Budget/Fiscal

By Rob White

In just the last two weeks, I have had several interactions that are good examples of how broad-reaching networks can increase opportunity for additional resources. Each of these initial discussions has resulted in subsequent follow-up discussions about potential new investment and funding resources in and around Davis.

Chinese Trade and Development

The first discussion to highlight was with former City of Sacramento Council member Rob Fong, who is now the director of a newly formed nonprofit centered on increased trade relationships between the Sacramento area and Chongqing, China. The nonprofit is formally known as the California-Chongqing Trade and Commerce Organization and is focused on creating robust trade and technology development investments between the two regions.  If this sounds familiar, it is likely because his efforts were covered in the Sacramento Business Journal last week.

How much money will the holdouts of DCEA and the Davis firefighters end up costing this community?  We are now a year past the expiration of the last contracts.  All other bargaining units had reached agreement by December of 2012.

By the time the contracts are settled and impasse is imposed, it may be the end of 2013, or 18 months after the expiration of the contracts.  We could be looking at several millions of dollars in costs.  The firefighters in particular fought staffing cuts, arguing that it was not about their personal interests, but rather their commitment to the community.  Where is their commitment to the community when it comes to compensation and taking the same concessions as every other employee in the city will take?

Last week, the firefighters’ union president sent out an email outlining the union’s position of no confidence in Police Chief Landy Black and Assistant Chief Steve Pierce, who were assigned to head the fire department’s administrative operations.

“The firefighters in the City of Davis have no confidence in the ability of Chiefs Black and/or Pierce to carry out the Fire Department’s primary duties to the community,” stated Mr. Weist’s email to the firefighters’ union, under the heading of “vote of no confidence,” which was subsequently forwarded to Landy Black and Steve Pierce.

Firefighters Desperate Moves Backfire, Series of Failures Pile Up- As I exited the Council Chambers in the early morning hours of January 14, 2009, having watched the firefighters union who showed up, nearly all of them united and successful in getting the council and city staff to whitewash the fire report, it was difficult to imagine that this would be the pinnacle of their power.

Sure it was a 3-2 vote, but it was a strong and solid 3-2 vote as it would be at the end of that year when the council by the same vote approved the 2009 MOUs.  Union President Bobby Weist in 2009 was arguably the most power political figure in the city of Davis – inspiring fear and respect.

Late on Tuesday night, Firefighters Union President issued an email to his membership indicated a vote of no confidence, “The firefighters in the City of Davis have no confidence in the ability of Chiefs Black and/or Pierce to carry out the Fire Department’s primary duties to the community.”

“California State Law is very clear about the required qualifications of a City Fire Chief.  Government Code section 38611 requires that a “fire department shall be under the charge of a chief who shall have had previous training and experience as a fireman,” the vote of No Confidence stated. “While Chiefs Black and Pierce are both good people – and probably excellent police administrators – neither have had any previous training or experience as firefighters.”

Former Interim Chief Tasked with Overseeing Merger and Developing New Fire Station – The city is bringing back former Interim Fire Chief Scott Kenley “to work on a special Fire project,” according to a Memorandum from City Manager Steve Pinkerton to the City Council dated July 12, 2013.

Mr. Kenley, who served as interim fire chief until his time ran out and drafted the fire report that recommended sweeping changes such as boundary drop and the fire staffing change, will report directly to City Manager Steve Pinkerton, working out of an office located at the Police Department.

City officials said at the recent budget item during the Davis City Council meeting that they expect the contract situation for the two holdout bargaining units – the firefighters and DCEA – will resolve themselves within four months.  As the time ticks down on the city imposing the last, best and final offer, rumors are starting to fly.

On Friday, the Vanguard received an anonymous email: “Members of DCEA are claiming that they have been told by the city that the city is hiring lawyers to help them get out of the ‘Me Too’ clause in several of the other bargaining groups’ contracts. They are saying that that the City has informed them there is a loophole in the clause that the groups are not aware of and that DCEA is going to get a much better deal than the other groups who cooperated.”

by Rob White

I was privileged to be part of several exciting activities this week, which put the City of Davis (and UC Davis by proxy) right in the middle of discussions on advanced manufacturing and sustainability.

The first activity was a two-day series of Congressional and federal agency briefings on the state-wide collaborative partnership known as the California Network for Manufacturing Innovation (CNMI). It is a nascent organization made up of California-based organizations including the federal labs, MEPs (a federally funded manufacturing assistance program), universities and community colleges, municipalities and economic development organizations (including the Governor’s Office of Business and Economic Development [GO-Biz]).

When the Davis City Council unanimously passed the budget on Tuesday night, they included for the first time funding that would allow the city to actualize the move of the fire station from Fifth Street to a still unknown location in North Davis.  In the process, they provide clarification to the issue of STEAC’s location at the corner of 5^th and D as well as concerns about the impact of the Fifth Street Redesign on the ability of fire engines to gain access to the road.

The council on Tuesday voted to add $2.3 million to the Fire Station Relocation Project, which will be funded by public safety impact fees.

At Tuesday’s Davis City Council meeting, City Manager Steve Pinkerton said, “I don’t think we have as much a spending problem here as we do a revenue challenge in the future.”

He has a point.  The projected revenue growth is still sluggish into the future.  From 2013 to the 2017-18 budget, a four year budget period, the city manager is only projecting just over 8% in revenue growth.  That’s about 2 percent per year.

You would think at some point things would turn the corner for the city of Davis in terms of its budget picture, but the cold reality once again rained home on the council.  Much of this is occurring after the city has made a series of tough choices – reining in spending, overhauling pensions and retiree health, cutting staffing, and restructuring existing staffing to give the city more bang for its buck and flexibility.

At the same time – like the water project or hate it – there is no doubt that the impact of the decision to go forward with the surface water project is, at least in the short term, going to make things more difficult.  First, there are serious general fund costs to budget and, second, the accompanying rate hikes will make it more difficult for the city to gain additional revenue.

By Rob White

I haven’t been in Davis long.  But one of my primary tasks has been to identify and meet as much of the entrepreneurial and tech community as possible in a very short amount of time.

This has included meetings with principles from well-known Davis companies like FMC Schilling Robotics, DTL/Mori Seiki, Bayer/Agraquest, Cedaron Medical, Gold Standard Diagnostics, Calgene, SiGNa Chemistry, Engage3 and others. I have heard stories of how the companies started, what their growth has been like, and what has kept them in Davis to date (or in some cases, moving back). I have discussed some of their challenges and took a keen interest in their industry and how that might relate to future companies that could be in Davis.

After years of decline or stagnation, the good news is that revenues are rising in the city of Davis.  However, the problem that the city faces is that expenses continue to rise faster than revenues.  This is in part due to the fact that, while the city has resolved the contracts for two-thirds of its employees, it still needs to approve new contracts for two bargaining units.

But there are other pressing issues, as well.  The city has chosen to undertake not one but two major capital projects simultaneously.  Writes the city manager in his message to council: “In the upcoming year, through the joint-powers agency, a new surface water treatment facility will take steps toward construction and the City will be working on a design-build wastewater facility. Most cities have one utility capital improvement project every twenty years: Davis has two underway simultaneously; the surface water and wastewater-treatment projects.”

On the one hand, what do you expect Bobby Weist, President of the Davis Professional Firefighters Union, to say – after all, he is negotiating with the city’s negotiator for a new contract and locked in a standoff that appears likely to result in the imposition of the last, best, and final offer by the city.  But on the other hand, his quote, featured in the article by Tom Sakash of the Davis Enterprise, is telling for its sheer audacity.

Mr. Weist told the paper that “he hopes it will not come to imposition.”

This week Bob Dunning posted excerpts from a Village Homes plan to go to well water rather than pay for the increased cost of water under the new project.

Drilling through the morass of tongue-in-cheek comments, it appears the  crux of the situation is, “The Village Homeowners Association Board has been contemplating construction of a well on Village Homes property for over two years to help defray the rapidly increasing cost of water.”

The City of Davis declared impasse with DCEA (Davis City Employees Association) back on November 8, 2012.  More recently, on April 12, 2013, the city declared impasse with the Davis firefighters’ union, Local 3494.

According to a press release from May 31, “The City’s agreement with DCEA expired on June 30, 2009, and the agreement with Local 3494 expired on June 30, 2012. The City commenced negotiations with both groups in the spring of 2012 regarding the terms and conditions of employment for these represented units, and the parties have spent the last year negotiating for successor agreements.”

From 2006 until only the last few years, one of our favorite expressions was that the council majority was lining up in punt formation to push off another hard decision for a future council.

The current council has actually had a rather remarkable run of putting to bed some of the tough and vexing issues: fire staffing cuts – done.  Structural reform and budget cuts – done.  Road pavement funding – moving forward.  Fifth Street redesign – moving forward.  Surface Water Project – about to be built.  Wastewater treatment plant – about to go to bid.

While I don’t want to diminish the work of the present council, who has in the past month fixed two rather vexing problems – fire staffing and road pavement – the vote on road pavement left me a little down.  Why, you might rightly ask.

Road maintenance has been a long and vexing problem.  When I pointed out that the alarm has been sounded since 2009, I was rightly corrected that it goes back much further than that.  Some see this as the legacy of the recession, but I continue to see it as a choice that we made probably going back to 1999 – when we started ramping up salaries and compensation for employees, while spending virtually no money on roads or other infrastructure.

While the voters approved Measure I in March, there is pending litigation that may be impacting the ability of the city to finance the project.  According to comments from City Manager Steve Pinkerton at this past Tuesday’s city council meeting, the city will need to produce 30 to 40 million dollars by this fall to finance some of the costs the city has incurred to date on the surface water project.

The Clean Water Agency will select its DBO contractor and execute a contract by September.  Staff reports, “The City will need to be prepared to fund its share of the DBO’s design costs and any initial project mobilization costs by September.”