Last week, the council candidates were asked what choices by the Davis City Council put the city into the position it’s in. There is the tendency to blame the decline of the national economy. However, that misses the key context that in 2007 and 2008, before the collapse of the economy, there was an active debate over whether benefit levels, especially PERS and OPEB, were sustainable. As one observer noted at the time, “3% at 50 is in my opinion an unsustainable pension benefit. It threatens to undermine the pension system for everyone else in public service.”
That warning would prove to be true. The collapse of the national economy should not be seen as the cause, but rather the catalyst for the city crisis.
What follows is a comprehensive look at critical dates and decisions that either contributed to the crisis or sought to extricate the city from that crisis.
May 22, 1999 – City implements four on an engine
Julie Partansky, Stan Forbes, Ken Wagstaff, Susie Boyd, and Sheryl Freeman voted unanimously to hire six additional firefighters and put four firefighters on every engine.
November 15, 2000 – Council Votes to implement 3% at 50
City Council, comprised of Susie Boyd, Sheryl Freeman, Sue Greenwald, Michael Harrington and Mayor Ken Wagstaff and led by Interim City Manager Jeanie Hippler, who took over for John Meyer, would approve a contract amendment to grant the firefighters 3% at 50 pension compensation.
March 2004 – Voters Approve Measure P, Half-Cent Sales Tax
According to the staff report, the tax would generate $2.9 million in annual revenues, which represents around 8% of the City’s overall General Fund Revenues. Supervisor Helen Thomson and Mayor Susie Boyd argued, ““The City faces increasing costs. We will face higher expenditures if we are to provide the additional police protection and meet park and recreation and open space commitments we have made to our citizens.” They added, “Without Measure P revenue, given the uncertain state support to the General Fund, we would be faced with very deep service cuts in police, fire, and parks.”
2005-2006 – Council Gives Bargaining Groups Large Salary Increases
The firefighters in 2005 agreed to a four-year MOU that would give them salary increases starting on June 20, 2005 of: 10% in 2005, 8% in 2006, 8% in 2007, and 6% in 2008 before expiring June 30, 2009. All told, their salaries increased 36% over a four-year period. Police received smaller increases starting in 2006-07 fiscal year of 6%, 3%, 4% and 3% for a total of 16% pay increase. Other bargaining units received between a 15 and 20 percent pay increase a year after council put the tax measure on the ballot.
2008 – Council Election
Don Saylor and Stephen Souza ran for reelection on the basis that the budget is balanced with a 15% reserve. Sue Greenwald countered, “Our revenues have increased a healthy 60 percent in seven years. Our problem is that expenditures have risen faster.” She added, “We’re not in better shape than we’ve been in years. That’s just not true. We are locked into a 3% at 50 retirement for the next 70 years for public safety employees and now 2.5% at 55, early retirement for all miscellaneous employees. That’s got to affect our longterm budget situation. We have a $42 million post-retirement, unfunded employee retiree health liability. That’s huge. That’s coming due in only 15 or 20 years…” As one observer noted at the time, “3% at 50 is in my opinion an unsustainable pension benefit. It threatens to undermine the pension system for everyone else in public service.” Don Saylor and Stephen Souza backed by the firefighters along win reelection with Sue Greenwald.
June 30, 2008 – Grand Jury Report on the Firefighters
The Grand Jury found the following after an extensive two-year investigation: “Misuse of a DFD facility; inappropriate relationships between the Union’s Board of Directors and DFD management; and inconsistencies in promotional opportunities.” The most explosive of these complaints were that firefighters were getting drunk in downtown Davis and sleeping it off at the fire station. By July 14, 2008, the city would name Police Ombudsman Bob Aaronson as Independent Investigator.
September 15, 2008 – Lehman Brothers File for Chapter 11 Bankruptcy
The filing remains the largest bankruptcy filing in US history, the entire western financial system nearly collapses and the US moves into its deepest and longest lasting recession since the Great Depression.
November 11, 2008 – City Manager Memo Warns That City Projects Revenue Shortfall
City Manager Bill Emlen in his first memo established five cost control measures for the remainder of 2008-09 fiscal year: hiring freeze, monitoring overtime use, controls on travel reimbursement, all services not currently under contract to be approved by city manager, and limitations on non-essential discretionary spending.
December 9, 2008 – City Reports a $1.2 million budget deficit
The economic crisis deepened and Davis faced a $1.2 million budget deficit for 2008-09 and a $3 million budget deficit for the following year. Paul Navazio, the city’s finance director, believed time cost savings could save up to $900,000 which would require the city to eat up to $330,000 from their reserves.
December 10, 2008 – Council “Votes” 3-2 Not to Read the Full Independent Report on Fire Department
Both councilmembers Sue Greenwald and Lamar Heystek were adamant about seeing the full version. Councilmember Greenwald: “I’d like to get a council consensus that we have access to all the information. The way our form of government works is that we’re responsible when we’re elected. Whereas on the phone you told me that we’re not responsible for personnel, we are ultimately, the buck stops with us. We’re responsible through you, but we can’t evaluate how well you’re doing your job with personnel if we don’t have access to all the information.” She continued: “I just think we should as a matter of principle, as a matter of procedure. It’s a matter of accountability in government.” Councilmember Heystek requested of City Attorney Harriet Steiner that she explain any legal grounds for withholding of information from the council in writing. “I do agree with Councilmember Greenwald, it is important for us to see the work product of the Ombudsman, this is the first major test of our Ombudsman and we’ve paid over $35,000 I believe for this work product, and I believe I deserve to see as a councilmember the contents. No one is wanting to pry or to be nosy, I think we want to know the quality of the report. It is important that we have the fullest context possible to be able to make decisions or give direction. I’m equally interested in hearing what the city manager’s interpretation of the findings are. But if there is some legal grounds by which we cannot view this information or not be privy to the report that was prepared at our behest, I would like to see a justification of that in writing. I really believe that as a councilmember I need to know why it is that information is being withheld from me and in writing.” However, both Mayor Pro Tem Don Saylor and Councilmember Stephen Souza disagreed. “I think that it’s reasonable to make another point of view known here. That is to the degree that materials and information comes to the City Manager that is personnel related, we don’t look at the personnel files of every employee in the city.” Councilmember Stephen Souza agreed. “I don’t need all fifty pages, I just don’t.”
January 13, 2009 – City Faces Crisis of Unmet Needs
City staff: “While the growing list of unmet needs – both one-time and recurring – remains a significant concern, current economic and budgetary realities suggest that emphasis should be placed on securing existing revenues over seeking new revenue sources that could, potentially, jeopardize revenues relied upon to provide existing City services.”
January 14, 2009 – City Manager and Investigator Disagree on Substance and Tone of Findings
The Davis City Council very late on Tuesday night and early on Wednesday morning finally got to ask key questions of investigator Bob Aaronson, who was charged with the duty of conducting an independent investigation into a series of findings by the Yolo County Grand Jury that was released in June. The hearing did not begin until 12:30 am. Bob Aaronson disagreed with the findings in a nuanced way upon questioning, which meant that the city council was left reading a redacted report and the public was left to read only the city manager’s summary of the issue. As Mr. Aaronson put it at the onset: “Bill is sort of a glass half full sort of guy when it comes to city operations, it’s my impression, and I tend to a glass half empty sort of guy.” It would not be until four and a half years later that the public got to read the report.
March 10, 2009 – Street Maintenance Report to Council
In a budget report, street maintenance was currently being funded at a traditional $800,000 baseline level. Finance Director Paul Navazio stated, “The current funding level is insufficient and it leads to the deterioration of street conditions.” The funding to address the current backlog would require an increase to $2.8 million per year, and full funding to maintain the desired pavement index is in excess of $3 million per year.
June 9, 2009 – Councilmember Lamar Heystek Proposes an Alternative Budget
During the Davis City Council meeting, Councilmember Lamar Heystek, instead of merely opposing the current proposals laid out by finance director Paul Navazio boldly proposed his own alternative. There are two key planks to the alternative budget as laid forth by Mr. Heystek. First, the belief that the current 850,000 dollar reduction in salary compensation, which represented perhaps a little over 3% of their total budget, was insufficient. Councilmember Heystek instead proposed a 5% reduction in total compensation for employees. Second, $1.5 million in savings was wrapped up in the tier reductions, which were basically the cutting of programs and service to the public. Mr. Heystek’s budget began to address these cuts, removing some of them from the cut list.
June 16, 2009 – The Apology: Citygate Scrubs the Deck on Fire Staffing Issue
The city uses a $15,000 study to justify current staffing levels and support the implementation of a battalion chief model. In addition, the study recommended against a fourth fire station and instead recommended joint operations with the UC Davis fire department. They also recommended an expansion of the response time.
June 23, 2009 – Council Fails to Deal With Structural Issues As Budget Pictures Comes Into Focus
While the efforts of Councilmember Lamar Heystek to introduce an alternative budget two weeks prior gained some concessions from the council majority, Councilmember Heystek and Councilmember Sue Greenwald found themselves on the short of end of 3-2 votes on the key issues. The bottom line was the failure of the Davis City Council to adequately address the looming structural issues of employee compensation at this meeting. The short-term budget remained to be balanced through cutbacks to programs rather than changes to the way the city funds employee compensation.
December 12, 2009 – City and Firefighter Local Reach Agreement on New Contract
The city of Davis announced that the city had reached a tentative agreement on a three-year labor contract with the firefighters’ union, Local 3494. The proposed contract was on the city council’s agenda for ratification on December 15. The contract included a decrease in salary over the next three years, including a 6% decrease over the REMAINDER of the current fiscal year, with, in July of 2010, the salaries to be reduced by 4% over the current salary and, in July 2011, a 3% reduction from current salaries. Vanguard analysis determined the contract fell well short of the savings needed and allowed for no period for public vetting.
December 16, 2009 – Mayor and Council Cut Off Debate on Fire Contract
Councilmember Sue Greenwald, while pressing on the failure of the firefighters’ contract to address the city’s structural problem, was cut off in debate. In a heated discussion, Councilmember Sue Greenwald pressed the finance director to explain where the inflated savings figures came from. During the course of that discussion, Councilmember Greenwald demonstrated that the level of savings was actually considerably less in year three than the 3.6 percent trumpeted by city staff. The council voted 3-2, with Councilmembers Greenwald and Lamar Heystek dissenting, to pass the contract.
December 18, 2009 – Councilmember Heystek Speaks Out About Fire Contract
The Vanguard’s phone interview with Councilmember Lamar Heystek on the 3-2 vote that passed the fire MOU. Mr. Heystek told the Vanguard, “The biggest problem that I have with the contract is that it does very little to address our structural challenges in any meaningful way and it sets the tone for the contracts that we are poised to consider and adopt in the very near future.”
January 13, 2010 – Council Majority in Need of a Math Lesson on MOU
There was the use of new math as the council majority again attempted to justify another passage of an MOU by a 3-2 vote, again with Councilmembers Greenwald and Heystek dissenting. 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 argued that this contract began to deal with the structural issues.
February 27, 2010 – Vanguard Firefighter Brochure Hits Davis Mailboxes
The Vanguard mailed out a brochure that informed citizens about issues involving the Davis Fire Department and the fiscal challenges facing the city as a the result of overly generous fire contracts and the purchase of influence by the Davis Firefighters Union, Local 3499. Click here to see the brochure.
May 25, 2010 – Council Votes to Impose Impasse on DCEA
The Davis City Council voted unanimously Tuesday night to impose the City’s last, best and final offer to the city’s largest bargaining unit, the Davis City Employee’s Association (DCEA). Dozens of the members of DCEA showed up at the council meeting, there were accusations leveled toward the city about unfair labor practices, and accusations leveled that the city was bent on imposing this. From the city’s perspective, DCEA was simply unwilling to go to the bargaining table and negotiate in good faith. However, the city failed to follow proper procedures and the imposition was overturned in late 2011.
June 8, 2010 – Joe Krovoza and Rochelle Swanson Elected To The Davis City Council
Joe Krovoza and Rochelle Swanson were elected to council, pledging fiscal reform and independence, having not accepted firefighter money.
February 23, 2011 – Dan Wolk Chosen to Fill Council Vacancy
Don Saylor spent six months as mayor of Davis. He was elected to the Yolo County Board of Supervisors in June 2010 and resigned from the council in January to take that seat. The council acted quickly to fill the vacancy, ultimately appointing Dan Wolk to fill the seat.
June 28, 2011 – Council Passes Historic Budget, Sets Aside $2.5 Million in Personnel Costs to Put Towards Roads and Unfunded Liabilities
Council had to stare down, the week before, 150 employees in a stifling 90-degree council chambers. Stephen Souza and Sue Greenwald argued against the sweeping reforms. Stephen Souza was arguing that the city council was going about this budget in the wrong way. He argued against restoring the reserve immediately. He argued that he wanted the entire community involved in the process – but those in the room and those not in the room. In a theme of his for the day, he argued that the process “just doesn’t feel right” and he said that he wanted to “do it in a way that we can feel good about it at the end of the day.” Sue Greenwald said that it needs to be coordinated with the labor contracts situation. “We need to make these cuts, but the process and timing is everything,” she said. She added, “If we implement this tonight, we are on a course of layoffs, mass layoffs.” Ultimately, they would not prevail. However, the cuts were not implemented.
July 26, 2011 – Davis Hires Steve Pinkerton as new City Manager
Manteca’s City Manager Steve Pinkerton was unanimously selected by the Davis City Council in closed session, and his first meeting would be the infamous September 6, 2011 in which the water project was approved at 3 am, only to be rescinded two months later.
September 27, 2011 – Unfunded Liabilities Workshop
City Manager Pinkerton laid out underfunded elements of the budget including at that time Pensions ($1 million), OPEB ($2.4 million), Street Maintenance $2.5 million, Sidewalks $430,000; Parks facilities and City facilities. They also set a framework for implementing the $2.5 million in budget savings, however, this was never implemented.
November 3, 2011 – PERB to Disallow Davis Imposition of Impasse on DCEA and Orders Backpay for Employees
In a tentative ruling handed down by the Public Employment Relations Board, they ruled that the city improperly canceled fact-finding and imposed the last, best and final offer on DCEA. PERB ruled: “It has been found that the City violated MMBA sections 3503, 3505, 3506, and 3509(b) and PERB Regulation 32603(a), (b), (c), and (g) when it passed Resolution 10-070 on May 25, 2010, before exhausting the fact-finding process set forth in its local rules. They continued: “It is therefore appropriate to order the City to cease and desist from such activities in the future. Additionally, if the City wants to proceed through its impasse procedures, it must provide adequate time to complete the fact-finding process as set forth in its local rules.”
May 21, 2012 – Vanguard Obtains Critical New Portions of Davis Fire Department Investigation in Settlement with City
The Vanguard sued the city of Davis to release the 2008 Fire Staffing Report by Bob Aaronson after nearly three and a half years. The City of Davis had been unlawfully withholding records that should have long before been made public, exposing the depths of their collusion with the firefighters’ union to suppress damaging portions of the Davis Fire Department Investigation written by the city’s Ombudsman Robert Aaronson in response to findings in the 2008 Yolo County Grand Jury Report. In newly-released segments of a 2008 report, the Vanguard has learned that Bobby Weist, the long-time union president and arguably one of the most powerful public figures in city government, received preferential treatment in his 2007 promotion to fire captain. In April of 2007, then Chief Rose Conroy of the Davis Fire Department promoted Mr. Weist, over “at least one of the candidates [who] was demonstrably and significantly more qualified for and deserving of the promotion than [Bobby Weist] promoted by Chief Conroy.”
June 5, 2012 – Lucas Frerichs and Brett Lee in, Souza and Greenwald Out; Wolk Finishes First
Voters apparently had enough of the incumbents, voting challengers Lucas Frerichs and Brett Lee into office, while voting out three-term councilmember Sue Greenwald and two-term councilmember Stephen Souza.
June 7, 2012 – City Issues Layoff Notices to Nine Employees
The day after the election, the city laid down the first gauntlet in what has been described by both sides as increasingly contentious discussion on new labor contracts across the board. The layoffs involved nine positions within DCEA (Davis City Employee’s Association), the bargaining unit that the city originally declared impasse on in the winter of 2010 but had that impasse overturned by a state board (PERB) the previous November. The firing triggered angry responses in the community after tree trimmers were laid off and replaced with contract employees.
November 13, 2012 – Fire Audit
Interim Fire Chief Scott Kenley presented the fire audit to council.
December 14, 2012 – City Reaches Agreement with Three Bargaining Units
The city, in announcing agreement with DPOA (Davis Police Officers Association), Management and PASEA (Program, Administrative and Support Employees Association) has reached agreement with five of the seven bargaining units. The contracts dealt with exploring a second tier benefit, employees to pick up their full PERS share by 2014, and a larger pick up of retiree medical by employees, reduction of cafeteria cash out.
December 18, 2012 – Fire Audit Recommendations
Interim Fire Chief Scott Kenley presented the fire audit to council. Union President Bobby Weist misled the council, stating that the firefighters had not been not involved in process.
January 29, 2013 – Fire Round Table
The fire audit recommendations were reviewed in great detail by the city council. In an unprecedented move, the city council literally sat at the table with the fire union to discuss the findings. The fire union demonstrated an incredible lack of respect for council and city staff while objecting to every single recommendation in the report. The city would meet again in March 5, 2013. Ultimately, all of the report’s recommendations were approved.
February 5, 2013 – Council Stunned by Magnitude of Road Problem
The council would learn that years of spending almost no general fund money on roads meant huge deferred maintenance costs. At current levels of funding, half the streets would fail by 2032 and costs would increase to over $400 million. To bring the PCI to 70, the city would have to pay $8 million per year. Mayor Pro Tem Dan Wolk felt like, and quite reasonably, that he had already cast one tough vote on this. “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,” he said. “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 who said, “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.” “But it’s the reality that we’re faced with,” he said.
April 30, 2013 – Fire staffing Reduced to 11
In a 3-2 vote with Brett Lee, Joe Krovoza and Rochelle Swanson voting in the majority and Lucas Frerichs and Dan Wolk dissenting, the city council voted to reduce overall staffing to 11 firefighters on duty.
June 21, 2013 – City Releases Full Unredacted Fire Report After Four and a Half Years
On Wednesday morning Judge Dan Maguire issued a tentative ruling, ruling that former Davis Fire Chief Rose Conroy’s request for a preliminary injunction was denied on the grounds that she had not been able “to demonstrate that she is likely to prevail on the merits of her claims at trial.” Newly released were rants by the former fire chief Rose Conroy, who stated, “From my perspective, the people that are – that have gripes and things like, that are the people that are narcissistic. That it’s about them and they don’t like it if it’s not about them and they don’t look good in front of other people …. The problem employees are the employees who don’t get their way …. These others are people that don’t fit well in a team game.”
June 26, 2013 – New Structural Deficit for City of Davis
As Davis passed the 2013-2014 budget, the city reported it will end the year with a negative cash flow of $1.62 million, but the real problems would start the next year when the city’s deficit would balloon to $3.77 million. From 2012-13 to 2017-18, revenues grew from $41.55 million out to $45.19 million. The problem is that costs increased from $41.7 million that year out to $50.14 million by 2017-18. By the end of this five-year period, the yearly deficit was expected to hit $5 million, with the overall deficit over the entire period at $15 million. “We have an uphill battle in the future if we want to balance our budget and address our unmet needs,” City Manager Steve Pinkerton told the council. “It’s frankly not incredibly difficult to balance the budget if you’re putting off costs into the future.” The idea was floated to look into new revenue sources, but not addressed again until December.
November 19, 2013 – Last, Best and Final Offer to DCEA
The Davis City Council unanimously voted to impose the last, best, and final officer on DCEA. This left firefighters as the last unresolved contracted group.
November 26, 2013 – Two Attempt to Fire City Manager Pinkerton
We learned that there was an active effort underway to terminate the contract of City Manager Steve Pinkerton before the December 1 deadline, after which would enable him to receive nine months of severance for early termination. Council called a special closed session meeting two days prior to Thanksgiving; however, they emerged with no reportable action.
December 3, 2013 – Council Approves Shared Management
The Davis City Council addressed some of the concerns from the firefighters and their fellow councilmembers about the language in the JPA agreement, including getting rid of all reference to the term, Joint Powers Agreement itself in an effort to assuage concerns about the process. Despite their efforts to address his concerns, Mayor Pro Tem Dan Wolk went from supporting the proposed Shared Management Model in October to opposing it on Tuesday. Lucas Frerichs remained in opposition. Two weeks before, the council received a letter from Senator Lois Wolk, Assemblymember Mariko Yamada, Supervisors Don Saylor and Jim Provenza and former Supervisor Helen Thomson that urged “the Davis City Council to take another look at the serious long-range consequences of this proposal before contracting out any of these core municipal functions. There is a key difference between sharing or coordinating services and merging governance with the constitutionally separate and unelected Regents and Chancellor.”
December 18, 2013 – Council Imposes Contract on Firefighters
All of the city’s bargaining groups are under the new terms and conditions. It took a year and a half from the expiration of the old contracts on June 30, but finally the council imposed the last, best, and final offer on DCEA and last night, they voted to do the same with fire. Both votes were 5-0. Mr. Yeung noted that the firefighters were unwilling to go there or consider any second-tier benefit, so “without that savings we couldn’t fund the pay increases for the other parts of the of the deal.” Speaking during public comment, union president Bobby Weist told the council that the firefighters’ union is very “disappointed in the factfinder’s decision.”
December 18, 2013 – City Braces For New $5.1 Million Structural Deficit
The city will look to revenue measure in June, City Manager Steve Pinkerton reported in his 2014-15 Budget Preview. He said that the city will be facing a new “a structural imbalance of up to $5.1 million in the General Fund.” “Difficult decisions are ahead concerning how to balance funding ongoing programs vis-à-vis service-level expectations in the community,” he writes. “Davis is justly proud of the amenities it offers to residents. However, expenditures continue to grow faster than revenues, despite all the changes the City has made to date.” He argued, “Largely these increases are outside the City’s control. This funding gap makes it difficult to continue to provide the current level of services to residents.”
February 11, 2014 – Council Puts Half-Cent Sales Tax on Ballot in June
The item did not end until well after 1 am on Wednesday morning. Just as it appeared that the council had an agreement, they decided to take one last break to think about it. When they returned, Lucas Frerichs announced that they had decided to go back to a half-cent sales tax from the three-quarters that had been recommended by a focus group and that had seemed to be a consensus moments earlier. The measure would set the sales tax rate at 8.5% for six years. The term would mean that the previous tax measure, renewed in 2010, would no longer sunset in 2016, but would rather extend until 2020 with the rest of the ordinance. Click here to see the list of programs the tax addresses.
February 12, 2014 – Pinkerton Agrees to Terms with Incline Village
City Manager Steve Pinkerton and the Incline Village Board of Trustees have agreed to a negotiated employment agreement. It was announced his final day with the city of Davis would be April 25, 2014. The city council hired Gene Rogers as interim until they can find a permanent city manager.