Measure Q: Renewal of Needed City Revenue or the Continuation of Poor Fiscal Practices?

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Measure-Q-forum

Measure Q is the renewal of a half cent sales tax in Davis which generates on average three million dollars in general fund revenue.  The League of Women Voters forum gave us the opportunity to hear the Yes on Measure Q side as presented by Councilmember Sue Greenwald and the Non on Measure Q side as presented by David Musser, a Davis resident.

In addition, on Sunday, the Davis Enterprise published an op-ed written by four of the Davis City Councilmembers and three other individuals in support of the sales tax renewal.

At the end of this article, I will present my own commentary and critique of the situation.

League of Women Voter’s Forum

Sue Greenwald argued that “Measure Q is a simple renewal of our one-half cent sales tax.  If Measure Q passes you’ll be paying the same sales tax that you were paying before.”

She continued,  “This tax brings in about three million dollars which is huge in terms of our budget.  By comparison our reserve is only a little over five million.  Meaning if this doesn’t pass, we will run through our reserves in less than two years, we’ll be broke.”

Councilmember Greenwald suggested that some people have been happy with the way we make our budget decisions while others are unhappy.  “As people know, I’ve been one of the biggest critics of some of our budget decisions.  I’ve worked hard to try to get my way.”  But she said, “But we’re a democracy and we have the budget we have.”  She went on to argue that it is really critical if we want to keep our current level of services that we renew this tax measure.

“If you’re not happy with the decisions that the council’s made,” she said, “the thing to do is run for office yourself or find someone who will vote the way you want them to.  Otherwise, as I view it, it’s kind of cutting off your nose to spite your face.”

She said that the current recession has resulted in huge declines in local revenue.  Even if this passes, she acknowledged, we will have to continue to cut city spending.  However she said, “If it doesn’t pass, the situation’s really dire.” 

“We don’t want to destroy the city out of some irritation with some decisions that we might not have agreed with.”

David Musser responded, “The reason that the city is a financial crisis is not because residents are failing to support the city with money, it’s because the city made some really bad decisions.  Our residents are starting to pay for those decisions now.”

He continued, “I don’t like Measure Q because it sends the message to the city that we’re just going to hand them a blank check.  They can mismanage our money, mismanage with the employee negotiations, the fact that now some of the employees are making $100,000 a year, and if we go ahead and support this, that they’ll just continue to do that.  Then there will be less money for our programs.”

He further pointed out that these kinds of taxes are regressive, disproportionately impacting the lower income people as opposed to the higher income people.

In the argument for Measure Q, Mr. Musser pointed out, there was no acknowledgment or even mention of changing the way city fiscal policies have been conducted.   He said, “The city just says to the citizens, you need to put up with this if you care enough about… well you should just do whatever we say you should do.  I think that’s a little bit arrogant.” 

“Citizens,” he argued, “are very much hurt by the recession as well.  That means their ability to pay taxes.  It’s not just the city’s ability to finance things, it’s citizen’s ability to pay.  The city doesn’t mention that, they only seem to care about how their own skins are on the line.”  He continued, “I think the city has a history of taking individual’s support for granted.  I think that No on this measure is important to send the city a message that you can’t simply take our money, mismanage it, and then expect to get more.”

A critical question was asked of Mr. Musser which is if the Measure Q did not pass, what would have to be cut in order for the budget to be balanced.  “As far cuts go, parks and rec obviously is a place I might start, but the bottom line really is, the sizable majority of our money is being spent on the employee contracts and the city needs to be held accountable for negotiating these contracts.  If they don’t negotiate those contracts well, then you can’t just simply hand them more money because you know that that money is going to go down a rat hole and it’s not going to do what you need it to do.”

I will get back to this point shortly.

Op-Ed on Measure Q

Ruth Asmundson, Don Saylor, Sue Greenwald, Stephen Souza, Beth Lovering, Jay Gerber, Johannes Troost co-authored an op-ed that ran in Sunday’s Davis Enterprise supporting Measure Q.  The first four are members of the city council, Ms. Lovering and Mr. Gerber are business owners while Mr. Troost chairs the Davis Finance and Budget Commission.

“Without the revenue stream that the Measure Q renewal provides, the fiscal outlook for the city will be truly dire, and services cuts will seriously degrade our quality of life,” they write.  “The revenue that is generated by this half-cent sales tax supplement supports police, fire and emergency services. It helps to repair and maintain our streets, sidewalks and bike paths. It also goes toward street trees, landscape and parks maintenance.”

They go on to argue that the proposed 2010-11 proposed budget “continues a three-year series of cost containment budget measures. If the budget is adopted as proposed, the city will have implemented major general fund-balancing measures over the three years, including containment of increases in labor costs, and $1.8 million in direct program reductions. In total, general fund-supported staffing levels will have been reduced by more than 40 positions over this three-year period.”

They then go on to list out the following features of the previous year’s adopted budget that they argue “are aimed at further advancing the city’s overall goal of long-term fiscal stability.”

First they argue that it provides “citywide general fund cost savings.”  “These include reductions in overtime, travel and training, and implementation of more aggressive general fund cost recovery. While this category is distinguished from program reductions, there nonetheless are programmatic impacts of reduced staffing, whether at the management, supervision or line-staff levels.”

Second, they argue with regards to personnel costs, “We have significantly reduced the increases in labor costs that were built into our long-range budget, and have taken the first steps toward reforms on our benefits.”

The 2009-10 budget plan included significant short-term savings. So far, these negotiations are on track to achieve that level of employee concession. Agreements have been reached with three groups, and we are proceeding through impasse with the one remaining employee bargaining group to assure that we achieve our goals.

In 2010, we began negotiations with the remaining employee groups and expect to achieve significant cost-saving structural changes to our benefits package. These structural changes in the compensation packages are critical to achieving fiscal sustainability.

Third, they reduced programs.  “These include budget reduction proposals offered by individual departments. For 2009-10, departments were directed to submit proposals to meet specific expenditure reduction targets (7 percent for nonsafety and 5 percent for safety departments), totaling roughly $2 million. These program reductions represent the most direct negative effect to services provided to the community, and were implemented as a last resort, pending evaluation of all other cost-saving opportunities.”

They go to argue that they have attempted to keep the level and quality of services as a top priority and they have done all of this “in spite of state takeaways of more than $16.5 million since the adoption of the half-cent sales tax override.”

Commentary

The op-ed puts about as positive a possible spin on the fiscal situation as is possible.  Elsewhere I have gone to great lengths to demonstrate the insufficiency of the city’s budget reform measures.  This is the rhetoric we heard all along that people such as Lamar Heystek and Sue Greenwald exposed for what it was – empty rhetoric.  There was no real cost savings after the second year.  The salary decreases fell short of what was needed.  Those shortfalls forced the city to dip into their reserves, leading to the need this year for an additional $1.8 million in cuts.  We laid off additional employees and deleted positions, meaning city services have been diminished, despite the spin to the contrary, there is no way the city can operate at its lowest levels of staffing in over a decade without substantial service cuts.  And the idea that the city has even begun to address the unfunded retirement health liabilities or the pension problem is frankly laughable.

Therefore, I find the Op-ed to be more of the same rhetoric that was used to justify the passage of the budget in 2009 that Sue Greenwald and Lamar Heystek opposed and to justify the passage of the MOU’s that were passed, except for PASEA, by similar 3-2 votes.

When Davis passed the original tax measure back in 2004, they did under the guise of preserving city services.  Instead what we saw in the years following the passage of Measure P, a huge increase in employee salaries.  In fact, the 36% increase in fire salaries that followed the last round of employee bargaining negotiations consumed nearly the entire amount of Measure P half-cent sales tax.  In short, this tax measure subsidized the firefighters receiving an average of $140,000 per year in total compensation.

The last round of MOU’s did little to change this.  And now we are locked into three year contracts with fire and management that will do little to change the core problems that our city faces with its budget.  With employee bargaining negotiations off the table until 2013 at the earliest, we are forced to contemplate what life without the half-cent sales tax, an additional loss of $3 million in revenues might look like.

This leads me to the response by David Musser when asked for a proposal of what services would be cut should Measure Q not pass.

The city is already working on this contingency.  This was in last week’s budget staff report:

“Given the level of cost-savings and reductions implemented to-date, it is clear that the ½ cent sales tax is critical to the City’s ability to sustain our core and essential services. It will be impossible to support the current (albeit reduced) levels of public safety services, maintenance of infrastructure (including facilities, parks, greenbelts and open space), and advance our overall goals related to environmental sustainability, economic development and programming for youth and seniors without the resources to do so. In essence, the loss of revenues represented by the Sales Tax would force us to re-evaluate core services and reduce programs to levels not seen in many years.

The City Manager’s Office and department heads are currently engaged in an evaluation of all city programs and services and developing criteria to guide recommendations for future program reductions (whether these are necessitated by the results of the June election, or the need for further budget-reductions in subsequent fiscal years), and could inform upcoming Council direction related to the renewal of the Parks Maintenance Tax, expiring in 2012.”

Last year when Lamar Heystek opposed the proposed budget, instead of merely saying no, he presented an alternative.  At that point, it was not merely a matter of saying no, but rather there was something to say yes to.  The council could look at alternative scenarios and ended up in fact trying to split the difference.

This is a tremendous shortcoming in the No on Measure Q campaign – the failure to present what the city budget will look like if Measure Q does not pass.  The city does not need specifics to make their case, they can state it will be bad and talk about cuts to public safety and other core services.  We have seen tentative proposals from Paul Navazio that look bad enough, these included an 8% across the board cut, and a contingency that attempted a reduced cut for fire and police, and one that attempted no cut for fire and police.  Each one presented a rather bleak scenario.

Without a counter-balance, a story to tell that says, this is not as bad as the city paints it, it is difficult for imagine that the No on Measure Q campaign succeeding.  Unlike Woodland, the city is not changing policy but rather trying to keep the status quo.  That puts the burden of proof on the No side, telling us why we should change current policy and explaining why things will not be worse with $3 million less in city revenue.

Indeed, it is probably the biggest problem with the entire debate,  that there was never an alternative vision that was passed.  Contrary to what Mr. Musser indicated, that was his responsibility.  He did need to speak in specific terms, because the city’s counter is exactly what Sue Greenwald said when she indicated that she did not agree with the budget or fiscal priorities, but Measure Q’s failure at the polls would make it worse.

Mr. Musser tries to argue, “If they don’t negotiate those contracts well, then you can’t just simply hand them more money because you know that that money is going to go down a rat hole and it’s not going to do what you need it to do.”  The problem with that argument is that the money for contracts is already going down the rat hole, which is probably not an appropriate characterization of the situation.  By voting against Measure Q, it will not change anything that has been passed, or any of the contracts that have already been signed.  Instead it will mean that we will have to have fewer employees, which means less services.  It was Mr. Musser’s job to show us why that would not be worse than continuing the present level of funding and working to elect a new and more responsible council.  Unfortunately, he never attempted to do that.

Time is running out to make a credible case against Measure Q, right now it seems likely that it will pass overwhelmingly.  The bigger question is probably which council will manage those $3 million and will they do a better job of it than the 2004-2006 council did with the original tax measure.

—David M. Greenwald reporting

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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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39 thoughts on “Measure Q: Renewal of Needed City Revenue or the Continuation of Poor Fiscal Practices?”

  1. Doug Minnis

    Sure is a lot of chatter about 1/2 cent tax continuation. Start with the simple idea that it is needed ,even if the need is there because of mismanagement. We have a chance to elect better managers and they should make every effort at getting more budget control. However, I like the services I get in Davis and am willing to pay the bill. Every effort should be made to keep or improve these services. When I pay the bill all I ask is that the council does its best to find ways to improve management of the funds they have. And I have few complaints about that.

  2. rusty49

    Would Davis have passed the half percent sales tax if the voters knew the equivalent of all that money was eventually going to over-inflated firefighter salaries? Not a chance, but as David states that’s where all the revenue went. As politicians usually do they threatened and scared us with service cutbacks just to pour the tax into city employee pockets. I say No on Q and let the chips fall where they may. Fool me once shame on you, fool me twice shame on me.

  3. Greg Kuperberg

    You might as well simply have said that in the present crisis, government isn’t the solution, government is the problem. Campaigning against a tax renewal is just as Republican as sending ultimatums to unions.

    I’m not surprised that rusty49 likes these positions; at least his ideology forthright. It would be interesting to know whether Rochelle Swanson agrees, given her Republican positions in state and national elections.

  4. rusty49

    If I remember right, Measure Q was presented to us as a temporary tax. But as all taxes once the gov’t gets their paws on the money they don’t want to give it up so temporary becomes permanent. Keep feeding the monster and it only gets bigger and more out of control. At some point you have to pull in the reins. Greg, I’m fiscally responsible, I’m that way with my own house and budget and I expect our country, state and city to be the same way. Is that unreasonable?

  5. Greg Kuperberg

    rusty49, let’s put this in less emotional terms. It seems to me that whether or not the government is “a monster” and whether or not it’s “fiscally responsible”, you as a fiscal conservative would simply rather have less government than more. If you’re willing to say it that way, without invoking paws and monsters, then that is at least an honest, mature, consistent conservative philosophy. I don’t entirely agree, but I can live with it.

    What is much less mature and much more dangerous is the people who are libertarians when it comes to taxes and socialists when it comes to government services. As in, “keep your grubby paws off of my income, and it’s a crime if you stop doing what the government should do.”

    I think that this attempted Tea Party revolt against Measure Q has some of that problem. In any case the whole philosophy of punishing the city government for its payroll sins is exactly like Ronald Reagan. Here is what Reagan said about it in 1980: “John Anderson tells us that first we’ve got to reduce spending before we can reduce taxes. Well, if you’ve got a kid that’s extravagant, you can lecture him all you want to about his extravagance. Or you can cut his allowance and achieve the same end much quicker.”

  6. anonymous

    What is the position of the city council candidates on this measure?

    Have all city employees taken cuts?

    Musser also criticizes the sales tax because he says it is regressive. Is there any non-regressive revenue alternative available to the city?

    You might as well simply have said that in the present crisis, government isn’t the solution, government is the problem. Campaigning against a tax renewal is just as Republican as sending ultimatums to unions.

    It’s more nuanced than that. And it isn’t Republican, either, because Republicans don’t do nuance.

    I agree with Greenwald’s commentary, and his point becomes more obvious when you apply it to Thomas Randall’s opposition op-ed in Sunday’s Enterprise. It reads like a standard anti-tax Republican argument that you might hear at the State Capitol. Republicans used to be more pro-active in support of pushing government down as much as possible to the local level. They shave abandoned all that to take on a position more akin to anarchy.

    Problem with that op-ed is that Davisites, as a majority, aren’t anti-tax Republicans, . People in Davis will vote to tax themselves, as has been demonstrated in recent years. And there’s good reason to pass those taxes. They are investments that we choose to make as a community, and we expect to get value in return in our quality of life and maybe in home values. Davisites have passed this particular tax before.

    You don’t have to be an anti-tax Republican to oppose this. You can present a set of conditions under which passing the sales tax in the near future would be far more acceptable. For instance, cutting city salaries a little more and taking the savings to cover PERS obligations, or to demonstrate more convincing fiscal sustainability into the near future. You could co-opt Greenwald’s and Heystek’s recent city council arguments to support

    Such a stance would give more meaning for change if it were voted down.

  7. David M. Greenwald

    “What is the position of the city council candidates on this measure? “

    I believe all of the candidates are supportive of Measure Q.

  8. E Roberts Musser

    Let’s get real here. This is what the city has done, which is what they always do: CUT THE BASICS BUT KEEP THE FRILLS, to make sure that any tax cut will hurt the taxpayer deeply – so deeply the taxpayer will abjectly agree to continue paying existing taxes that should sunset/increase taxes. It is the name of the politicians game – spending OTM (other people’s money) at will with utter abandon – demanding in effect a blank check, otherwise dire consequences will be in the offing…

    To be specific, the city struck bad bargains with labor that were not in the best interests of the city (frills like the $400,000 battalion chief model for firefighters comes to mind; the refusal to do anything to revise the cafeteria cash out program; etc.) No real meaningul effort was made to rein in the runaway salaries/benefits/perks of city employees that the city can no longer afford. Street maintenance, and other basic services were/are placed in the “unmet need” category and the budget declared “balanced” to provide political cover for city staff and incumbent City Council members. Then if citizens don’t cough up the continuation of the sales tax to pay for the frills, the city turns around and threatens to cut basic services.

    And mark my words, worse is yet to materialize. The next thing coming down the road is a “public safety tax” to pay for road maintenance. Don’t be surprised if new taxes are created to pay for any of the services placed in the “unmet need” category. Make no mistake, city taxes are going to pay for the lavish employee salaries/benefits that were not addressed by the city/CC because an independent negotiator was refused in labor negotiations. In effect you had the fox (city manager who represents his employees) guarding (negotiating for) the hen house (citizens).

    Frankly, it is not up to the “No on Measure Q” people to come up with an alternate plan – it is up to the city. Some on this blog have suggested getting rid of many of the city planners they don’t feel the city needs anymore in light of the dire housing market. Others have suggested hiring cheaper outside contractors rather than having costly in-house personnel perform some city services. Others have suggested going to an all volunteer fire department. Some cities are disbanding their police departments, and working out MOUs with other law enforcement entities.

    But the city has effectively used fear to ensure it can keep doing business as usual. The fear of what services the city will decide to cut, if the 1/2 cent sales tax is not renewed, if the “public safety tax” and whatever other new taxes are being contemplated are not instituted. And like sheep, the city is going along with it – until when? At what point do citizens call enough is enough? At what point do citizens stop writing the blank checks to the city? At what point can citizens no longer afford to write the blank checks?

    I would be a lot more sympathetic to the Yes on Measure Q supporters if the city had made some effort to curb its spending – but it has essentially carried on business as usual. And will continue to do so if taxpayers are still willing to cough up the taxes to pay for the frills. Why not? For instance, the city is going to spend $400,000 for a new phone system, $435,000 to upgrade an aging IS infrastructure, according to the latest consent calendar… WHAT, THE CITY CAN’T MAKE DO WITH THE SYSTEMS IN PLACE FOR THE TIME BEING, UNTIL THE ECONOMY GETS BETTER? Those two items represent almost a million dollars in savings

  9. E Roberts Musser

    anonymous: “Musser also criticizes the sales tax because he says it is regressive. Is there any non-regressive revenue alternative available to the city?”

    The sales tax is regressive, and if more and more regressive taxes are added, it winds up taxing the “riffraff” ( = lower income) right out of town.

    anonymous: “You don’t have to be an anti-tax Republican to oppose this.”

    No, you do not have to be Republican to oppose this – Lamar Heystek is not Republican and stated from the CC dais he would not support the continuation of the sales tax if the city did not make an honest effort to curb its spending in labor negotiations. Well guess what, the city didn’t make an honest effort…

  10. E Roberts Musser

    Sue Greenwald: “Meaning if this doesn’t pass, we will run through our reserves in less than two years, we’ll be broke.”

    Who’s fault is that?

    David Musser: “I think the city has a history of taking individual’s support for granted. I think that No on this measure is important to send the city a message that you can’t simply take our money, mismanage it, and then expect to get more.”

    It’s called accountability.

  11. anonymous

    The sales tax is regressive, and if more and more regressive taxes are added, it winds up taxing the “riffraff” ( = lower income) right out of town.

    You didn’t address the original question. I don’t know much about tax alternatives, but the only progressive (=non-regressive) tax that I can think of is the income tax, or maybe luxury tax. Can the city implement such taxes?

  12. E Roberts Musser

    anonymous: “You didn’t address the original question. I don’t know much about tax alternatives, but the only progressive (=non-regressive) tax that I can think of is the income tax, or maybe luxury tax. Can the city implement such taxes?”

    What the city can do is be more responsible about how they spend OTM (other people’s money). In your question, you are assuming we need the tax revenue – my contention is that the city needs to do a better job in budgeting. The city will always WANT more tax revenue. For instance, how about revising our policies to make the city more friendly to business? Business generates tax revenue…

  13. Rich Rifkin

    [i]”You might as well simply have said that in the present crisis, government isn’t the solution, government is the problem. Campaigning against a tax renewal is just as Republican as sending ultimatums to unions.”[/i]

    This is simply a meritless, ad hominem attack. Greg can’t make his point logically. So he calls David an epithet–or what Greg hopes equates to an epithet in Davis politics, a Republican. (Oooh!) That’s not doing anyone any good as far as this debate goes.

    That said, I am in favor of renewing the sales tax (though I opposed it in the first place and would vote no if it had failed and were being re-introduced). I don’t have time now–in the middle of my work day–to explain. But the City needs that money, regardless of how badly it has been used.

  14. anonymous

    Elaine, you still avoid my question. I don’t disagree with you that the city can be more responsible with budgeting. David Musser, through Greenwald’s transcription, made the case that a sales tax would be unfair because it is regressive. I just want to know if he had in mind any fairer way that the city could implement a tax.

    Assuming I’m really only persuaded to oppose Measure Q because of David Musser’s point that it is unfairly regressive, you could cinch the case for me by pointing out a fairer alternative. Is there one?

  15. rusty49

    “Assuming I’m really only persuaded to oppose Measure Q because of David Musser’s point that it is unfairly regressive, you could cinch the case for me by pointing out a fairer alternative. Is there one?”

    Yes, stay withing your budget and not overpay for city employees as Davis is doing now then you don’t have to keep going after new taxation.
    It’s quite simple.

  16. Rich Rifkin

    [i]”a sales tax would be unfair because it is regressive.”[/i]

    I think that is a valid consideration with regard to excise taxes. An extra $100 onto the price of a given car* is a much higher percentage of the total income of a lower income person than a higher income person.

    *It’s fair to say, “But rich people buy expensive cars; and poor people normally don’t.” True, in general. But think of the $5,000 used car that a wealthy family might buy for one of their kids. That’s the same car which might be bought by a family with less money as their primary vehicle.

    {i]”I just want to know if he had in mind any fairer way that the city could implement a tax.”[/i]

    To my mind, the two fairest taxes are income taxes and property taxes, the latter esp. when public improvements (such as parks and greenbelts and streetscapes) result in added property value. Parcel taxes are esp. unfair in that regard, as the owner of the small cottage far from public improvements pays the same as the owner of a large mansion next to a greenbelt. Yet neither of those “fair taxes” is viable for the City of Davis.

    The most important thing, long-run, is for the members of the City Council to budget and spend public money as cautiously as possible, always understanding that their first fielty must be to the taxpayers, the ratepayers, and residents who rely on services. The contractors who do business with the city will represent their private interests as best they can in negotiation. I don’t agree with the Kuperbergian thesis that we should not drive as hard a bargain as possible with our contractors or city labor groups. Those private interests will do what they believe is best for themselves. We ought not do their bidding.

  17. Ishmael

    It seems to me that any discussion of city revenue needs and fiscal practices is incomplete without at least acknowledging the DACHA and NewPath SNAFUs. Don’t these represent potential unfunded liabilities of sufficient size to materially affect the city’s balance sheet in the short term?

  18. Greg Kuperberg

    [i]I don’t agree with the Kuperbergian thesis that we should not drive as hard a bargain as possible with our contractors or city labor groups.[/i]

    Actually, my thesis is that you shouldn’t drive a bargain that is harder than what is possible.

    Since people have mentioned Vallejo so many times, it is worth remember that that is exactly how Vallejo started down its sad road. It is true that certain labor laws were different then and public safety workers could legally strike in California. However, the general principle applies: They tried to drive a bargain that was harder than what possible. In so doing, they created a backlash of binding arbitration and high compensation that continued all the way to bankruptcy.

    The other California city that went to the verge of bankruptcy lately is Half Moon Bay. They also tried to drive a bargain that was harder than what is possible, but in their case with a developer rather than with unions. The developer sued, and he was awarded more money than the city government had.

  19. hpierce

    Ishmael does not understand the Newpath issues… Ishmael may or may not be correct re: DACHA… If you want to find out more re: newpath, try googling it & Irvine… if you think that Davis got into trouble by issuing permits to Newpath, check out Irvine’s experience when they did not. ~ 5 years of litigation, and still running…

  20. J.R.

    There has been an attempt by some (mainly one) on this board to dismiss certain people as not suitable for Davis society on the basis of their past or present associations with a certain political party.

    Historically, this phenomenon was called “McCarthyism”.

  21. Greg Kuperberg

    Excuse me, JR, but there is a difference between being suitable for Davis society and serving on the city council. Everyone running for city council is entirely suitable for Davis society, and so are all of their friends. But when someone is running for elected office, there is such as thing as relevant political associations.

    There is this newfound, strained attitude that national and state ideologies have nothing to do with issues in Davis. But that’s nonsense, they certainly are relevant, except to those people who think one way about Davis and another way about issues outside of Davis.

    I will repeat what a Republican gubernatorial candidate named Meg Whitman said in an ad that is running right now ([url]http://www.megwhitman.com/story/3891/meg-whitman-campaign-launches-new-television-ad.html[/url]):
    [quote]Our next governor must be tough enough to stand up to the unions and the politicians they control.[/quote]
    Is this statement anything other than mainline Republican? Is it anything other than relevant to Davis politics, if you replace “governor” with “city council”? I admit that I think that it’s been overplayed at the local level, but it sure is relevant.

    It would be interesting to ask the city council candidates whether they agree with Meg Whitman’s sentiment. It most certainly would not be “McCarthyism”. (It’s also worth remembering that the first person to stand McCarthyism on its head and falsely claim to be the victim was Joe McCarthy himself.)

  22. Rich Rifkin

    [i]”Since people have mentioned Vallejo so many times, it is worth remember that that is exactly how Vallejo started down its sad road.”[/i]

    Vallejo “started down the path” 15-20 years ago when its fire union and its police union teamed up and elected a new city council which was amenable to its demands for higher salaries, benefits and pensions. I’m sure you are aware that the city manager in Vallejo strongly voiced his concerns about the spending habits of the city council; and told them they could not afford to raise their labor costs so much. In response, the police and fire unions hired an airplane to fly over the city of Vallejo with a banner that read, “Fire the city manager.” The council then fired him.

    [i]”It is true that certain labor laws were different then and public safety workers could legally strike in California.”[/i]

    Since the discussion of the “right to strike” by public safety workers in California came up, I emailed a cousin of mine who teaches law, but not labor law, and I asked her if cops and firefighters could strike in California and if the law had changed recently in that regard. She said firefighters have been forbidden to strike for a very long time. She quoted this code:

    [b]California Labor Code Chapter 4 Section 1962.[/b]
    [i]”Employees shall have the right to self-organization, to form, join, or assist labor organizations, to present grievances and recommendations regarding wages, salaries, hours, and working conditions to the governing body, and to discuss the same with such governing body, through such an organization, [u]but shall not have the right to strike[/u], or to recognize a picket line of a labor organization while in the course of the performance of their official duties.”[/i]

    She said it is more complicated with cops. She said [i]they can legally strike[/i], as long as doing so does not in the opinion of the governor of California endanger public safety. (I did not think to ask if the law requires that before they go on strike, they inform the governor of their intentions.) But, she said, in practice, they cannot strike, because doing so almost always does endanger public safety. This is the code language she refered me to, which she said has not changed:

    [b]Chapter 9 1137.2[/b]
    [i]”(a) Whenever in the opinion of the Governor, a threatened or actual strike or lockout will, if permitted to occur or continue, significantly disrupt public transportation services and endanger the public’s health, safety, or welfare, and upon the request of either party to the dispute, the Governor may appoint a board to investigate the issues involved in the dispute and to make a written report to him or her within seven days. Such report shall include a statement of the facts with respect to the dispute, including the respective positions of the parties, but shall not contain recommendations. Such report shall be made available to the public.”[/i]

  23. Ishmael

    By all means. Google the Irvine case. And carefully read all the previous NewPath threads on the Vanguard, as well. Davis got into trouble because the staff strung NewPath along until they had expended approx $1M of their capital. NewPath is a relatively small company and this is not loose change for them. If the proposed project had been adequately vetted and managed by the directors of CDD and PW, under competent supervision by the City Manager, we would have avoided this situation IMO.

    Regarding fiscal practices, I would be very interested to know if the city billed NewPath for staff time during the 12 months leading up to the train wreck. If they didn’t, why were we subsidizing the application? If they did, no wonder NewPath is litigious.

    The main issue, however, is the ongoing impact of these types of SNAFUs on the city balance sheet. Has NewPath cost us $50,000 so far? $500,000? What’s our total potential liability? Does anyone in the public have this information?

  24. Greg Kuperberg

    [i]Vallejo “started down the path” 15-20 years ago when its fire union and its police union teamed up[/i]

    No, Rich, Vallejo started down the path in 1969, when the fire union and the police union teamed up and went on strike. Binding arbitration went to a city referendum in 1970, which then passed. As Sue Greenwald pointed out, binding arbitration would be a game changer.

  25. Don Shor

    “Ms. Lovering and Mr. Gerber are business owners…”
    A regrettable choice of business owners to sign on this op-ed. Beth Lovering and Jay Gerber were vigorous supporters of Target, putting them out of step with the overwhelming majority of local retailers. I don’t know if the Chamber has endorsed Measure Q, and I believe the DDBA doesn’t do endorsements. So it is hard to say what the position of local businesses is on renewal of the sales tax. But Lovering and Gerber were speaking only for themselves on this op-ed.

  26. J.R.

    Frankly, I find it a bit creepy that someone would do an
    exhaustive search through the web to see if someone is associated
    with Republicans, and if yes, declare them unsuited for Davis public
    office.

  27. David M. Greenwald

    Don: Interesting point. I had the same concern about Mr. Troost using his title as Chair of the Finance and Budget commission both on this and the official ballot statement. As you probably know, the council really started cracking down on the use of the title four years ago, when Cecilia was in the news advocating for a police oversight commission and they said at that time, unless someone is speaking for the commission, they cannot use the title without qualification. Is Mr. Troost speaking for the commission? Did they pass a resolution in support of Measure Q? I don’t know the answer to that.

  28. Greg Kuperberg

    JR, first, looking at Rochelle Swanson’s LinkedIn page is hardly an “exhaustive search through the web”. Or maybe you could call it exhaustive, but only because three minutes with Google is already pretty exhaustive. Second, she is certainly not unsuited for public office. There are local leaders in Davis who come close to that failing level, but not her. The question is simply what she or any of the candidates stand for.

    And to the extent that I intend a criticism, my real point is that certain non-Republicans in Davis have been hypocritical.

  29. Ishmael

    Greg and/or Rich,

    Could either of you summarize how the City of Davis benefits package for a senior staff member compares to the benefits package for a tenured UCD professor, including spousal benefits? Relative to percent of total compensation, does the City or UCD provide more benefits? I’m sure you have covered this in detail in the past, but your debate has been so extensive that it is hard to find the information.

  30. Greg Kuperberg

    Ishmael, it’s a good question, but as far as I know, it isn’t easy to find a quantitative answer. On the surface, city benefits look better. The basic retirement formula for faculty is 2% at 60. We get full family medical benefits, but with no cafeteria cashout. For the past decade or so we were not asked to make any pension contributions, because UCRP was thought to be rolling in the gravy. Now there is a huge unfunded liability, just as with CalPERS and CalSTRS.

    But that is a very narrow picture of what is really going on. Even though the benefits formulas are technically better for city workers, I would much rather be a tenured professor than a city employee. You’re taking the wrong ratio if you say that their benefits look 50% better (say) than our benefits. You should instead compare total compensation, salary plus benefits, and you should look at job freedom and job security. Here then are the main considerations:

    1) Faculty who are on 9-month salary can get up to 2 months of summer salary if they are awarded research grants.

    2) Faculty salaries are at the high end of city salaries. A fair number of faculty make more money than any city employee.

    3) It is almost impossible to lay off faculty. Tenure is stronger protection against layoffs than union security.

    4) Faculty get a tremendous amount of freedom to define their own duties. Now, if it looks like you don’t work hard, you won’t get promoted as quickly and you won’t get research grants. But you have nearly complete freedom to decide what to research, and significant discretion in what courses to teach.

    If this sounds really cushy, in a way it is. The point is that faculty are highly skilled workers who could make a lot more money in the private sector, typically twice as much. Faculty offer advanced skills at a bargain rate in exchange for job freedom and job security. This is somewhat less true in the humanities, but they have to teach more and they are less likely to get summer salaries from grants.

    If you are interested in university salaries (including grant money, but not benefits), you can browse Jeff Bergamini’s database ([url]http://ucpay.globl.org/[/url]) to your heart’s content. It’s one year out of date, but it has several years of data and it gives you the general idea.

  31. Ishmael

    Greg,

    Thanks. So if the benefits formulas are technically better for city employees, I can see the logic in demanding that they be rolled back to parity with UCD (IMO, intangibles like job security and job freedom should not come into consideration). Is parity with UCD the target of the progressive proponents of benefit reform, or are they pushing for something more severe?

  32. Greg Kuperberg

    Yes, Ishmael, everyone can see it. The issue is that some of these benefits were until recently heavily subsidized by CalPERS, and it didn’t make a lot of sense for cities to pass up this free money. Of course when CalPERS developed an unfunded liability, the subsidy turned into a tax. Anyway, because of CalPERS and for other reasons, benefits are simply more the style in which municipal employees are paid. But even if you set aside job security and job freedom as intangible, total compensation for faculty is a lot better.

    Even so, I agree that the city benefits seem too high, even though I don’t know that parity with UC Davis is a relevant principle. Up to a point, I could agree with the “progressive” proponents of benefits reform. The problem is when they have taken reasonable principles to a control freak extreme. For instance, the unions did concede some benefit cuts for new employees. In response to that, Sue Greenwald said, no that’s not good enough, it’s unfair to treat new employees differently. What is severe is to ride roughshod over negotiations with abstract ideology. Indeed, another example is her argument in the Enterprise that negotiations aren’t even all that important, because the city can just hand the unions ultimatums in the form of “last, best offer”.

    In fact, I don’t think that anyone has in mind compensation that is so low that I would really call it “severe”. The closest to that is a sentiment to punish the city manager for getting paid more than his subordinates, and for being disloyal to the cause of compensation ultimatums. No matter what, city workers in Davis would be paid better than in Arizona, say. But if the city council handles this the wrong way, what it could do is destroy morale and convince city workers to do their jobs badly. The whole point is to get the most service for our money, and not simply to pay people less.

  33. Rich Rifkin

    [i]”Of course when CalPERS developed an unfunded liability, the subsidy turned into a tax.”[/i]

    For the City of Davis, long-term, the great unfunded liability risk is with retiree medical. The PERS pension problem — having its own portfolio too low in value to fund current pensions — is (I believe) temporary*. The higher rates for PERS should not last. Yet unless we modify the retiree benefit, we will go broke. The City has no way of paying off (or at some point making payments on) that bill. It’s just too large.

    I think the solution is obvious: only allow retirees 65 and older to receive it, unless the person is disabled. That alone will discourage many healthy city employees from retiring young. The cops and firefighters who retire younger than 65 get such large pensions, they can afford to pay for their own medical for a few years, until they reach 65. That solves about 75% of the problem. The rest has to be solved by making retirees pay about 20% of the cost; or buying them a plan which is 20% less lush.

    —–
    *Temporary? I think PERS should be able to achieve market returns fairly close to their projected total (7.75%) over the long-term. I’m a bit of a bear on the NYSE, but less so for a global investor. Yet every time there is a bear market, PERS is likely to run into problems unless they reduce the volatility of their investments (as the Stanford group suggested). There may be other ways of warding off that kind of risk, including never reducing member rates in good times (which is what they did for a period beginning in the late 1990s).

  34. Greg Kuperberg

    Rich, as long as we’re discussing “obvious” solutions without regard for how to implement them, the obvious solution is to lower the age of Medicare eligibility from 65 to 50. Or ideally to lower it to zero. It is widely accepted that Medicare drives a hard bargain and covers sicker and older people than the private sector could for the same cost. Moreover, that tying health care to employment is a drag on the economy.

  35. Don Shor

    “…the obvious solution is to lower the age of Medicare eligibility from 65 to 50.”
    Expanding Medicare to 55 was one of the ideas floated during the national health care debate, and the Obama administration even seemed to be on board with the idea. But it fell by the wayside.

    Doug Minnis said, “We have a chance to elect better managers and they should make every effort at getting more budget control.”
    Depending on who replaces Don Saylor, the council will likely have a majority that has never dealt with city budget issues. Renewing the sales tax is just a stop-gap measure.
    I really think this would be a good time for an outside commission to assess the budget and make recommendations for long-term cost savings. I know we have at least one retired analyst from the Legislative Analyst’s office here in Davis, and probably a couple of UCD professors could be dragooned into public service for a few months. Employee costs, long-term pension and benefits issues, possible contracting out of some services, reorganization of departments, and other possible changes could be reviewed and a comprehensive budget report could be presented. It would help the new council and could also be educational for the public. And when neutral fact-finders present options, it provides a degree of political cover for hard decisions that need to be made.

  36. Rich Rifkin

    [i]”Moreover, that tying health care to employment is a drag on the economy.”[/i]

    I agree. ([url]http://4.bp.blogspot.com/_-iCrgpX1jNM/SoyTEgVXD7I/AAAAAAAAAMI/7XIUAIt7em4/s1600-h/Health+reform.jpg[/url])

  37. Rich Rifkin

    [i]”I really think this would be a good time for an outside commission to assess the budget and make recommendations for long-term cost savings.”[/i]

    I think that’s a good idea. I agree esp. with your point that “it provides a degree of political cover for hard decisions that need to be made.” You should know, though, that the city has a Budget & Finance Commission, already. Its members are well qualified to take on this task. Johannes Troost, the chairman, is quite capable. The problem, as I see it, is that city staff (namely Paul Navazio), under the guidance of the current council majority, narrowly shapes the scope of the work of the B&F Commission; and doesn’t even ask for its input on any of the big decisions, like labor contracts. Rather, after the fact, they want the B&F to tell them what the budget picture looks like years down the road.

  38. Don Shor

    The B&F Commission would certainly have a role, and Johannes is well-qualified to review the end-product of an outside commission. Perhaps he could act as a liaison. But you’ve identified the problem with using an existing commission for a broad review. The way George Tchobanoglous and others reviewed the water and sewer projects was very useful. Staff input and support should be kept to a minimum. I think the new council would benefit from outside advisers.

  39. Musser

    Indeed, it is probably the biggest problem with the entire debate, that there was never an alternative vision that was passed. Contrary to what Mr. Musser indicated, that was his responsibility.

    The “alternative” to poor fiscal mismanagement is good fiscal management. The vanguard has made the case against Q better than I could have in its discussions of the employee negotiations, reckless spending on development projects, and how it has led us to the situation we are in now.

    I’d like to thank councilman Lamar Heystek for having the courage to go out on a limb to oppose this tax.

    The fact of the matter is:
    1. The City cannot do this forever. You have a terrible economy with layoffs, water and sewer fee increases, multiple sales taxes coming down the pike with a vat tax, county sales tax increase, you have the state possibly taking funds from the city…… in other words, something is going to have to give. Eventually, you cannot get blood out of a turnip. The city is going to be forced into managing its money well. Either that will come volunarily or involuntarily.

    2. one thing Miss Greenwald said in our debate that I personally take issue with is how we need to pass this tax to show “we care” about our city.
    a. the vanguard just did commentary on how the city passed an expensive development project that cost the city about 3/4 of a million dollars. Obviously, our cities’ leaders don’t care about how the money is spent, so why fork over more cash to people who don’t really show they care about Davis? yet in the next breath they will complain about the three million shortfall if the tax fails.
    b. it is precisely because I do care about the town, that I’m willing to prevent city leaders from financially damaging the city by witholding my money to them.

    Although I disagreed with Miss Greenwald on the core issue, I did agree with her statement about voting in good leadership, and how that is important. Daniel Watts came off in the debate as a powerful candidate, willing to take tough stances on fiscal issues, and recognize where the problems are and speak up about them.

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