Budget/Fiscal

Last week the Vanguard reported that the Davis City Council had quietly slipped approval of a nearly eleven million dollar water tank project past the residents of the city of Davis.

On July 15, 2008, on the consent calendar, the Davis City Council adopted a resolution authorizing the City Manager to executive a consultant agreement with West Yost Associates for East Davis Water Tank.  The fiscal impact for those consultant fees was expected not to exceed 600,000 dollars.

This week begins the long process of looking at the city budget where the City Council along with City Staff must deal with the short-term budget deficit and hopefully deal with the longer term structural issues dealing with employee compensation.

This article will simply look at the overview presented this week and wonder whether the numbers presented here are simply too optimistic.  Part of these figures are based on projected outcomes from negotiations with the bargaining units.  That process is ongoing and does not figure to be resolved prior to the budget’s passage on June 23, 2009.

Last night at the Davis City Council meeting, the city unveiled the budget.  Because the budget itself did not get to council until late in the afternoon, the city generally spoke in generalities rather than specifics.  In the coming days and weeks, we will look at the budget itself more closely.  For now, we want to focus on one particular issue that arose during the course of council discussion.

Finance Director Paul Navazio suggested that part of the more than three million dollar budget deficit will be closed through contract negotiations.  Mr. Navazio is proposing somewhere around 860,000 dollars or so of the budget will be closed through contract negotiations.  The question then comes to where should that come from and how should the city proceed with negotiations.

The Davis City Council recently approved a ten million dollar water project that was on the consent agenda with no discussion of the costs of the project, its design, size, impact or alternatives.  When Councilmember Sue Greenwald pulled the item from the consent agenda, the discussion was delayed until the end of the meeting, by that point the council was so tired they refused to discuss it and simply approved it.

The genesis of this approval began on July 15, 2008 with another consent item.  The council at that time approved a consultant agreement with West Yost Associates to prepare plans, specifications and estimates for the subject project.  The consultant agreement was not to exceed $600,724.

For the first time, the Davis City Council really acknowledges some of the problems that it faces in long-term, not just short-term fiscal stability and addresses key issues that are facing it as it attempts to go into good-faith labor negotiations.  The first step is always to define the problem.  However, the key will be to not just acknowledge the problem, but to actually hold employee groups and city staff posing as negotiators to the fire with regards to compensation packages.

On Wednesday evening at the Veteran’s Memorial Center, the Davis Neighborhood Coalitions and the People’s Vanguard of Davis hosted a townhall meeting on the budget.  The panel consisted of City Finance Director Paul Navazio, Budget and Finance Commission Chair Johannes Troost, and past chair of that commission and Sac State Professor Mark Siegler.

In addition to asking the panel eight preset questions, and taking questions from the audience, we also asked the audience a key question and had them submit the answers to be posted on the Vanguard today.

Join the Davis Vanguard and Davis Neighborhood Coalition for a Town Hall meeting on Davis’s impending budget crisis.

The meeting will take place Wednesday, May 20, from 7 to 9 p.m. in the Veteran’s Memorial Center Multipurpose Room, 203 E. 14th Street in Davis.

The meeting features a panel of speakers consisting of City of Davis Finance Director, Paul Navazio; City of Davis Budget and Financing Commission chair, Johannes Troost; and CSUS Professor of Economics and Department Chair, Mark Seigler.

Yesterday the Vanguard reported that the city has contracted with Citygate to examine the operations and staffing of the Davis Fire Department.  The same Public Records Act Request also shows an interesting relationship between various players in City Hall and the Fourth Estate.

The Davis Enterprise following their article that chronicled the number of 100K employees in the city and their editorial call for changes in staffing, ran two articles dealing with employee salaries and fire staffing.  First on April 5, Claire St. John ran an article on the latest negotiations.  Then second on April 8, Lauren Keene ran an article that showed the fire chief arguing for the current staffing arrangement.  That was followed by former Councilmember Ted Puntillo’s Op-Ed which argued much the same.

The Vanguard has learned through a Public Records Act request that the city of Davis has commissioned a full review of the Davis Fire Department through a consulting group Citygate Associates.

While not a complete secret, the city seems to have intentionally kept this investigation and review under wraps.  The size of the contract is 15,000 dollars, which is less than the the minimum amount of a contract that would require council approval.  However, despite this, the city has apparently kept the city council informed and appraised of their activities throughout.  Each of the members of the city council has already according to the records, met with representatives from Citygate to discuss their views of fire operations.

On Tuesday, the Davis City Council will look into the issue of the Fifth Street Corridor and consider whether it should change the structure of the road.  I strongly recommend for those who have not seen it, to view Dan Burden’s PowerPoint that he presented the city back in March.

One of the key findings from other communities is that road diets do not mean that fewer vehicles can utilize the road.  In fact, his research and examples from other communities show that they can sometimes counter-intuitively better utilize the road with fewer lanes because the flow is smoother.

So it was little surprise to see that former Davis City Councilmember Ted Puntillo, a strong supporter of the fire department would respond.  Last week, Mr. Puntillo authored an Op-Ed in the Davis Enterprise entitled, “Fire Engine Staffing Saves Lives.”

We have consistently talked about opening up the current ongoing negotiations with the city’s bargaining units to greater transparency.  However, the state law makes that prospect difficult.

California laws makes it a virtual requirement to conduct bargaining in closed session, away from public scrutiny.  The problem as we have seen is that once the contract is negotiated in private, it ends up as a consent agenda item for ratification.

Ever since the Davis Enterprise ran the story on employee salaries that reported that there were 72 employees receiving over $100,000 in salary and overtime in 2008 and that 38 of those were firefighters, it has been very interesting to read the letters to the editor in the Davis Enterprise.

The latest such letter was yesterday from Dennis Westcot.

Good evening council, I’m David Greenwald, and I’m speaking before you to express my concern about the way that the city’s budget discussion preceded last week. My biggest concern stems from the basic fact that the city council, the city manager, and the city’s finance director spent an inordinate amount of time discussing things that frankly the finance director could have put into a report on cuts that need to be made and then council could have moved on to more substantive issues to discuss.

As Councilmember Sue Greenwald said on multiple occasions last week, the council’s discussion completely ignored the largest sources of expenditures and the areas that we must address, not only to close the multi-year, multi-million dollar deficit, but to address the structural issues that underlie our current predicament.

In a recent Davis Enterprise article, Davis Fire Chief Rose Conroy defended the four person fire crew.  The article cites the 1998 OSHA “two in, two out” rule as a safety regulation for firefighters.

One question that comes to mind is what does this rule mean exactly?  Are we required by this rule to carry four person engine units, or are there alternatives available for smaller departments like Davis to be safe but to be fiscally responsible at the same time?

On Tuesday night, the Davis City Council began looking into budget cuts.  The city is of course facing a $3 million deficit in the coming fiscal year.  The immediate crisis has been caused by declining tax receipts.  But the longer term crisis is fueled by increasing salaries, rising pension costs, and the unfunded liabilities down the line that the city faces with retirement health care.

The most disappointing aspect of it is, is that instead of going head on against the bulk of city expenses, the large monies and obligations the city faces, two of the councilmembers–the Mayor and the Mayor Pro Tem largely focused on minutiae.

Anyone who watched even a portion of the Davis City Council meeting last night saw some amazing maneuvers by some on the council along with the city manager to avoid the real tough issues and attempt to balance the budget by nickle and diming the city to death.  In order to do justice to this, we are going to break this into multiple parts.

This first part will focus on a memorandum by City Manager Bill Emlen that pretty much proves he is missing the point.  There is some serious denial going on in this city and it begins with the city manager.  He writes:

Somewhat buried in the staff report on the current budget crisis is a rather bleak forecast that looks at the hit the city is likely to take with regards to its PERS contributions for the years 2010/11 and 2011/12.  According to the staff report,

“The retirement plans provided through CalPERS are considered “defined benefit” plans such that, upon agreement on a specific benefit level, the employer and employees contribute annually funding amounts to CalPERS according to the contribution rates established by CalPERS through annual actuarial valuations which set the contribution rates for the succeeding fiscal year. CalPERS typically provides contracting agencies with their contribution rates in October for the following (July-June) fiscal year. As such, CalPERS contribution rates reflect roughly a two-year lag relative to “current” actuarial results.”