Last week, the League of Women Voters held a candidate’s forum. Rochelle Swanson was unable to attend due to her obligations at Cap-to-Cap. Last week, we covered the League questions, today we will cover a select few from the audience.
Question 1: Do you support the proposal for a city owned energy program to replace PG&E?
Daniel Parrella: “No, I don’t support the current plan the books. I don’t think that the Davis Municipal Utility Division is a realistic plan right now, there’s just too many political realities in the way.” He cited general opposition for “the $600,000 loan from that wastewater fund the general fund at this time.” He supports public power in the long run as a good idea for the city. “I look at what Marin County and Sonoma County have done with their community choice aggregation program. I think it’s far more politically realistic. They have modest savings.” He added, “The difference primarily between the DMUD and the CCA is that while DMUD requires us to buy out PG&E its entirety with the community choice aggregation PG&E retains the transmission infrastructure. We essentially just pay them to use their lines to distribute the power through. I think it’s a better way to go right now and I think that the $6000 loan, it really hurt the public trust which I’ve been talking about, it did more to harm than good.”
John Munn: “If we were going to in the future consider a public electric utility, I’d want to know that it was going to be as reliable as what we have or better, and that the rates would be competitive or lower than what we have.” He said, “So reliability and competitiveness are two of the keys for the city ever even thinking about this. I do have a concern on the current the proposal that the availability of lower-cost power just doesn’t seem to be out there. Where are we going to get hydroelectric power. Some of the lower-cost power is nuclear power, of course that’s not in great political favor and it may cost more in the long run. But it’s certainly not available to us either. Maybe some of the gas generator power iss less expensive at this point. Have to investigate that. But, for the most part the sources of power that are available are more expensive.”
Sheila Allen: “I think now is not the time to move forward with this plan. I do in the long run the long run agree that it would be great to investigate local public utility. The concern that I have is the spending the funds at this time.” She added, “$600,000 has been a decision that has been made by the city council, so I think it’s very important that we as a community and hopefully me as a city councilmember, make sure that that money that was spent was spent well and that the information that we received from it will be best utilized going forward. I’m also one other interesting thing about it is I’m very interest in a diversified power source and perhaps we can work with PG&E to try to reach that goal.”
Robb Davis: “It’s clear that widely dispersed production and transmission of electricity is our future, with local control. Why, because we need to build resilient energy systems. Large investor owned utilities is a model of the past. It does not create resilience, and it doesn’t create lower costs.” He continued, “How we get there is the question. When we begin to walk is the question. I don’t know how we’re going to get there. I don’t know if anybody does.” He added, “We have people in this city who have the knowledge and experience and desire to help trace out an innovative approach that maybe we can’t even imagine yet. There’s no reason to wait because these people are willing to give us their time for free. These are not just willing citizens these are experts in the field. The time to start talking about what the collective future looks like is today and we can do it because we have willing citizens who will step up and provided it low or no cost.”
Question 2: Aside from overconfidence in the national economy, what choices by the school board and the city Council and put this in the red now? Have there been any misplaced priorities?
John Munn: “It’s really primarily choices that were made for employee compensation and benefits that are now growing really out of the city’s control as CalPERS is trying to recover some of their investment dollars that they think they’re going to need in the future to pay for the retirements in the system right now and the fact that the city offers very generous health care benefits and has to pay for that. Those costs keep going up every year.” He stated, “Most of the money for Measure O is going to be used in order to support the increased health care and pension costs that have come to the city since their last budget cycle.” He continued, “Really its health care and pension costs that are driving us into the red.”
Sheila Allen: She stated that the school district is not in the red and “it never was in the red. There was a high potential for it to go in the red, but because of the careful planning that we had as a team, with our administration and with the school board, we were able to stay in the black the entire time.” She continued, “I don’t think anyone in this room or anybody who was sitting up here on the city council or the school board knew about the world-wide economic collapse.” She stated, “There were compensation decisions that were made in a different environment than what we are currently in, that’s a difficult thing to pull back from. It’s something that can and had to be done going forward.” She argued that if we had a single-payer universal health care system, we would have much more money that we could spend on health care.
Robb Davis: “I think not focusing on maintaining the infrastructure that we build is a serious problem.” He continued, “It’s just a responsible of us. I think we think we have to fix that.” On pensions he stated, “Yes we know that there was too much generosity. I think the thing that frustrates me is that it didn’t take, one of the most studied things in economics is the business cycle. We know that not putting money away in good years will come back and bite us. We didn’t do that. We can’t do that going forward. We need to recognize that there will be ups and downs and the sustainability that we need to achieve needs to account for those realities.”
Daniel Parrella: “I will say with unfunded liabilities it’s clear that what you don’t know can hurt you. I think I that one of the candidates mentioned the economic recession is a big part of it. I don’t think it had anything to do with it, quite honestly.” He stated, “We were floating in money in the early 2000s, yet there was a city council there spending just over million dollars on roads.” He stated, “Obviously it was a matter of misplaced priorities but what happens with the roads in particular there was over a decade – I’ll say from 2001 to 2011 we only spent about $12 million and realistically we should have been spending about $60 million.” He noted that we didn’t know the backlog until 2012. He added, “We have other unfunded liabilities like parks, storm water, fleet replacement, pools, that just like roads, we have no idea.”
Question 3: How do you feel about outsourcing city services as an approach to reduce staff compensation costs?
Sheila Allen: “In general I am not supporter of outsourcing city services. There are some public goods that should be provided by public employees, that being said depending on – I would look at each issue on a case-by-case basis so there may be a limited role for some outsourcing.”
Robb Davis: “I think outsourcing – and I say this unfortunately – I think it has to be on the table. But I don’t believe it’s a talisman. It’s not a panacea that’s going to solve our problems.” He said, the big problem with outsourcing “has to do with quality of work, ownership.” He added, “Talk to our city employees, they’re owners, they’re stakeholders, they take pride in their work.” “So I will put it on the table, but I want to make sure that we have quality assessment in place for every outsourced job, so that we can compare the quality of the work pre and post, and be honest with ourselves if we’re not achieving the quality and go back to city employees if we need to.”
Daniel Perrella: “As a general rule, not an overwhelming fan of outsourcing. The reason for that is looking back at the last labor negotiations; we got five out of the seven employee groups to sit down with us, sign contracts with us. We negotiated in good faith and came to an amiable solution.” He continued, “If we sign labor negotiations with these groups and then go all grim-reaper on the rank and file, and lay them off in droves, and bring in private contractors in order to do the work for them, they will no longer negotiate with us in good faith.” He noted going forward, “we have to have good working relations with employee groups.” He said the idea of laying off employees and bringing in private contractors, “I think does more harm than good.”
John Munn: “Everything needs to be on the table when we can’t pay our bills. At that point in time, I think we’re in a pretty strong negotiating position, actually. Perhaps the public employees will be more willing to negotiate if they think someone else might end up doing their jobs because the money is just not there to keep going the direction we are.” He added, “I don’t think any of us like the idea of laying people off and going to outsourcing as concept, but as an economic reality we can’t ignore it.”
Question 4: Over the last five years, city employee head count has been reduced twenty-two percent, 102 employees, but expenses have increased, why is this true? What would you do as a city councilmember to address this problem?
Robb Davis: “I do want to say that that 22% troubles me, because I’m concerned that we end up with a staff that doesn’t match our service needs. Most of that 22% has been through attrition. Most of it has not been strategic in any way.” He continued, “We’ve talked about the reasons why we can cut 22% and still have cost increases. It’s known – pensions, other post-employee benefits, medical care – the options for bringing it under control are limited.” He added, “We’ll do what we can but we need to acknowledge there’s no single silver bullet that’s going to take care of that reality. Considering how we might grow that revenue is something that needs to part of that conversation.”
Daniel Perrella: “Controlling the labor aspect of that, realistically labor negotiations are the only way to do that. We think we made a lot of success in the last labor negotiation, we reduced the cafeteria cash out from upwards of $1900 down to $500, got them to take a bigger employee share, we defined overtime… all of those in my eyes were fiscally responsible things to do.” He continued, “We have two years left until the labor negotiations begin, and again it’s the same thing. We need to start chipping away at these a little bit more in order to bring costs in line.”
John Munn: The answer is the “increased costs of benefits.” “CalPERS and health organization costs are going up and they’re charging us for it. That is what drives the difference between losing numbers of employees but increasing the total cost of employment.” He continued, “The solution for that… employees are eventually going to have to pay more to access the benefits that the city provides them access to. More revenue is going to help, but we have to be very careful that if we get more revenue that we’re going to constrain its use to pay these costs in a way that we then don’t incur further costs down the road, which means that they have to be directed more towards benefits and less towards salary.”
Sheila Allen: “It’s going to take a fair and balanced approach going forward.” She continued, “The primary reason that our costs have gone up while our employees have gone down, have been out of our control.” We noted that the Finance and Budget commission is “going line by line through the budget.” She added, “Something we haven’t talked about is engaging the other jurisdictions like the county and the state and UC Davis to bring in partners because maybe some of the services that are core services that we want to provide could be a partnered service (that) both sides would share.”
—David M. Greenwald reporting