COMMENTARY: Heystek’s Budget Changes the Game, But Will Council Listen?

lamar_heystekThe problem is a small city, city manager government is that staff runs City Hall.  Councilmembers are dependent on staff reports to be able to govern.  Staff is not assigned individually to elected city councilmembers, instead they collectively serve the council and by extension and default, the council majority.

That gives a tremendous advantage to council majorities who can gain from city staff the formulation and justification of their policies.  That makes what happened on Tuesday night all the more remarkable.  Councilmember Lamar Heystek took the highly unusual stance of sitting down at the staff table and presenting his own alternative budget.

The move caught Mayor Pro Tem Don Saylor off-guard, as he made the sarcastic quip about Mr. Heystek being a “junior” staff member and City Manager Bill Emlen piled on suggesting that Mr. Heystek was an intern.  These were transparent comments about Mr. Heystek’s age and there is no way they would have made the same comment if Councilmember Souza or Mayor Asmundson had done the same.
What neither Mr. Emlen nor Mr. Saylor appear to understand is that Mr. Heystek has changed the game.  He has given us a way forward by which we can actually begin to address the problems that face this city that the current budget does not address.

The current budget proposal from Finance Director Paul Navazio simply and flatly fails to address the longer term structural issue.  It relies heavily on $1.5 million in tiered reductions.  What are tiered reductions?  They are taking away services from the public.  They result in lesser hours for public service from the various departments.  They result in cutting the budget for the City’s Ombudsman–an agent that works with the public and as the Enterprise article indicated, successfully, to improve relations with the police department.  They result in cutting the budget for Davis Media Access, a service that helps educate the community, that many rely on to help televise and broadcast public events.  This is what the city’s budget aims to do.

If one examines the budget proposal from Mr. Navazio, one notices that the budget projections remain in the red for the out-years.  In fact, the more realistic models shows an increase in deficits over time as increase costs outstrip slower growth. 

What that means is that these cuts to city services, these cuts to various departments will be permanent.  They are not coming back in the foreseeable future.  We will have to learn to live without them.

This would be acceptable if the city was addressing the structural problem but it does not.  The city’s budget presented by Mr. Navazio allows for only $850,000 in cuts to employee compensation.  That includes efforts to address pensions, unfunded liabilities in retirement health, and salaries.  In addition, the city paid out $3.4 million in overtime the last two years, this proposal cuts a mere $150,000 from that total.

Even Mayor Pro Tem Saylor acknowledged that some of the giveaways given in better times are not sustainable.  But Mr. Saylor offers no solution for this problem.  He merely meekly applauds the finance director for taking a “balanced” approach.

But it is not a balanced approach.  It places a huge burden on those who pay the bills in reduced services and does very little in terms of spreading the pain.

What makes matters worse is that this budget is probably actually a best case scenario.  Given the crisis at the state level, talks about pulling Prop 1A funding to the cities and counties, and the likely impact of a deeper recession on revenues, Mr. Navazio’s revenue forecast that shows modest growth each year seems very optimistic.

However, when Councilmember Heystek revised the projected revenues downward, Mr. Saylor suggested he would stick with real numbers, as though Mr. Navazio was doing anything other than simply making an assumption–the exact same thing that Councilmember Heystek was doing.  The difference is, ironically enough, is that Mr. Heystek’s assumptions were far more realistic than the person that Mr. Saylor prefers to listen to here.

The chief difference between the budget presented by Mr. Navazio and that presented by Councilmember Heystek is that the Councilmember’s alternative begins to look at the structural issues.  Instead of taking a mere 2.69% total compensation reduction, Mr. Heystek proposes 5%. 

If you look at many jurisdictions they are asking their employees to take much larger hits than even that.  But at 5%, Davis can continue to provide the public–i.e. the billpayers–with their services.

The suggestion has been made that this demonizes and disrespects city employees.  I would argue it does not.  We simply have to recognize that in the past we have been too generous.  Our employee rolls have increased tremendously since 2000.  We simply need to address these problems lest we fail to do so and we have much more serious issues in the future.

I would also suggest that we should not assume that every employee will receive the same reduction.  We need to look in terms of greater employee participation in both their pension contributions and their retirement health, we can look into vesting periods, we can look into a variety of means by which to restructure our retirement packages.

Moreover, the first people we ought to look at are the managers who making over $100,000.  We need to ask key questions such as those asked two weeks ago as to why a Police Sergeant with supervisory duties is making less than a Firefighter II who does not have supervisory duties.  We must ask why that Sergeant who is most similar to a Fire Captain in terms of responsibilities makes $25,000 less.  And if we are going to fix anything, it needs to be in that manner not anything that resembles an across the board cut where those who make $40,000 or $50,000 per year are asked to take the same hit as the managers making over $150,000 per year in total compensation.

The council’s immediate reaction to the budget crisis was to nickel and dime.  As a result the council no longer eats meals during closed session.  The savings is a whopping $7 per person.  What in the world is that going to do?  Some will say it’s symbolism.  I would respond symbolism only matters if you are asking for shared hardship.  Right now, it appears that there is no shared hardship.  The public and the most vulnerable in City Hall are taking the hits and those at the top as skating by.

But now we have a clear alternative thanks to the hard work and actual leadership by Councilmember Heystek.  Because of his diligence, we are no longer merely naysayers complaining about the state of the city budget.  We now have a plan that we can work with.

We can probably go further.  When the school district went into fiscal crisis they eliminated their No.2 position in the district.  With the county in crisis, many department heads are leaving. 

If the Public Defender’s office can do without a public defender, cannot the city government lose one of it’s $100K managers?

If we are going to nickel and dime on programs and talk about taking away tools for park maintenance people, can we not take a thorough look at our contracts and our purchases from vendors and see where we can cut from that?

Can we not ask people who make $100,000 to $200,000 per year in total compensation if they can take a salary hit so that those who make less don’t have to?

Can we not ask those same people to make sacrifices so that the public can go to the police station on a Saturday and have someone at the desk or turn on Channel 15 and find that there is decent community programming?

Well, if we follow the city’s budget proposal we cannot.  We are going to make all of the sacrifices and those at the top will take a very modest cut of 2.69%.  Meanwhile city services will be cut to the bone if not further.  Meanwhile, we still will not have solved our unfunded liabilities.  We still will not have solved our pension situation.  We still will have not meaningfully addressed the decade of runaway employee compensation explosion and the bottom line is that we will still have to deal with these problems next year and five years from now.  And we will likely have to cut further as revenues continue to decline.

There is leadership in City Hall but it is coming from Councilmember Lamar Heystek and Councilmember Sue Greenwald who was warning us of this impending problem before most of us even knew what these issues were even about.  It is not coming from city staff, and it is not coming from the Council Majority.

Now it is our turn.  We must show up and be counted if we want the council take on these issue rather than simply paper over the mounting crisis.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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20 Comments

  1. Mike Hart

    Give us something concrete we can do to show support for the only members of the city council who appear to actually care about more than posturing! What can we do to show substantive support for Sue and Lamar?

    I don’t dislike the other council members, in fact they are personable and clearly willing to spend time for the community. But their steadfast refusal to confront the city staff and the entrenched budgets is tedious. They need to join Lamar and Sue in dealing with these issues and stop posturing and trying to suck-up to staff.

  2. Greg Kuperberg

    In order to change the game, it is not enough to do a lot of homework and present a detailed analysis. You should also be right.

    Councilmember Heystek began by warning the city that revenue projections are too optimistic and we will have to cut more. He ended by instead promising fewer cuts in services. Logically speaking, this is kicking the ball to both end zones. You should be skeptical of a doctor who says: “I am a better doctor than your regular doctor. Your doctor wants you to lose 10 pounds, but actually you need to lose 30 pounds. Your doctor says that you can only have cake and ice cream one a month, but I will let you eat it once a week. It will be a different brand with fewer calories.”

    The proposed alternative solution is a benefits grab. Maybe it is true that the compensation for firemen is out of balance with police and could be trimmed back. I doubt that they can dictate firemen’s salary just on the basis of budget cuts and social justice, because there is such a thing as market rates. But maybe they can shift from the leading edge to the trailing edge of the market rate without destroying morale.

    I was also thinking that Steve McMahon could be right, that Davis should not be producing local TV shows and it should restrict its cable production to city and school district meetings. I respect the artistic value of local TV shows, but we are facing cuts, and is this an essential city service?

    But if the plan is to grab the management’s pensions just because managers are well paid, no thank you! We need more managers like John Meyer and fewer managers like David Murphy. Every few thousand we save that way could in the end cost us millions.

    In fact, sometimes there is an aspect of self-fulfillment in contradicting managers and degrading their pay. Sometimes the resulting mismanagement is great fodder for protests. When I lived in Berkeley, some people seemed disappointed when there was no crisis to protest.

  3. Observer

    IIncluding pay cuts and furloughs, state workers are down almost 15%, with more on the way. Know a teacher? Ask them what’s happening where they work. State workers are being furloughed two days a month; the city of Davis is thinking about considering the possibility of talking about a furlough once every other month. Lamar seems to be the only one who can do arithmetic and is willing to discuss the elephant in the room. He accomplishes more in his spare time than the “big three” do combined. I wish there were a way to get him employed full time working for the city.

  4. Dont get it

    When the two who should be removed the fastest both show their true colors, its really nice to get it in print: The move caught Mayor Pro Tem Don Saylor off-guard, as he made the sarcastic quip about Mr. Heystek being a “junior” staff member and City Manager Bill Emlen piled on suggesting that Mr. Heystek was an intern. Both these guys are supreme, top grade(shelf) adam-henry’s. I see Saylor downtown often and wonder why he’s always smiling– the joke is on us unfortunately!

  5. Greg Kuperberg

    [i]Including pay cuts and furloughs, state workers are down almost 15%, with more on the way.[/i]

    I am in line for a furlough just like other faculty at UC Davis, so I know what you are talking about. Even so, it makes us Davis residents seem greedy for tax savings if we pretend that Davis is getting the same 15% punch in the face as the state. We’re lucky that the city’s budget is more stable than that, and we should make use of that luck with stable planning.

    Moreover, if the solution is to grab pensions instead of cutting services, it also makes us seem greedy for services. I did not see that Heystek discovered any new negotiating leverage to reduce compensation — without destroying morale — that we didn’t know we had. If the leverage exists, then sure, make use of it. But you don’t create leverage with a spreadsheet.

    [i]Lamar seems to be the only one who can do arithmetic and is willing to discuss the elephant in the room.[/i]

    How did you, or anyone in this discussion, decide that Heystek added the correct numbers? Other than that you like pension cuts better than service cuts?

  6. Told You So!

    Lamar didn’t come up w much new that we didn’t already know – there is a huge need to cut city employee salaries and benefits, bc they represent the majority of the budget. Lamar and Sue are the only ones willing to put it on the table for discussion. The Council majority are not willing to talk about it, neither is Bill Emlen. Why? Where do you think the Council majority is getting their campaign contributions from? Bill Emlen negotiating on behalf of the city for cutting the salaries of his own employees? Talk about a built in conflict of interest! I told you Bill Emlen would not bargain in good faith, and we will end up with the same structural problems we have always had.

  7. aware, not

    “aware” isn’t… assessments go up 2%/year… if house/property was held for 10 years @ 5% increase in market/year (low side, for quite some time), then lost 20% in value last year (Davis was ~ 7%), and sold for that, the math goes like this…
    assessed value went up 21.8% house sold for 30.3% higher than it was acquired… net increase in property tax =~ 8.5%

    Think, people…

  8. fire fighter costs and other high salaris

    Someone with more knowledge may correct me, but I believe Sue Greenwald has been warning for a long time that our fire fighters are making salaries way above what the market requires, as evidenced by the number of people applying for the jobs that open, and that the City would not be able to sustain their increasing salaries, paid overtime (including time stuck sleeping at the station on call), and retirement. (I believe that’s why the fire fighters don’t endorse or volunteer for Sue). We all love fire fighters and understand danger pay but we also have to pay for a range of City services so with my limited info I would want fire fighter pay to be more like police pay, also a risky job. An announcement right now at http://www.dailydispatch.com/Assets/dept_0/PM/pdf/5 28 2009 Fire Specialist I June 09.pdf shows the entry level salary, so folks can judge for themselves. This sometimes dangerous job requiring EMT training and physical fitness but no college degree pays $5,340.00 – $6,379.00 a month not counting overtime, at the entry level. That matches my state salary range (before subtracting the 10-15% furloughs and pay cut), for scientists and social scientists and such, 3 promotions and many years above entry level (and reachable by a minority), typically with graduate degrees and performing and directing others in highly technical and environmentally important work, but admittedly not subject to burns or smoke inhalation.
    We the people need to have a conversation about what salaries and services to offer looking at the big picture, where high salaries for some may mean no salaries for others but where medium-level salaries are more preserved.

  9. My View

    “We the people need to have a conversation about what salaries and services to offer looking at the big picture, where high salaries for some may mean no salaries for others but where medium-level salaries are more preserved.”

    Amen to that!

  10. inquisitive

    City salaries/benefits for clerical employees are much higher than private sector… professional employees are paid much less than on the private side, but the security of public employment & benefits push this to a little lower than equal… professionals have more ‘invested’ in college, post graduate degrees, licenses, etc… yet many on this site propose that the higher paid city employees (primarily professional)should take a greater “hit” in the current economic situation. Why should a professional person come/stay as a Davis employee? Over the last few years, except for firefighter positions, it has been very difficult to recruit qualified applicants for professional positions, and even tougher to “land” them… over the last few years, the ONLY “hook” was the benefits, and these are what is currently under the major ‘attack’ [tho’ salaries are too, sometimes].

  11. Greg Kuperberg

    [i]Over the last few years, except for firefighter positions, it has been very difficult to recruit qualified applicants for professional positions, and even tougher to “land” them[/i]

    No kidding! We had a popular city manager, who was hired away. The next city manager was fired. That’s a huge clue that the city manager isn’t overpaid at all.

    One huge clue among many. We had a school superintendent who was fired, and a police chief who was fired. The reputation of the school superintendent in particular is that he lost the district millions of dollars by overbuilding, and put millions more in jeopardy by missing a deadline for matching funds. These are all warning signs of what can happen if you hamstring recruitment.

  12. Think!

    Wait a minute! Just because you pay someone more money doesn’t necessarily make them more qualified. We paid David Murphy $240K a year, and he was an unmitigated disaster. Hammond, the currennt school supt, only makes $190K, and is probably much better. There is a fallacy in thinking that offering bigger salaries gets more qualified people; and holds more qualified people here.

    Joe Paterno, the football coach for Penn State Nittany Lions, turned down an offer to coach a professional team for considerably more pay. Why? His job was confortable, the town makes him feel welcome and deeply wanted, and there are lots of little perks that go w the job. There are other ways to retain good people without breakng the piggy bank! If we take the attitude we must be competitive in salary offerings with neighboring cities, we will end up bankrupt like Vallejo!

  13. angry

    Think! raises an interesting point… some compensation is intangible… his point about Joe Paterno is on mark… am familiar with State College, PA… (home of Penn State & vice versa)… being a public employee there is something generally respected by the community… members of their Council doesn’t frequently refer to employees as “deskworkers”… except for that, State College is VERY similar to Davis… my Dad grew up in a house on their Russell Boulevard — College Ave.

  14. Rich Rifkin

    [quote]Over the last few years, except for firefighter positions, it has been very difficult to recruit qualified applicants for professional positions, and even tougher to “land” them… over the last few years, the ONLY “hook” was the benefits, and these are what is currently under the major ‘attack’ [tho’ salaries are too, sometimes].[/quote]What is missing from this equation is the fact that there was a bidding war of sorts going on between government agencies — each being prodded by the people getting higher pay and better benefits. That bidding war is not only over, it’s in full retrenchment. There is not a single city or county in California (that I know of) which is not in some serious fiscal trouble. The state is in even worse shape. Government admnistrators — who almost never, by the way, move back and forth to the private sector (where the work is much harder) — are in massive oversupply at the moment and have no leverage at all to demand more in compensation. They are by the thousands getting less, lest the cities and counties they work for go bankrupt.

  15. Greg Kuperberg

    [i]Wait a minute! Just because you pay someone more money doesn’t necessarily make them more qualified.[/i]

    It’s true. You can spend $25,000 on a great car or $50,000 on a lemon. The same is even more true of people. It’s not as simple as offering a good salary, you also have to also have to make the offer wisely. And certainly if you give a manager a raise out of the blue, it may work as preventive retention, but it probably won’t change anything about how well he or she does the job.

    But that does not mean that we should just grab pensions because of some abstract theory of shared sacrifice. Maybe in this or that case we can get away with low-end compensation, but over time we’ll be sunk if we don’t pay the market rate. We don’t want management to be a revolving door, and we also don’t want managers that other cities wouldn’t touch with a ten-foot pole.

    [i]Joe Paterno, the football coach for Penn State Nittany Lions, turned down an offer to coach a professional team for considerably more pay.[/i]

    That could be, but I can tell you that he did not decide that a six-figure salary is too good for him. His compensation last year was seven figures, $1.03 million.

    But hey, maybe Paterno does something much more important than managing the Davis city government or the Davis Joint Unified School District. We’re talking big responsibilities here, not just the score on the field over there at Penn State, but also $35 million in annual football revenue. Granted, DJUSD has a $70 million budget and the city is $130 million, but that’s not important money, it’s just taxpayer dollars.

    [i]There is not a single city or county in California (that I know of) which is not in some serious fiscal trouble.[/i]

    And who says that the bidding stops at the state border? Hammond was superintendent in Washington State, while Antonen is now a city manager in Minnesota. (Whether they should have picked Antonen is a different question; clearly Davis and Maplewood have a difference of opinion here.)

  16. earoberts

    “But that does not mean that we should just grab pensions because of some abstract theory of shared sacrifice.”

    I’ve said it before, and I’ll say it again. If every public employee does not take a pay cut, including public safety, then there will be gov’t employee layoffs. Layoffs means those folks can’t make their mortgage payment. No payment, no house – it gets foreclosed on. A glut of foreclosed houses on the market drives the price of houses down. The lower lower the value of homes, the less the tax revenue coming in to the state to pay for services. If there is not enough tax revenue to pay for services, another round of layoffs will be the result. Right now the most important things to do is to keep people employed.

  17. Greg Kuperberg

    [i]I’ve said it before, and I’ll say it again. If every public employee does not take a pay cut, including public safety, then there will be gov’t employee layoffs. Layoffs means those folks can’t make their mortgage payment.[/i]

    If that’s the big concern, you could use furloughs, or take some people to half time or 3/4 time. Less work for less pay. A pension grab, so that you get the same work for less compensation, is a strange way to tell people that you care about them.

  18. Rich Rifkin

    [quote]A pension grab, so that you get the same work for less compensation, is a strange way to tell people that you care about them. [/quote]What do you mean by “a pension grab?”

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