Budget/Fiscal

I got admonished last week for claiming to know for sure that the Interim City Manager Paul Navazio – if he is in fact a candidate, which I suspect he is – will not be the new city manager.  So I will state for the record this time, I have no inside information here.  This is simply me speculating and reading the tea leaves.

The Davis Enterprise ran a story where they interviewed Mayor Joe Krovoza on the plan to cut 2.5 million dollars from personnel costs.  While there is not much there that we do not already know, it does elicit a few comments and clarifications that can be useful to this debate.

The Enterprise reports, “Some in the community praised the move, calling it a bold step in the right direction to set the city on a path to fiscal stability. The savings would be used to fund unmet needs.”

Last week the council approved the new budget implementing both the Tier 1 and Tier 2 reductions.  We have argued against that approach, arguing that this is essentially nickel and diming the budget, when what we need to do is make long term structural changes.

One of the cuts to the city budget in Tier 2 is the reduction of the street tree maintenance contract, which among other things would eliminate the portion of the contract for trees at residential addresses.

I always find it interesting to read Rich Rifkin’s column. I often find them interesting and good in pointing out tidbits that I had not considered, even as I, as often as not, disagree with his analysis and/or conclusion.

I was very interested to read his thoughts on the budget, because despite the fact that we are in general agreement on the problems facing the city, we disagree on whether the budget as enacted last week is a good thing or bad thing.

The City Council has attempted to mitigate some of the hardship on low income residents through a subsidy plan, which will give low-income residents a measure of relief.

In order to understand why the seemingly sudden $2.5 million in personnel cuts is necessary, we need to look at a number of factors that led to this policy.

That move triggered the key showdown between council and 150 at times angry public employees.  Just to add to the drama, it was a hot night with the AC having no impact.  The room was easily over 90 degrees, stuffy, and sweltering.  Under that pressure, would the new council blink or would they stand strong?

In 2008 the Davis Enterprise endorsed for City Council Stephen Souza, Don Saylor and Sydney Vergis, arguing, “Davis will need council members who drive hard bargains with the city’s labor unions, make fiscally sound decisions to live within our means…”

In doing so they critically ignored the series of decisions made, in fact, by that very council that put us on a path toward fiscal crisis, including raising salaries to unprecedented levels and continuing the path of increasing retirement health and pensions beyond the levels funded.

Matt Muller, who is the President of the PASEA in Davis, sent me, personally, to the Vanguard email address, a strongly-worded criticism of my views and writing as it relates to the city budget issue. PASEA represents the Program, Administrative and Support Employees Association in Davis.

While it is likely true that Mr. Muller is speaking for himself here and is not authorized to speak on behalf of his employees’ association, his statement sent to a media entity certainly reflects on both the entire membership of PASEA and the City of Davis.

The overall tone of Tuesday’s meeting was notably different.  Unlike the previous week, there were no signs, the city employees sat quietly and respectfully and watched the proceedings.  Did they take heed of some of the criticism from the previous week, or were they simply resolved to their fate?

While ringleader Bobby Weist of the Davis Firefighters sat on the sideline at this meeting, several other heads of unions and bargaining groups stepped up.

Council was going through what seemed to be the routine business of passing Tier 1 and Tier 2 cuts when suddenly it became interesting on Tuesday night.  When the dust settled, the council went from a 5-0 vote to move forward with a proposal to direct the City Manager to restore $850,000 to road maintenance, find $500,000 to buffer an expected PERS lowering of annual rates of return and find $2.5 million in personnel cuts, to a narrow 3-2 victory with newcomer Dan Wolk becoming the decisive swing vote.

The first hints of trouble came as Dan Wolk successfully restored youth recreational funding.  Suddenly Stephen Souza was arguing that the city council was going about this budget in the wrong way.

The budget vote is set for tomorrow night and this figures to be an historic occasion in Davis.  There are still a few issues that need to be played out.

Quite clearly, the council would be more comfortable with a budget that spelled out more clearly what the cuts would look like.  However, it appears they prefer to put placeholder cuts on the budget now, rather than balancing the current budget with Tier 1 and Tier 2 and then setting a process to consider options by September 30 – a tactic that Councilmember Stephen Souza would prefer.

I listened very carefully to the comments on Tuesday night made by city employees.  And I understand that a proposed pay cut is going to produce anxiety and anguish.  It is the nature of the game.  Nevertheless, I saw a real disconnect between what was spoken and what I observed for about four or five hours.

I heard several things from the employees.  They felt disrespected by the process and some called it shameful.  Second, that they love the city and provide it with a great service.

Despite the heat of the room, the anger of some of the employees, and the length of the meeting, the most remarkable thing about Tuesday’s meeting is that the proposed budget hardly changed.  Given what we have seen in past years, that fact alone is remarkable.

Earlier this week, we criticized Interim City Manager Paul Navazio for tardiness in getting the budget proposal to the council and the public.  So it is noteworthy that midday on Saturday, he took the time to email the media the final budget proposal.

Last week, the Council made it very clear what direction they wanted to go.  Mayor Joe Krovoza made the motion, seconded by Mayor Pro Tem Rochelle Swanson, to do four specific things, three of which were to be done in this budget.

Included in that was the restoration of transportation funding to the one million dollar level, the allocation of an additional half million in anticipation of potential CalPERS rate increases to be effective fiscal year 2012/13, and the assumption of Tier 1 and 2 cuts with the exception of the restoration of funding for the ombudsman, recreational programming and public safety reductions.

On Tuesday night, the City Council Chambers were packed in part by city employees, protesting the proposed city budget that sought to deal for the first time with the very real fiscal reality that the City of Davis faces.

City employees have some very real concerns. Unfortunately in part they have been misled by people like Bobby Weist, the President of the Davis Firefighters Union, who organized this protest but is also largely responsible for many of the conditions, at least on the compensation side, that along with the prolonged economic downturn has led to the need for reform.

It turns out that the hard work is just beginning for the council, as they attempt to steer the city back onto the course of fiscal discipline.  Last week, led by Mayor Joe Krovoza, the council initiated a bold plan to restore fiscal sustainability.

This week, with sweltering heat, ineffective air conditioning and a packed house, the council faced the music.  The anger was apparent in signs from the employees that included “Welcome to Wisconsin” and “I’m More Than an FTE.”

The Davis Enterprise is reporting today that according to a state official, the City of Davis “could push back deadlines to clean up its water by as much as a decade and hold off tripling residents’ water bills,” something that the Vanguard has been suggesting for quite some time.

The Enterprise, citing Ken Landau from the State Water Regional Control Board, reports that a new law would allow the city to “apply for further extension on requirements to clean up the water they discharge into the environment.”

This week we saw something very unusual – in fact I did not realize at the time just how unusual it was – we saw a Democratic Governor veto a budget that failed to, in a real way, balance the budget.

According to Governor Brown, it was the first time in history that the state budget has been vetoed.

On June 1, more than 150 residents attended what was a dubbed a “Save Our Store” rally.

They came to lend moral support, give valuable community feedback and send a strong message that the West Davis community was not going to let their store go without at least a valiant fight.