As most people who have been reading this site know, in the next six months the city of Davis voters face a crucial decision. In June, they will decide whether to support the half-cent sales tax increase and then in November, they will face a still undefined parcel tax.
The sales tax will provide the city with revenue to offset increases to employee pensions and health care costs in the upcoming budgets. The parcel tax, will provide the funding to meet our roads, parks, and other infrastructure needs that have been deferred now for nearly a decade due to the economic collapse and the lack of funding.
Yesterday in commenting on the Chamber of Commerce’s endorsements, we wrote that we were troubled that, while the Chamber came out against Measure P, an easy call for them, they failed to take a position on Measure O. The Chamber has asked a lot from the city in terms of commitment to economic development. The city has for the first time really stepped up, whether it has been the hiring of Rob White, the reestablishment of the Innovation Park Task Force, or the general support for Chamber goals.
The Chamber has asked for fiscal responsibility and the council has delivered with a series of reforms, including the wave of MOUs that set the city on much firmer fiscal ground. After all of that, for the Chamber not to step up and support the sales tax is very disappointing.
Michael Bisch, once on the Chamber PAC would respond, “I don’t know how the Chamber feels about this comment, but I for one am choking and sputtering on it. It’s completely divorced from reality turning the public record on its head. Since the financial meltdown in 07/08, the political leadership has steadfastly refused to take prudent, consequential action to deal with the fiscal tsunami. The political leadership over and over again has refused to implement any serious reform to the way it goes about setting priorities and properly allocating resources to those priorities to ensure they are achieved. The political leadership repeatedly assigns way too many tasks to staff, in an entirely haphazard fashion, so that it’s impossible for staff to complete them. The political leadership to this day agendizes items that, wyile important to certain stakeholders and individuals, does little to further community sustainability in this time of crisis. Interwoven throughout this is the terrible lack of transparency. This all has been brought to the political leadership’s attention over and over again to little or no avail. The response has always been, “We’ve got it covered. We know what we’re doing.””
He continued, “As for economic development, way too little, way too late. Even when projects or policies are pursued, they’re entirely consumed by politics, and again, with zero transparency. Please point me to the thorough, public vetting process for McDonough, the creation of the CIO position, Mace 391, etc., etc. The exact opposite is the case. These were all happening behind closed doors. Nothing against McDonough, but I fail to recall any careful weighing of the best use of these economic development dollars/assets. The same is true of the CIO position and Mace 391 decision. For all I know, these decisions were the best use of these dollars/assets, but if so, it was by pure chance because no analysis was ever done as far as I know.”
He added, “Let’s be clear on what economic development is and what it’s not: “Economic development is the sustained, concerted actions of policy makers and communities that promote the standard of living and economic health of a specific area.” –Wikipedia.”
He concluded, “Does that sound like what is being practiced in Davis? I think not.”
Had Mr. Bisch made this argument in 2010, I would have completely agreed with him. Not only did the Council in 2009-10 fail to gain traction on the much needed structural reforms, but they spun it as progress.
To understand the problem, I can simply pull from a January 13, 2010 column entitled, “Council Majority in Need of a Math Lesson on MOU.”
Four years years ago, I wrote: “Last night the Davis City Council ratified yet another MOU by a 3-2 vote with Councilmember Sue Greenwald and Lamar Heystek dissenting. The contract with the management group was a small step forward over the firefighters’ contract, however, on the whole it fails to deal with the most serious structural issues in a meaningful and sustainable way.”
I continue: “The discussion on Tuesday was particularly enlightening, as the Council Majority essentially made three points. First they argued that this contract represents a savings of $744,000. Second, they argued that, while not as much as they might have liked, this contract marks the first time that the council has decreased the size of contracts. Finally, they argue that this contract begins to deal with the structural issues.”
The problem was that they were using “phony math” to spin the savings. In essence, the council factored the savings not using the 2009 budget as the baseline but rather projecting the future MOU into the future and calculating the savings by continuing previous pay increases.
So Councilmember Stephen Souza justified his math as follows: “This is a $744,000 savings over what people are being paid right now. What they’re being paid in the baseline in salary and all-funds benefits this is a savings of $744,000, that’s the math I was taught in school. And that’s the math that I see when you add the numbers up. Calculating what is being paid on an annual cost this year, or salary from last year, if you look at 08-09, it was $8,638,000. You multiply that times three you end up with $26,414,000. If you take the contract, all funds, in this MOU, you have $25,670,000. That is a savings of all funds of $744,000. I think that’s all funds that we’re talking about, not just salaries.”
As I noted at the time: “The math I learned in school tells me that $8,638,000 multiplied by three is not $26,414,000, rather it is $25,914,000. You subtract this MOU from that and you end up with $244,000 in real savings over the next three years, not $744,000.”
That council had refused to bring in outside negotiators by a 3-2 vote, with Sue Greenwald and Lamar Heystek dissenting, and the result was a series of MOUs that did not deal with the key planks: PERS, OPEB and cafeteria cash-outs.
The council had to play catch up on this and many other policies including the council’s mechanism for balancing the budget from 2008-2011 which included attrition and failure to fund infrastructure needs.
So in 2011, the council would attempt to deal with roads, OPEB, and pension cost increases by cutting $2.5 million from employee compensation. They passed that by a 3-2 vote with 150 employees in the audience in a room that must have been at least 90 degrees. Ultimately, those cuts would never be implemented.
In 2012-13, the council got the agreement of five bargaining units on a cuts package that included measures that the city finally able to pass that it really needed to do three years earlier. They addressed the issues of retirement benefits, created a second tier for new employees, reduced the cafeteria cash-out from $1500 per month as a maximum down to $500 per month, reduced the costs of retiree medical benefits, and increased the employee contribution for pensions.
In 2013, the council finally got a comprehensive roads report and had to deal with the reality of the city’s roads.
“We knew at the time it was a very difficult vote to basically move $1 million into the roads and $200,000 into the bike paths,” Mayor Pro Tem Dan Wolk said at the time. “That was a difficult vote and we knew at the time… that that really wasn’t going to solve the problem by any means.”
“But seeing this report shows you how really a drop in the bucket it really is,” he said. “It’s very daunting and sobering to realize and think about where we’re going to find this $150 million.”
Then there was Councilmember Brett Lee said in response to the roads report in 2013, “I must admit I was surprised and also saddened by it. We come to this job and we know we have to make hard decisions and I was thinking we would get the labor in order, we’re going to do certain things and then it’s the nice time when we get to make the parks nice and keep the pools open longer and this is like a bucket of cold water.”
Could the city have gone further on cuts this last round of MOUs? Perhaps, but the reality is that with what they asked for, two bargaining units held out and had to have terms and conditions imposed. Would seven bargaining units holding out have been politically feasible?
The cuts are ugly without the tax measure. The Chamber PAC is supporting incumbent Rochelle Swanson, and challengers Robb Davis and Daniel Parrella for the two seats. Each of them have supported Measure O. Is it fair for the Chamber to support candidates and make their first official action be draconian cuts that strafe city services?
Mr. Bisch argues that the city has not done enough for Economic Development. That is a reasonable point. But in recent years, the city has upped its game. The hire of a Chief Innovation Officer, the re-commitment to economic development, and putting itself on the map last year at Cap to Cap have pushed efforts forward.
Mr. Bisch cites the procedural failures that doomed Mace 391 as proof-positive that the city’s economic development program is not ready for prime time.
Our view is more nuanced. Even if the council had approved Mace 391, it was still looking at a Measure R and with an organized interest pushing back for a conservation easement that would have made Mace 391 dicey.
However, the discussion on Mace 391 galvanized community discussion and put subsequent projects on the radar that could gain voter approval. The door is open to a business park on Mace 200, work is proceeding on a Hotel Conference center that could add half a million in revenue, Nishi and the Gateway project open the doors potentially to other economic development.
It is understandable that the Chamber lacks patience, but the city also has to deal with a population base that is reluctant to support peripheral growth. Changing the mindset will take time.
In the meantime, it seems odd that the Chamber would want to sabotage the city’s current efforts to both make the budget sustainable short and long term by forcing cuts that would strafe city services and bring economic development efforts to a halt.
From that perspective it seems that the Chamber’s failure to support Measure O may be akin to cutting off its own nose to spite its face.
—David M. Greenwald reporting