My View: Will Not Support Sales Tax Measure in June

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walletOn Tuesday night or to be more precise, Wednesday morning, the council, after engaging in a protracted and often maddeningly circular discussion, finally settled on a six year, half-cent sales tax to go on the June ballot with no advisory measure.

There are a number of concerns I have about this resolution.  First, by going with a revenue measure that only raises about $3.6 million of the needed $5.1 million (which we had all agreed was actually far too low), the council has once again pushed off the discussion and the placement of funds needed for road repair for at least six more months.

As Matt Williams pointed out both on Tuesday night/Wednesday morning as well as in various comments on the Vanguard, that additional deferred maintenance will simply add to the city’s bill.

The council believes it will put a parcel tax on the ballot in November to cover those infrastructure needs.  The council has – as Councilmember Lucas Frerichs pointed out – not done any polling.  They somehow believe they can get a revenue measure through with a two-thirds vote requirement after raising the sales tax and after raising water rates.

The second problem is the trust issue.  During the run-up to the tax measure, I made it very clear that my support for the tax measure would heavily depend on the degree to which the council could commit that new revenue generated by the sales tax would go to structural shortfalls and deferred maintenance, rather than to increased employee compensation.

There is a history here as I have recounted many times – in 2004 the council passed a half-cent sales tax that was supposed to keep parks open and prevent the city from having to lay off city employees.  Somehow, though, the council turned around in 2005 and gave away the store.  The firefighters got a 36% salary increase and other bargaining units got 15 to 18%.

The city has limitations on what they can do with a general use tax.  The city cannot bind itself to spend the money a certain way, because that would require that the vote be two-thirds.

One councilmember suggested that times have changed and that the council could not get away with turning around and giving away the store again.  But they seem to forget that, in two years, we will likely have a different council.

The councilmember illustrated that what this means is that it is important to select the right council to lead the city.  While that is undoubtedly true, it is not a very reassuring thought.

Another councilmember suggested that the half-cent sales tax and $3.6 million in revenue is small and therefore will preclude it being used for salary increases as it will go to pay for the city’s increasing water bill, PERS contributions and retiree health costs.  They argued, “There was no point in an advisory measure for the smaller amount.”

Moreover, as they pointed out, trying to create an advisory measure that was specific enough to be meaningful and not specific enough to convert it from a general use tax was very tricky.

Increasingly, I agree.  The only sure way that the council will not in two years’ time or four years’ time be able to move to go back to four on an engine, eliminate boundary drop, or shared services with UC Davis and give increased compensation to the firefighters and other city employee groups is if the council does not have the money to do it.

Interestingly enough, that puts us back into parcel tax territory, not sales tax.

The person who proposed that was Mayor Pro Tem Dan Wolk.

Dan Wolk noted that if we want to increase the revenue we take in and direct it toward infrastructure, “I think the challenge is, is the sales tax measure the route that we take to address those large infrastructure items.”  He added, “My conclusion was the parcel tax, even though it was a two-thirds vote, was the way that I kind of came down, because that allows you through a measure to say, ‘hey voters this is what we’re going to do with this money, this is the only thing we can do with this money…’”

A parcel tax would allow the city to direct money exactly to where it needed to go and could avoid the pitfall or temptation of the council turning around in a few years and giving it to employee groups in the form of increased compensation.

The problem is that this discussion occurred as the clock literally and figuratively was about to strike midnight.  Council had no time to really reflect on their discussions – most of which was the first time the issues were actually discussed in this kind of detail.

Pushing this process off to the end of the night, to the very last date they could put a sales tax measure on the ballot, hurt this community.  While I disagree with Mr. Wolk in putting it all on June, at least he saw the bigger picture.

What the council chose to do on Tuesday night/Wednesday morning is actually the worst of all worlds.  What we are being asked to vote on is a partway measure that addresses immediate imbalance but does not address the infrastructure issues.

We fail to put real money – once again – behind infrastructure needs.  We roll the dice that we are going to be able to get a second chance in November to come around here – a time when the voters will be asked to vote on a number of other issues, including a Measure R vote.  This was just not well thought out and the process by which the council operated lent itself to this debacle.

Moreover, without an advisory vote, without any discussion by council about how they can commit to staying the course, and without any real acknowledgement from the council that there might be trust issues on the part of the community – how can they expect us to blindly support them?

Let us be blunt – is there a reason why we should trust the city?

In the last year, the council did a good job of taking care of business.  They put forth a very reasonable package of reform that they got five city bargaining units to agree to and, when DCEA and fire refused, the city imposed their last, best, and final offer.

The city also initiated long-needed reforms to the fire service that included reconciling response times with more realistic goals, boundary drop and then the contested measures – staffing reductions and shared management services.

The last two, though, illustrate an emerging concern – those were 3-2 votes and with a coming shake up of council with the decision by Joe Krovoza not to run, the possibility of Rochelle Swanson not being reelected, and the potential that Dan Wolk is gone by January 2015 – there is no assurance that this will continue.

The city manager, who helped engineer much of the reform efforts both personally and by positioning people like Scott Kenley and Yvonne Quering into key spots, is leaving.  Some of the turmoil from the fall and an ill-fated attempt to oust him played a large role in that.

It was pointed out to me that this community has a trust issue – well, why shouldn’t it?  The city of Davis finally had a council that was able to work together without devolving into petty bickering, and that has been almost torn apart by job obligations that prevent the council from meeting more than twice a month, and political ambitions.

Two of the councilmembers decided to run for higher office and two decided that they needed to take marching orders from corrupt union leaders.

Steve Pinkerton was, by most standards, the best city manager in at least a decade and he will be gone by April 28.

So, while we achieved much in the last year, much more can be undone by a 3-2 vote if the council changes after June.

All of that said, this is not necessarily a suicide pact.  While the polling by the chamber of commerce left something to be desired, they did show us a potential short-term way forward.

Councilmember Lee said on Tuesday that belt-tightening did not mean laying off more city employees.  “I don’t support lowering the police force,” Councilmember Lee.  “It’s nice for us to talk tonight, the problem is that what we decide tonight is what goes before the voters in June.  If we think there’s this mysterious efficiency and waste savings that we can make, I’m not comfortable planning what we propose which requires us to lay off ten or fifteen employees.  Absolutely not.”

“If someone shows me a plan where we’re able to maintain services and there’s some magic way of reducing this $2 million that we’re talking about, great I’m for it,” he said.  “But without a specific proposal on the table which outlines how we’re wasting $2 million, I’m not comfortable with this idea of laying off city employees.  Absolutely not.”

While Joe Krovoza pointed out the half cent sales tax leaves you $1.5 million short, Brett Lee responded, “If you subtract the $2 million for the road repairs, the half cent covers all of that.  We definitely need a parcel tax to cover the roads costs.”

That also gives us an opportunity.  Subtracting out the $2.5 million for infrastructure altogether leaves about $2.6 million to be cut until the parcel tax could be approved in November.

The Chamber’s poll gives us a road map.  While there are a few cuts that would be detrimental to the city, a one-time decrease in funding for recreational support from the city could both give us a short-term solution that does not involve layoffs while at the same time giving a large community of people ample reason to support the parcel tax in November as a way to restore full funding.

It is not the best option, but voting for the sales tax at this time puts far too much trust into the hands of the unknown – we do not know what the council or city management will look like going forward and I for one have seen too much progress to simply roll the dice right now.

So I will be opposing the sales tax in June, and hope that things can come together in time for a parcel tax in November that solves the revenue problems for the city – while at the same time providing us with the assurances and accountability we need going forward.

—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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56 thoughts on “My View: Will Not Support Sales Tax Measure in June”

  1. Nancy Price

    Once again, “kick-the-can-down-the-road” politics on finance and budget. Leave the mess to a later council, while problems and costs increase. Shame.

  2. keithvb

    “The only sure way that the council will not in two years’ time or four years’ time be able to move to go back to four on an engine, eliminate boundary drop, or shared services with UC Davis and give increased compensation to the firefighters and other city employee groups is if the council does not have the money to do it.”

    Perhaps the best way to avoid this is to elect a new, responsible city council.

    1. Davis Progressive

      what’s the best way to avoid a council being bought off? when i voted for wolk, i thought i was getting the guy who was the third vote on the 3-2 to cut personnel costs in the face 150 employees. i got the guy who popped off to the new fire chief at the behest of the union president. lucas was the price i paid to get rid of both stephen and sue.

  3. Michelle Millet

    If the roads get bad enough we won’t be able to drive on them anymore, that should help us reach our goal of net zero carbon emissions, so we have that going for us.

    1. hpierce

      Hmmm … severely deteriorating roads would also have the advantages of “traffic calming”, and an increase in the need for local automobile services (re-alignments, tire replacements, etc) which would spur the local economy, etc. Sounds like a plan all true davisites should support.

    2. SouthofDavis

      Michelle wrote:

      > If the roads get bad enough we won’t be able to drive on them
      > anymore, that should help us reach our goal of net zero carbon
      > emissions, so we have that going for us.

      My guess is that if the roads get worse people will just trade in their electric cars and hybrids for big SUVs with big tires. The SUV below would get the kids to school even if Davis does not spend a penny on the roads for the next 20 years:

      http://www.autoblog.com/2013/06/13/2013-hennessey-velociraptor-600-suv-review-first-drive/

      1. growth issue

        LOL @ SOD, good point. Wouldn’t it be so juicy to see the Davis liberal environmentalists trading in their Priuses for big gas guzzling SUV’s because of the roads.

        1. Michelle Millet

          I may be way off base here, but I’m not sure gas guzzling SUV’s is the direction “environmentalist liberals” would go. Who knows, we may soon find out.

          1. hpierce

            And horses, unless fitted with diapers, will negatively impact bicyclists and stormwater quality much more than the dreaded greenwaste that is to be banned.

  4. Cecilia

    Elect Robb Davis for Davis City Council and he and our biking community can come up with more bike friendly streets so we don’t have to rely on vehicles so much.

    Never did I think that the streets in Davis would be as bad as the streets in St. Louis, MO. I think back to when I was in MO for a year for the Coro Fellows program after graduating from UCD and I could not believe how terrible the streets were. I thought to myself, “I’m glad our streets back home are not this bad…” Who knew it was just a matter of time…

    1. growth issue

      Where are all these bad streets at? I go all over town and the roads aren’t perfect but they certanly for the most part aren’t terrible either. They might be headed there but I see worse roads in other towns all the time.

      1. David Greenwald Post author

        Try this, exit westbound I80 at Olive Drive, turn right onto Richards, that’s one of the worst stretches of road in town. It’s a place where a lot of people enter Davis.

        The other key factor is the hugely escalating costs of repair going from $9 per square yard to $22 per square yard to $61 per square yard.

        1. David Greenwald Post author

          I just looked out the window here on F Street in Downtown Davis and see cracks and seams in the streets. Now the drivability of this street right now is fine, but as water seeps into the bed, it’s going to decay rapidly.

      2. Michelle Millet

        The problem, as I understand it, the cost of fixing the roads grows exponentially the longer we wait to fix them.

        I can’t remember what the numbers are but their was a staff report on this. Is seems it’s a lot cheaper to fix them before they get “as bad as they are in other places”.

      3. darelldd

        As others have said, if we wait until they’re all terrible, our debt and interest just increases exponentially. There are plenty of terrible examples all around. Just try riding your bike East on 8th street from F to H. Then, turn North up H. Or any place on Olive Drive. All you really need to do is drive a vehicle with tires the width of your thumb and you’ll very quickly see how bad many of the roads are. And even if the pavement is sound, generally the striping is not done properly or safely for all road users. Flying along in an automobile with suspension and fat tires isn’t the best way to determine road quality.

  5. iPad Guy

    What’s the concern about not going for an advisory vote? If approved, the money will get tossed into a big pot. Unless there’s a dramatic reduction in staff–something that the council seems unwilling to consider–the folks have got to get paid.

    Where are the lists of staff suggested cost reductions mentioned Tuesday (like, 12% and 25% optione)?

    1. Davis Progressive

      if you read it closely, the concern is not about the advisory measure but rather ensuring that whatever the commitments are now for priorities remain. if the council can’t make those assurances, then the idea is find a way that you can – parcel tax.

  6. Frankly

    If you think about the decision to underfund the general fund fund imbalance with a 1/2-cent sales tax increase rather than a 3/4-cent sales tax increase, whether intentional or not, the current council struck a balance with those that are demanding cuts and those that want the city to be able to pay its bills. The decision, intentionally or not, also helps prevent any future council from robbing from that increase to pay off their union political friends with pay increases.

    If you really listen to Brett Lee’s comments, I think he is making a point that those that want to cut now have a responsibility to help discover and design the cuts… but they need to be efficiency and fat and not essential city services.

    Also, partial funding of the gap still helps extend the messaging that new revenue sources are needed. We are not out of hot water yet with respect to our general fund, and if you don’t like services being impacted or cut, you better get behind allowing some peripheral land to be developed.

    Waking up this morning and thinking about the council decision, I was finding myself strangely supportive of what appears to be an unfortunate need for a bad choice that is also a reasonable compromise.

    My biggest problem is the lack of an advisory measure. Although non-binding, I felt and still feel, that it was necessary to help bridge the trust gap. They did not do it, so my level of trust is still about where it was. I think the lack of trust is going to be the main challenge for passing tax increase measures.

    However, I am going to encourage as many people as possible to vote for this sales tax increase while I am going to do my part working with other smart and creative people in the community to help create a plan for additional reductions in city expense to make up the remaining gap.

    I am faced with similar challenges in my business. We expected the economy to improve and our transaction volume to increase. However, the first four months of our fiscal year have been significantly lower than expected. So, to balance the budget for this year, I have to find things to cut. But I cannot allow those cuts to impact our service, because that will cause my business to decline even more as my competitors find ways to maintain or improve their service levels. This is the challenge of “DOING MORE WITH LESS”.

    I am sure that there are opportunities within our city government business to do the same. Since there is no competition in City government, and there are lots of foxes guarding the hen houses, we will need capable people from the community to start digging into the books and putting together recommendations. That work has already started and I am convinced that it will eventually bear fruit.

    Now, the unfunded infrastructure maintenance is still a large glaring problem. And I agree that we should look to a parcel tax measure in November. And for that tax to have any chance of passing there is going to have to be significant progress on a revenue replacement connection. That will need to be another initiative on the November ballot to approve a business park.

    1. Michelle Millet

      If you think about the decision to underfund the general fund fund imbalance with a 1/2-cent sales tax increase rather than a 3/4-cent sales tax increase, whether intentional or not, the current council struck a balance with those that are demanding cuts and those that want the city to be able to pay its bills

      I have been led to this same conclusion. If certainly offers more protection then a non binding advisory measure.

    2. hpierce

      As to “doing more with less”… why not go all the way with your business? Eliminate all benefits that you legally can do, pay only minimum wage, and demand 50% more performance? Sounds like a good business plan.

      Let’s all race to the bottom.

  7. odd man out

    GI asked: “Where are all these bad streets at? I go all over town and the roads aren’t perfect but they certanly for the most part aren’t terrible either. They might be headed there but I see worse roads in other towns all the time.”

    As one who has been bicycling 3 miles to work each day here for 30+ years (not to mention lots of other miles in the saddle –and I drive, too), the deteriorating roads are much more obvious to cyclists than motorists. Lots of cracks, gaps, “gatoring”. I try to avoid bike paths whenever possible, but some of them are hurting, too. In past years most of the damage I’d see on roads seemed to be attributable to large transit vehicles (obvious at many bus stops), and while those conditions continue to appear, it seems they are often fixed relatively soon. The more generalized wear and tear seems to persist in many places. A small crack or pothole may be noticeable to a motorist but can be disastrous to a cyclist.

  8. Mr.Toad

    Of course you won’t support it. Why am I not surprised? Conservatives always support austerity, layoffs and cuts to recreation for the kids. Your premise that passage will enable the council to lard it upon the fire department is completely unfounded because there is no extra money here they are simply trying to cover the deficit not go for extras. Simply because they didn’t do it the way you wanted is a hollow and lame excuse to fail to support the increase in the sales tax. Obviously they chose to go with the minimum on the sales tax to ease the burden on the business community and do a second parcel tax to fix the roads. Voting no will decimate this community. Its sadly disturbing that you would allow your personal animus towards city employees to color you position on the tax.

    1. David Greenwald Post author

      I made it very clear for weeks under what conditions I would support a sales tax. I even developed a way forward for a parcel tax. I have no personal animus for city employees. However, I do have concerns over the influence of a particular union boss and how that will all play out in the next months.

    1. Frankly

      You realize Toad that it is the union won statutory protection of their pay and benefits that would be the primary cause of layoffs. If the city could make some reductions in pay and benefits, no layoffs would be required.

  9. Day Man

    David: I do understand your argument, and yes you are being consistent, but I do find it amusing that these two sentences are back-to-back: “Let us be blunt – is there a reason why we should trust the city?” and “In the last year, the council did a good job of taking care of business.”

    In my mind, the latter is a satisfactory answer to the former. Yes, we’re anticipating significant changes in the CC and CM. Yes, there’s uncertainty. But there will always be uncertainty. The CC will ALWAYS have the ability and power to screw things up on a moment’s notice if they decide to do so. And CC members are always able to leave their position mid-term like Saylor or Wolk, introducing an element of volatility. If we require absolute certainty that our money will be well spent, we’ll never support any revenue increase, because certainty isn’t really possible. The best approximation I see is how they’ve been doing. I agree with you: this Council has used our money well. So I’m voting yes.

    (There are other people who think this Council has not spent our money well. It makes sense that those people vote no. I disagree with them, but if I buy into their beliefs, then the no vote makes sense.)

    1. David Greenwald Post author

      “I do find it amusing that these two sentences are back-to-back: “Let us be blunt – is there a reason why we should trust the city?” and “In the last year, the council did a good job of taking care of business.” ”

      But I think that dichotomy is what makes this a tough issue – if the current council and city manager were going to remain in place another two years, it might be viewed differently.

      1. Michelle Millet

        if the current council and city manager were going to remain in place another two years, it might be viewed differently.

        and council may have voted differently.

  10. mcd

    In the past I’ve voted for every parcel tax that has come along. Not this time. I simply can’t afford it. Years of 10+ percent increases in health insurance premiums and other, ongoing reductions of take-home pay, combined with the previous parcel taxes and upcoming big increases in water costs, mean I really can’t afford it. That’s not hyperbole in the least, either. I know there are quite a few people in Davis that have room in their household budgets to keep absorbing these taxes, but there are also quite a few at their limit. Right now. A sales tax may be regressive, but at least grocery items are not affected, and one has control over their consumption level, unlike the parcel taxes where we are committed to an ongoing obligation.

  11. Rich Rifkin

    BRETT LEE: “But without a specific proposal on the table which outlines how we’re wasting $2 million, I’m not comfortable with this idea of laying off city employees. Absolutely not.”

    Brett, if you outsource all of our fire services to the UCDFD, you would save $2 million (or more). We would not have to buy any new equipment. We could simply replace the city firefighters with UCD firefighters are all three city fire stations.

    But, of course, the city council isn’t really interested in saving money.

          1. Frankly

            I would reword that… it is the responsibility of the City Council to see to the needs and wants of the citizens of Davis first and foremost, and secondarily see to the needs of the City employees.

            What we have experienced is a City Council that has seen to the wants of the city employees at the expense of the needs of the citizens of Davis.

    1. Michelle Millet

      But, of course, the city council isn’t really interested in saving money.

      I don’t think that is a fair assessment, nor is it reflective of the decisions they made this year.

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