks to work every day. A raise would sure make them feel better as they do their time to get that big retirement lottery win.
The problem is that the City cannot afford to give them a raise. And they don’t deserve a raise in consideration of their total compensation (factoring the full value of their benefits) in comparison to what workers in the private sector are paid in total compensation.
We should have a goal of driving down our cost per FTE back to $100,000 per employee… while also providing more and better service.
Faster, better, cheaper… that is the constant goal of private business. Without succeeding at this the business will fail to competition and people will lose their jobs. We need to re-engineer our city government using principles of “lean operations.”
Misanthrop said . . . “raises have been kept low”
In absolute terms your statement is correct. Robb put together a graphic that showed that for the six years from 2009 through 2015 DPOA Sworn Officers received a 6.5% raise in base salary, DPOA Non-Sworn Officers received a 9% raise in base salary, PASEA Employees received a 12% raise in base salary, Management employees received a 9% raise in base salary, DCEA Employees because of the imposed cvontract received a 0% raise in base salary, and Fire employees saw a 3% decrease in base salary.
However, when you put those raises into context by comparing them to DJUSD employees, or even more markedly employees in the private sector, those raises are not low. They are quite high. The 2009 through 2015 period saw very few raises in the United States and/or California. People everywhere were tightening their belts, and those belts continue to be tight.
Misanthrop said . . . “unused health benefit cash outs have been reduced”
You are correct they have been, but at their current $500 level I would suspect (but do not know) that the health benefit cash out provisions are in the top 1% of all California employees. The vast majority of employees in California have no cash outs at all. I know that UCD Medical Center had no cash out provision when I worked there. Bottom-line, City employees rejoined the real world when the $2000 level was reduced to $500. Before that they were in Heaven.
Misanthrop said . . . “Perhaps we can do more but the problem isn’t that the people on the council now aren’t spendthrifts with the people’s money the problem is that previous councils gave away the store”
Your bolded words are absolutely correct. But the solution isn’t to say “not on my watch” and let the effect of giving away the store continue, the solution is to correct/reduce the going forward rates so that the fiscal hemorrhaging that giving away the store caused does not continue. If you cut your body and your blood begins to pour out of it, you don’t stand there and stare at the gushing blood and do nothing. You get a compress and stanch the blood flow. The Council has prevented additional cutting of the body and prevented new sources of blood flow, but they haven’t fixed the blood flows that started before their watch.
You act as if its easy to put the genie back in the bottle Matt. The City has reduced staff by 100 positions so they have indeed tried to stop the flows. Since you are running for council Matt, why not answer the question yourself about how you would solve the problem? I agree they should reduce the medical cash out more and I expect they will in the next round of negotiations. I’m sure you are aware that they reduced it 75% and felt it would be too much of a hit to some to cut it completely all at once. As for the point about average employee costs going up that is what you expect without new hires.
But the argument of several posters is that the city hasn’t done enough to rein in costs and that therefore we shouldn’t fix the roads or parks. Its an extreme argument considering that they aren’t in denial about the fiscal challenges the city faces. They have done much more than those who came before yet are still being blamed while the community shoots itself in the infrastructural foot.
Matt, this from today’s Enterprise punches a hole in your argument about raises for city employees outpacing the public sector in general:
“Nationally, California ranks among the highest in teacher salaries and the California Department of Education reports that the average teacher and some credentialed staff salary has grown 10.6 percent, from $66,995 in 2008 to $74,090 in 2014.”
By this standard raises in Davis are comparable to teachers statewide on a percentage basis. Also using CDE statewide figures is a better measure for comparison because of the larger sample and region than comparing the city to DJUSD.
Misanthrop said . . . “Since you are running for council Matt, why not answer the question yourself about how you would solve the problem?”
Misanthrop, the FBC has been very actively working on this very subject in virtually every FBC meeting I can remember. Robb is the Council liaison to the FBC, and he actively participates in every meeting. The eight step Cost Containment plan that Robb presented in the last Council meeting were developed by him in conjunction with Jeff Miller, the FBC Chair.
The one place where I believe both Jeff and I and many of our colleagues on the FBC would go a step further than Robb did is in his first step
1. Undertake a full staffing analysis to determine match between service delivery needs and staffing.
Our FBC discussions have not only embraced a staffing analysis (building on John Meyer’s study last year), but we have also discussed the belief that a thorough Business Process Re-engineering engagement is necessary as well. Staffing poorly designed, inefficient, ineffective service delivery processes makes no sense. Einstein said it perfectly, “Insanity: doing the same thing over and over again and expecting different results.”
The FBC is not just talking the talk. We have taken steps to walk the walk. At the FBC’s direction, with excellent guidance from Robb, Assistant City Manager Kelly Stachowicz has been working with an expert consultant to present a formal plan for bringing Business Process Re-engineering to Davis. A brief agenda item update was on Monday’s February FBC agenda and a thorough agenda item will be on the March FBC agenda, with the expected outcome being a strong “next steps” recommendation to Council.
Misanthrop said . . . “Nationally, California ranks among the highest in teacher salaries and the California Department of Education reports that the average teacher and some credentialed staff salary has grown 10.6 percent, from $66,995 in 2008 to $74,090 in 2014.”
Back on December 12th I shared the Total Compensation data submitted by DJUSD to the State of California, which showed that the DJUSD expenditures in 2008 were $59,338,473 and in 2014 were $61,225,993. Those numbers tell me that DJUSD outperformed the rest of the school districts in the state by achieving a 3.2% increase at the same time as the statewide average was the 10.6% you have cited.
DJUSD’s performance is even more noteworthy and commendable because it came at a time when the total number of DJUSD FTEs has not been reduced.
I don’t believe any new tax measures should be considered until the Council moves to seriously contain costs. Not simultaneously, in advance. Cost containment first, tax increases later. It is a simple matter of trust. We have seen the same story repeated time and again. We raise taxes for the purpose of paying for some insufficiently funded service, only to see the CC use the money to pay increases in compensation instead. We just saw the latest chapter of the story with the recent round of MOU’s. It is time to get off that merry-go-round and address the real issues of fiscal stability and sustainability. Cost containment is the first step, increasing economic vitality is the second. Once those steps are implemented we can then talk about the tax increases that will be necessary to keep things together in the meantime.
There has been cost containment. Perhaps not as much as some would like but the question becomes how much is enough? Beyond that the problem becomes how much are we willing to let the infrastructure degrade before fixing it. Recognizing that the longer we defer fixing it the more expensive the fix will be. The conservatives in Davis seem to be willing to cut off their nose to spite their face.
I know it has been at least five years, and probably closer to ten since Rich Rifkin started talking about capping total compensation. Just think how much better our fiscal picture would look today if the CC had listened. Capping Total Compensation is where we need to be so that is the answer to your question of ‘how much is enough.’ If we cannot get there by negotiating with the employees, then we need to do it by outsourcing the jobs.
That is a great question that should be asked of the current CC (especially the incumbents running for re-election). They were the ones who decided to take the sales tax money that should have been spent on infrastructure and gave it to the employees instead. Davis citizens have approved more than enough new taxes over the past decade to pay for the infrastructure piece. The problem is that the CC has consistently misused the funds.
10 years ago they gave away the store but the current situation is different and I can’t imagine you don’t understand. They recently gave the employees about $1,000,000 but the tax increase and improving economy generated much more. The million wouldn’t have solved the problem but is being seized upon for symbolic reasons. On the other side not giving these small raises reduces our ability to attract and retain good employees. The other variable is the lack of business activity that is starving the city coffers after decades of resistance to growth. A rigid cost containment strategy places all the emphasis on one part of a multivariate, complex equation.
Misanthrop, the cost containment that has been practiced by the council over the past few years has not been containment (surrounding the costs and preventing their increase), but rather cost shepherding (attempting to slow the growth rate of costs). Since 2010 the City’s Total Compensation costs reported in the annual Budget documents have gone from
$48,437,719 in 2010 to
$50,215,214 in 2011 to
$51,004,922 in 2012 to
$51,433,778 in 2013 to
$52,690,576 in 2014 to
$53,249,205 in 2015
That is not containment . . . especially when you consider that the City had 416 FTEs in 2010 and has 352 employees now.
Misantrop
A poster after my own heart on this issue. On many threads, I have attempted to make the point that one man’s bread is another man’s rose. I greatly admire Brett Lee’s analytical and evidence approach and his adherence to his principles as well as to the common good. However, I do not think that this particular framing, implying that we all share the same definitions of “need to haves” vs “nice to haves” has served us well since it is quite clear that we do not all share the same priorities.
City employees with hyper generous pay and benefits is the “rose” that many are choosing over other city amenities and services.
The key point to the article is correct, incompetent City management, past and present. The City didn’t just wake up one morning and find itself in a dire financial condition, and the situation won’t improve until the City hires competent personnel, starting at the top.
I was unable to watch the CC and so may be out of line with this comment but what was the CM role in the discussion? Could or should he have helped the CC move toward consensus? I remember that was one of John Meyer’s skills, stepping in to reframe or offer input to help focus the discussion towards an outcome.
I don’t recall the CM saying a word.