Official City Announcement on Pinkerton’s Departure

pinkerton-steveFrom Official City Release – City Manager Steve Pinkerton to Leave Post to Take New Position

City of Davis City Manager Steve Pinkerton announced to the City Council Wednesday afternoon that he has accepted a position as the general manager of the Incline Village General Improvement District. Pinkerton’s last day in Davis will be Friday, April 25. The city council will convene at its earliest convenience to consider its options for filling the city manager position, both on an interim and a permanent basis.

Mr. Pinkerton has been with the city of Davis since August 2011. Prior to his appointment in Davis, he was city manager for the City of Manteca for three years and led revitalization efforts for 13 years in Stockton as the director of the redevelopment agency. Pinkerton has also held managerial positions for the southern California cities of Long Beach and Redondo Beach.

Some highlights Mr. Pinkerton has accomplished during his tenure, working closely with the city council, include:

  • Reorganizing city departments and functions both to achieve cost savings and to better position the city to respond to the needs and goals of a 21st century community and shaving $11 million from the General Fund;
  • Executing a Management Services Agreement with UC Davis to share a Fire Chief and fire management staff along with dropping fire service boundaries with UC Davis, allowing for improved response time in the community;
  • Successfully negotiating MOUs with the majority of the city’s bargaining units which have reduced the city’s future labor costs by over $7 million annually;
  • Shepherding the city through the rate approval and design process for a new wastewater treatment plant and a joint surface water project with the City of Woodland;
  • Hiring the city’s first Chief Innovation Officer, Rob White, who is tasked with cultivating economic development and innovation throughout the community;
  • Completing the entitlement requirements for The Cannery, a 100-acre subdivision which will host a mix of residential types, commercial and office space and open spaces.

“I have enjoyed living and working in the dynamic environment of the Davis community over the past two and a half years. This is a highly educated, well-informed and involved university town, with an outstanding quality of life. Despite unrelenting budget challenges, I believe we have made significant inroads toward ensuring that residents can continue to enjoy a high quality of life. I know the City Council and city staff will continue to build on these efforts of the past few years,” said Pinkerton.

“Steve used his deep understanding of municipal management to implement a suite of major and highly challenging priorities of our council. Our clean water supply project with Woodland is underway after years of wishful planning. Economic development and land use planning with UC Davis are thriving. We have added a major new subdivision in The Cannery with elements that match our needs and values. Our plan to invest in our roads infrastructure is in place after decades of neglect. Our budget is as transparent and realistic as possible and our labor agreements have increased the prospect of long-term stability for our great employees and community services.” said Mayor Joe Krovoza. “Steve has left his mark on Davis by addressing all issues with great candor and creativity, and his legacy will benefit us for years to come. Steve concludes his service for us with Davis in an improved position to build on our unique strength and exceptional community values.”

Others in the community echoed the mayor’s sentiments. UC Davis Associate Vice Chancellor of Resource Management and Planning John Meyer said, “Steve was totally committed to nurturing the seeds of partnership with the university and those projects are now bearing fruit.”

Elaine Roberts Musser, current chair of the Senior Citizens Commission and former chair of the Water Advisory Committee, stated, “Mr. Pinkerton is a consummate professional and has been an outstanding City Manager, leading the city towards a more fiscally sustainable path.”

“Steve has served the City Council well through a very difficult set of financial and staffing decisions. I wish him the best as he embarks on a no less challenging job sorting out the water future of Incline Village,” said Cool Davis Executive Director Chris Granger.

Mayor Krovoza expressed gratitude that Mr. Pinkerton will stay on with the City until the end of April to ensure a smooth and effective transition.

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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29 Comments

  1. Rich Rifkin

    ERM: “Mr. Pinkerton is a consummate professional and has been an outstanding City Manager, leading the city towards a more fiscally sustainable path.”

    I agree with the first part. Pinkerton was a good choice and did his best for Davis for the last 2.5 years. However, it is hard to concur with the second part. Davis is not on a fiscally sustainable path. Davis is on a path to bankruptcy. That trajectory will be slowed down and delayed for some 5-6 years if the higher sales tax rate is approved and made permanent (which I expect it will be). But, despite the city manager’s best efforts, our City Council has never fully understood that it cannot keep raising the compensation rates of the City’s labor force at a rate faster than revenues into our city grow (about 2% to 2.5% per year). Over the next 5 years, without the tax hike, the labor compensation rates are going to grow about 2% per year faster than revenues will grow over that same period. And that is why we are in the mess we are in, now.

    1. David Greenwald

      I disagree Rich, we are not on a path to bankruptcy, we’re on a path to more service cuts. The city hoping to avoid them by going the tax – economic development route, but I don’t see bankruptcy.

          1. Frankly

            A city can file Chapter 9 or Chapter 11 bankruptcy if it is unable to meet its payment obligations. It does not have to be debt. Basically it just has to prove that it is insolvent. So, it would first have to cut all expenses that don’t have some statutory protection. But even this is a bit of a gray area.

      1. Rich Rifkin

        “I disagree Rich, we are not on a path to bankruptcy, we’re on a path to more service cuts.”

        That does not contradict what I said, David. We are on a road to bankruptcy, where the general fund will run out of money in the next fiscal year. However, there are options to alter our path to insolvency. One of those is to massively cut services.

        Another is to hike tax rates again and again. Another is to combine some outsourcing, some higher taxes and some changes in the growth of total comp in our labor contracts (after 12-31-15, or before that, if a fiscal emergency is declared).

        1. David Greenwald

          Bankruptcy isn’t merely about the general fund running out of money, it’s being unable to repay its debts. If the city runs out of money, they simply cut programs and layoffs employees. Bankruptcy is more than that, it has a legal definition and involves a legal declaration and I suggest you not use the term outside of its legal meaning if you are using it to mean that the general fund will run out of money.

          1. Frankly

            Bankruptcy can be declared by a city that cannot meet its obligations for paying its bills… debt or otherwise. A bankruptcy court/judge will certainly want to see an adequate effort to cut, but there is a limit to what would be expected beyond just the legally-mandated spending. For example, Stockton could cut their police force, but only to a point. No bankruptcy court would expect a city to layoff all employees. There is a limit. But, assuming Davis can cut enough non-statutory and non-essential employees to balance the budget, then you are correct that we will not file bankruptcy. Remember that our deficit is growing. Without revenue we will hit a point that bankruptcy becomes the obvious choice. When would that occur assuming no new revenue sources? Four years? Five years?

          2. David Greenwald

            This is from the Factfinding report for DCEA:

            Melissa Chaney “declared that throughout negotiations, the City never claimed either that it lacked money or was headed to ‘bankruptcy.’”

            The panel found, “The Panel carefully reviewed all of the financial evidence in the record. The Panel concludes that the City of Davis is in adequate financial health. Stated differently, the City is not in desperate financial straits like many other governmental entities in California. The City has earmarked funds to replace aging assets and to deal with its unfunded liability for future retiree benefits.”

            However, “There is not much margin for error” and “the DCEA failed to identify a source of money to fund generous pay raises or to retain lucrative benefits such as the PERS [Public Employees’ Retirement System] pick up and no employee contribution to health insurance premiums. Reilly conceded that although the general fund is not broke, the City can reasonably target an unreserved general fund balance at 15%. Also, while he characterized the enterprise funds as healthy, he never opined that they contain excessive amounts of money. Finally, Reilly’s analysis did not consider the water, deferred maintenance and community service challenges confronting the City.”

          3. Rich Rifkin

            David, you are wrong. Jeff explained the matter correctly. If a city had to first cut all of its services (police, fire, parks, janitorial, admin, etc.) and then reach the point where it could not pay its lenders and creditors, then Vallejo, Stockton and San Bernardino could not have filed Chapter 9 bankruptcy.

            If the Davis general fund runs out of money and our obligations are such that we cannot pay our bonded debts and CalPERS and so on without gutting city services, we could file Chapter 9. The problem is, that is a very costly route, too. It will take hundreds of thousands or millions of dollars in attorney fees to see us through the process. We would be far better off gutting services for a year or two and then adopting new labor deals (imposed if necessary); or perhaps as an interim, we could stop paying all of our OPEB (as San Diego has done); or we could declare a fiscal emergency and change the problematic contracts that way.

            Because, as you note, bonded indebtedness is not our primary problem, filking bankruptcy is not what Davis needs to do. But make no mistake, if the general fund runs out of money, we will be EFFECTIVELY bankrupt, if not LEGALLY so. And at that point, we have options beside Chapter 9.

          4. David Greenwald

            ” If a city had to first cut all of its services (police, fire, parks, janitorial, admin, etc.) and then reach the point where it could not pay its lenders and creditors, then Vallejo, Stockton and San Bernardino could not have filed Chapter 9 bankruptcy.”

            I believe in those cases, those cities could have cut all of their services and still wouldn’t have been able to pay their obligations.

          5. Rich Rifkin

            That is not even close to being true. Including its debt obligations, Vallejo, for example, was paying 75% of its GF for police and fire (after having closed a fire station and laying off some cops and police admin staff). The question was how much more they would cut without greatly jeopardizing public safety. But had they cut another 30% of their public safety personnel, they could have easily made all their GF bond payments.

    2. Rob Hammond

      Where do you get that compensation rates are going to grow at 2% faster than revenue? Are you talking about total compensation and are we supposed to throw up our arms and eliminate half the remaining city workforce because some short sighted politicians failed to do their jobs over the past 10 years? As far as I know take home pay for most city employees is not increasing at all. Most city employees are paying more for their retirement and medical. Medical after retirement is something I have some concerns about but I hear so many people talking about city employees like they are robbing us blind. What percentage of the employees are fire fighters. They seem to be way over paid and got that way because of the soft spines of people we voted into council. I am outside city hall right now after paying my utility bill. Was the lady who took my check overpaid? I don’t know but all I hear about are the firefighters and management that have gotten huge wage increases. What about everyone else?

      1. Rich Rifkin

        “Where do you get that compensation rates are going to grow at 2% faster than revenue?”

        That is based on the projection that general fund revenues will grow at 2% per year from 2014-15 to 2019-20; while over the same period, the combination of salaries, medical benefits, OPEB funding and pension funding will grow at 4% per year.

        “Are you talking about total compensation.”

        Yes. The majority of total comp is salaries plus overtime. They should not be growing at all, but are. However, the critical problem is with the growth of the other aspects of compensation. They are growing at 10% or more per year. (Pension costs are increasing faster than medical/OPEB.) Under the current contracts, half of the inflation of medical will be borne by the employees. Some of the pension increases will also be borne by the employees. So when those parts are taken out, the total comp rate ends up growing about twice as fast as new revenues come in.

        “Are we supposed to throw up our arms and eliminate half the remaining city workforce because some short sighted politicians failed to do their jobs over the past 10 years?”

        No. I hope we won’t eliminate any services. I do favor outsourcing some which can be done as well or better by outside agencies or private contractors for less money. We can save all the rest of the jobs by capping the amount the city pays in total compensation. In other words, tell an employee whose total comp is $100,000 per year that the following year he can make $102,000 (if revenues grow only by 2%). The employee (or his bargaining unit) should then decide what share of that he wants in salary, pension, OPEB, medical, etc.

        It is presently being taken as a given that none of this can be done on time because the contracts do not expire until 12-31-15, and before that date the general fund goes into the red. (That is the point we are effectively, if not literally, bankrupt.) Yet if the sales tax hike fails to pass–I expect it will pass–the city can declare a state of fiscal emergency, and it can then unilaterally impose the terms it needs to impose in order to maintain all existing services.

        For more information on a declaration of a fiscal emergency, see this document: http://www.publiclawgroup.com/wp-content/uploads/2011/12/Declarations-of-Fiscal-Emergency.pdf

  2. Davis Progressive

    “Mayor Krovoza expressed gratitude that Mr. Pinkerton will stay on with the City until the end of April to ensure a smooth and effective transition.”

    gratitude that pinkerton is doing mostly what he’s obligated to do in the contract – stay on for two months (i guess technically he’s staying an extra two weeks, but soul-sucking here is obnoxious).

    1. Rich Rifkin

      On Friday, the DCC is meeting in closed session to discuss an interim CM. I would hope that in Pinkerton’s last months on the job, he helps the new person learn the ropes. I would also hope the DCC would ask Steve his views on who among his lieutenants would be our best interim CM.

        1. Rich Rifkin

          I don’t know any of his lieutenants well enough to say who he should favor among them, if he favors any. However, my limited experience with Yvonne Quiring suggests to me that she is a capable person. I know that the union activist employees of Fillmore hated her when she served as the CM of that city. So she has that positive going for her.

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