Vanguard Analysis: Is Measure O in Trouble?


Davis-Mailer-2014b-1Daniel Parrella’s comment at Wednesday night’s forum may emerge as the most prescient and memorable comment from this campaign.

Daniel Parrella said, “In my mind the biggest problem facing the city is public trust. As I’ve been walking precincts no one trusts the government. No one expects them to spend their tax dollars wisely. No one expects them to maintain the roads. No one expects us to fix the greenbelts. Everyone expects the city to continue to grow more expensive.”

And, while Sheila Allen was correct that it is not true that “no one” trusts the government, Daniel Parrella’s point not only stands, but resonates. A number of others who, like Mr. Parrella, have spent considerable time canvassing and talking to the voters have told us that his perception is largely accurate.

This observation by Mr. Parrella and the other canvassers is simply tangible evidence to bolster our concern that Measure O’s campaign message does not match voter concerns. At the forum Daniel Parrella made the argument that he believes Measure O will still pass and is of the belief that any parcel tax in November is the one that is really in trouble.

Part of the Yes On Measure O message is that it is endorsed by a “Coalition We Trust,” but that message is cruelly juxtaposed against Daniel Parrella’s warning. While I may believe that the Davis City Council has taken steps to begin earning back public trust, the failure of the council to properly communicate the fiscal crisis before January has clearly left many citizens caught unaware … and in many cases angry.

And it goes down from there. The school board may have been in a better position of trust, as the point was made by Sheila Allen on Wednesday that the school board has been more transparent in their expenditure of funding than the city – but most of that public trust of the school board went out the window with the mishandling of the volleyball coach situation and the large expenditures of district funds on investigations.

The firefighters have been at the center of many city issues, particularly the 36% rate salary increase following the last sales tax, but also with regard to “3% at 50” enhanced public safety pension benefits and, of course, the “four on an engine” staffing that became almost unique to Davis until it was finally changed by the last council – accompanied by kicking and screaming by current and former government officials.  Many of the disaffected citizens who have talked to the canvassers have pointed at that that kicking and screaming is an example of why they don’t trust the government.

While the council finally did impose terms and conditions on the firefighters, as well as the Davis City Employees Association (DCEA), after going to impasse, we now see in a closed session item that, despite the due diligence on the part of the city negotiating team, staff and council, both bargaining groups have filed unfair labor practice complaints with PERB (Public Employment Relations Board), the body that overturned the last impasse with DCEA.

All of this leads to the question: why would anyone trust the Davis Professional Firefighters Association on city financial matters?  Why is that question relevant to Measure O?  Because the Firefighters are listed prominently in the Yes On Measure O literature as part of the “Coalition We Trust.”

The anger by the voters is understandable, but the Vanguard believes it is also misplaced. The major problems with unsustainable labor contracts go back 10 to 15 years. None of the people responsible for the unsustainable practices are still on the council.

It was only through the accidental innovation of GASB-45 (Governmental Accounting Standards Board, Statement 45) that the city learned that paying retiree health benefits as the bills come due would create a massive liability for the city by 2030 and the city had as much as a $60 million unfunded liability that it would need to address by paying tens of millions of dollars to fund OPEB before 2030.

On Wednesday, one of the candidates tried to argue that the city’s increased pension obligations were out of their hands, but that’s largely untrue. The city made this bed over the last 10 to 15 years by increasing the pension formulas without backfunding the cost increases, by taking on the employee shares of the pensions costs in addition to the city shares, and by failing to start to address this problem in 2009 – by creating a second tier, as well as by making sure that all employees paid their share.

More appalling is the suggestion that the fiscal crisis was simply a function of the economic collapse in 2008, as one candidate argued on Wednesday night. That ignores the numerous stories that the Vanguard published warning of the unsustainability of this situation as early as 2007. The 2008 city council campaign featured a debate between my wife Cecilia Escamilla Greenwald and incumbent Sue Greenwald (no relation), and incumbents Don Saylor and Stephen Souza.

The Saylor-Souza team would argue that we had a balanced budget with a 15 percent reserve. The two Greenwalds noted that this was an aberration, that in fact the city had massive unfunded liabilities, and was putting infrastructure maintenance into unfunded unmet needs categories, thus ignoring the need for roads and other infrastructure. The two Greenwalds argued that the city’s budget was unsustainable.

This council candidate debate occurred in April and May of 2008 and the economy didn’t collapse for another four or five months, in September 2008. The writing was on the wall, the only thing the economic collapse did was speed up the process and provide a catalyst.

The input from Mr. Parrella and the other canvassers, as well as discussions on the street and in community meetings, indicates that the recent public discussion unfortunately has focused on small ticket items such as the POU (Public Owned Utility) and some of the other city budget priorities. The public largely has not been engaged on the huge items: roads maintenance, buildings maintenance, retiree health, and pensions.

The public is also largely unaware of the efforts by the council in the last four years to deal with these imbalances.

The problem is that we are getting late in the game. The Yes On Measure O strategy works if the public is trusting of its government and simply needs to be informed as to what the tax is and where it goes. Unfortunately that trust appears to be in short supply, and any heavy lifting of a different, more trust-building message at this late hour seems problematic.

The city leadership is to blame here. The timing of Steve Pinkerton’s departure could not have been worse. Mayor Joe Krovoza and Mayor Pro Tem Dan Wolk are busy running for higher office, leaving their colleagues to pick up the slack, and their lack of clear direction and leadership is quite evident.

Daniel Parrella concluded his comments on Wednesday noting, “I believe that the day that the citizens of Davis can drive down Olive Drive and not have to swerve – it’s not even a road at this point, it’s gravel – the day that they can go down a freshly paved road will be the day the citizens of Davis trust the government.”

The irony, of course, is that the only way Olive Drive is going to be repaired is if the city can pass a parcel tax and it seems the only way that will happen is to rebuild the trust in the city. The problem is, how is that going to happen absent the funds?

If Measure O does not pass, the consequences will be catastrophic, not necessarily to the functioning of the city but, ironically enough, to the further erosion of public trust of  the city’s leadership.

—David M. Greenwald reporting


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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32 thoughts on “Vanguard Analysis: Is Measure O in Trouble?”

  1. Tia Will

    ““In my mind the biggest problem facing the city is public trust. As I’ve been walking precincts no one trusts the government. ”

    I have also done some canvassing and while it is true that many people that I have spoken with have expressed some distrust, I think that there are two points that need to be made.

    1) Disagreement with a single decision, even one about which the commenter feels strongly, does not mean that the individual does no trust the “government” as a whole and certainly does not determine for whom they will vote. I am a poster child for this. I had an issue within the past year or so about which I felt very strongly. I made multiple presentations and spoke with many public officials about this. The vote went against me and I was very, very disappointed. I even used ( in private) some harsh pejoratives about the intellect of those voting against me. This should not in any way be construed as an over all distrust of government.

    2) The over estimated impact of the negative view. We know this well in medicine. It is estimated that every patient who has a bad experience will tell 7 people about it. The person who has a good experience will tell one or two people about it. Add to this the fact that as human beings, the negative or dramatic story is more exciting and engaging than is the neutral or positive story. For example, many women come in for their first gyn exam in a state of anxiety having been told by their “friends” how painful it is. This does not have to be the case, and women frequently leave my clinic having experienced no pain at all. Only then does their perception significantly change.

    So what does this have to do with city elections and government. I believe that those of us who attend meetings, canvass, and post tend to have a very skewed view of our electorate. I have some close friends who i believe are more indicative of the typical voter than anyone we talk with when canvassing.

    They do not follow the political scene. They center their lives around other activities. They do vote, but typically ask us what our thoughts are and more often than not, vote accordingly. It is easy for us to believe that the more emotionally charged and vociferous members of our community with their largely negative take on events are representative. I hope, and believe that this anger and distrust will not turn out to be the dominant factor in the election.

    1. South of Davis

      Tia wrote:

      > I have also done some canvassing and while it is true that many people
      > that I have spoken with have expressed some distrust

      Sometimes it seems like Tia just likes to play devils advocate.

      I have never met ANYONE (right, left, center or indifferent) that will say “I have absolute trust in the government” or add “and no one spends and invest money as wisely as our government”.

      I just heard on the radio today that “Even though the National Guard spent $88 million as a NASCAR sponsor from 2011 to 2013, it is unclear how many new recruits, if any, signed up because of it, according to documents”

      Below are some other examples of the “Government most people trust” (according to Tia) spending our hard earned money “making America better” by spending $355K (1/3 as much as it cost to “study” a POU in Davis) to “study” if couples are happier when the woman calms down after argument.

  2. South of Davis

    Daniel Parrella said:

    > In my mind the biggest problem facing the city is public trust.
    > As I’ve been walking precincts no one trusts the government.
    > No one expects them to spend their tax dollars wisely.

    I was just talking to someone who joked “why not make the tax higher so the city will have an extra million to “study” creating a city owned electric car company and maybe with a 10% sales tax we can get some real nice trash cans with baskets on the side for people to leave half full drinks for the homeless to enjoy”…

  3. DavisBurns

    Hey, hey! Olive Drive has been repaved.. They ground down the top layer then poured a new surface. It’s smooth as a baby’s butt. They actually did a nice job. It’s been going on for two weeks and appears to be almost finished. So, I guess the public can trust the city council! Vote yes on O.

  4. Frankly

    Read the council candidate’s posts on their vision for Davis and consider this trust question. Fiscal sustainability requires a practical business management focus on both ends of the income statement. Revenue is more important from a long-term perspective because it cannot be immediately developed as can new expenses.

    Every demand for another tax increase is in fact another reason to not trust government. We are talking about tax rate increases… the process of taking a greater and greater percent of earning from the pockets of hard-working residents and handing it over to politicians and government employees to mostly spend on themselves. Their scheme is to frighten you the taxpayer by the threat of service reductions. They never give back any of the money they put in their pockets… at best they agree to slow down the absurd rate of increase of those dollars.

    We the public have been duped for too long. We get the scheme. We will tell these looters that they no longer will be able to enrich themselves at the expense of our long-term financial health and well-being. City services will continue, but just at a cost that is commensurate with what the general labor market requires. No more premiums paid to city workers just because they are city workers. We cannot afford it. We never could afford it.

    If you vote yes for Measure O or any other tax increase, you will have only yourself to blame for the continued escalation in the reduction of your personal earnings that would otherwise be used to care for yourself and your family. The city will never learn until we all say NO!

  5. Davis Progressive

    1999 – 3% at 50
    2000 – four on an engine
    2004 – sales tax measure passes – half-cent sales tax, city claims money needed to keep fire, police, parks
    2005 – money goes to 36% pay increase for fire, all other city groups get 15 to 18% increases
    2008 – council election with claims highlighted above
    2008 – economy collapses
    2009 – lamar tries alternative budget after official budget projects revenue increases
    2009 – first mou’s, few structural cuts
    2010 – rest of mou’s, phony math
    2010 – city imposes on dcea
    2010 – swanson and krovoza elected, no firefighter money
    2011 – saylor leaves, replaced by wolk
    2011 – council attempts 2.5 million cut in compensation, souza and greenwald vote no
    2011 – pinkerton hired
    2012 – lee and frerichs replace souza and greenwald on council
    2012 – no mous
    2013 – fire reform
    2013 – wolk and frerichs try to fire pinkerton
    2013 – impose on dcea and fire
    2014 – pinkerton leaves

    1. South of Davis

      What I bet they were talking about at the Pinkerton going away celebration:

      2014 – Pull strings to get “friends of the firefighters union” spokesperson Fernandes on school board
      2014 – sales tax measure passes – half-cent sales tax, city claims money needed to keep fire, police, parks
      2014 – Sheila elected to the city council
      2015 – money goes to pay increase for fire, all other city groups
      2016 – Fernandes elected to city council
      2017 – New fire station (claim it will be paid for by Cannery)
      2018 – New layer of (high paid) management to manage new fire station
      2019- Another “sales ta”
      2020 – More pay raises…

  6. Davis Progressive

    i’m tired of hearing the rhetoric that this is a governance team and that we need a balance approach. the balanced approach left the building when we failed to deal with the issues before us for more than a decade. this is about finding three people who have the balls to govern responsibly.

      1. Davis Progressive

        well i’m not opposing o, but i would like to see the council step up and that’s not going to happen if one of them gets elected.

      2. Don Shor

        I’m beginning to feel that this sales tax proposal is either too high, or for too long, or both. It is clear that we have candidates running who would be amenable to pay increases for public employees. Every time I hear ‘balanced approach’ I figure it’s just code for pay increases.
        It isn’t clear what level of economic rebound (I use the term loosely) would lead current council candidates to consider that there was somehow enough money for higher employee compensation. It isn’t clear what level of state re-funding to schools would lead current school board candidates to consider that there was somehow enough money for higher employee pay. I doubt we’ll get clear answers to those questions.
        What is very clear is who the firefighters want elected, and who the teachers’ union wants elected.
        If Measure O fails, I urge the council to come back with a two-year increase proposal.

        1. Davis Progressive

          to be clear it’s one candidate. i keep hearing people say, i would support “o” if i knew who’d be on council in july.

          1. Davis Progressive

            oh and don, the council would have to wait until 2016 before coming back with a sales tax proposal. i don’t think a two year increase makes any sense, it basically means based on their current projects they’d have to come back in two years anyway. in the meantime, services get straged.

          2. Don Shor

            I believe they can declare a fiscal emergency. And I think the numbers in front of them suggest they could make the case for that.
            “A “fiscal emergency” requires a unanimous vote by a community’s governing body, usually a city council. Such a declaration allows cities to more quickly place a tax question before voters, rather than waiting up to two years for the next scheduled local election.”

          3. David Greenwald Post author

            Harriet and Steve Pinkerton both told me that they could not declare a fiscal emergency.

          4. Rich RifkinWDE 73

            Steve told me it would be tough. However, he gave me no reason it could not be done. And while it may be a challenge, I think it’s an option that some California cities will pursue, as their general funds are no longer able to pay for basic services (police, fire, roads, parks).

            Moreover, there is another option out there, which is to curtail our OPEB payments*. I asked Steve, and he told me that Harriet told him that Davis could not do this because she says our OPEB obligation is “a vested benefit.” Vested means it is unbreakable, the way pension promises are.

            However, I think Harriet is wrong. There is no specific language in our contracts (past or present) which makes our OPEB promise any different than those in the City of San Diego. And that case is not settled law: first the appellate court ruled San Diego could curtail its OPEB payments; now the California Supreme Court has effectively validated that decision by refusing to hear the case, which upholds the ruling.

            The appellate court, in quite broad language, said that retiree medical benefits are not the same as pension benefits, that they are not vested and they can be curtailed if necessary.

            *What “curtailed” means is to put some sort of a cap on the OPEB obligation for individual retirees. Say last year it cost $1,000 per month for a typical retiree. And say the rate went up this year to $1,200. I think Davis could pay, for example, $1,050 and require the retiree to pay the last $150.

            If we went this route, which I think we should, I would favor a family income test, where those with a retirement income under $40,000 would have their full OPEB funded by Davis; those over $80,000 would have to pay the entire difference over the amount our general fund can afford; and those in between would have to cover some share of it.

          5. Rich RifkinWDE 73

            Here is the story:


            “The California Supreme Court’s decision not to review a lower court’s decision on other post-employment benefit liabilities is a credit positive for San Diego and other local California governments, according to Moody’s Investors Service.

            “The high court’s choice not to consider the appeal leaves standing a December 2013 ruling by an appeals court affirming San Diego’s ability to modify non-vested retiree health benefits.

            “”The legal ability to address unfunded OPEB liabilities through bargaining is credit positive because it translates into budgetary flexibility,” Moody’s analyst Thomas Aaron said in a report, released Friday.

            “OPEB benefits are typically funded on a “pay as you go” basis, rather than pre-funded like pensions. So the flexibility upheld by the courts to reduce costs is important in achieving material reduction in total obligations, Aaron said.

            “San Diego changed retirement health care benefits in fiscal 2010 with a benefit freeze. The city estimated that the freeze could lower its OPEB unfunded liability to $969 million from $1.4 billion, if applied permanently.

            “San Diego further reduced its unfunded OPEB liability through labor negotiations in fiscal 2012.

            “”The state Supreme Court denial of the application for review further establishes a difference between the treatment of retiree health care benefits and pensions under state law,” Aaron said. “Public pension benefits enjoy much stronger legal protection, and reform options are generally limited to lowering benefit formulas for future employees only.”

            “In contrast, municipalities in California can reduce OPEB benefits provided that state collective bargaining laws are followed and that benefits were not established as vested contractual rights.

            “Under San Diego’s city charter, attempts to change the pension system require a vote of employees and retirees. The state appellate court affirmed that retiree medical benefits are separate from the city’s pension system and do not require a vote to be changed.”

          6. Don Shor

            Evidently La Mirada, Fairfield, Culver City and San Bernardino have declared fiscal emergencies.

  7. Frankly

    Here is something to consider…. When is the last time any council member has come out against a new tax or new tax increase? I am guessing never.

    1. Davis Progressive

      i’m not sure that’s completely fair, after all, the council has gone through this crisis for six years without putting a new tax on the ballot until this year.

      1. Rich RifkinWDE 73

        “the council has gone through this crisis for six years without putting a new tax on the ballot until this year.”

        While literally true, what you have to keep in mind is that over the last six years, with the same tax rates, services have declined, and some fees have gone up. I’d have to look back at my old city services bills, but if memory serves, the cost of water, garbage, sewer, waste water, etc. has increase by about 100% in the last 5-6 years; and that is going to double again based on the water costs.

        1. DT Businessman

          And they deferred the maintenance. And they burned through the reserve. And now they’re at the end of their rope….i.e. tax increase. But hey, we have plenty of bandwidth.

          -Michael Bisch

    2. Rich RifkinWDE 73

      If I were a candidate running this year, I would probably be calling for a Yes on O vote. I would not have that position because I think it would help my candidacy. My logic would be, if I am on the Council, I will be responsible with the taxpayers’ money. I think that is essentially the logic of most (maybe all) candidates now running” Yes, the City has messed things up. You need me in there to right the ship. I can do that with a Yes on O.

      If someone, in light of the present fiscal mess, ran against Measure O this year, he might come across as saying: Elect me, but don’t trust me with any more of your money.

      Being that I can never see myself running for office, I might have that logic wrong. But from the outside, that’s the feel I get of their thinking.

  8. Michelle Millet

    Daniel Parrella said, “In my mind the biggest problem facing the city is public trust.

    I’m respectfully going to disagree with Daniel on this. From the canvassing I’ve done I would say people are much more apathetic then distrustful. Most could not tell you who are council members are most are just becoming aware, probably because of all the lawn signs, that an election is coming up. (Note I’m only visiting the homes of registered voters who voted in the last two elections. )

    The people who I have spoken to who are more engaged rarely say they don’t trust the council, there are issues they have concerns with which are all over the place, from parking, to peripheral growth, to the water project, but very few to date have expressed complete distrust in our local government.

  9. Michelle Millet

    “I believe that the day that the citizens of Davis can drive down Olive Drive and not have to swerve – it’s not even a road at this point, it’s gravel – the day that they can go down a freshly paved road will be the day the citizens of Davis trust the government.”

    I like Daniel. I feel bad because I have been giving him a hard time lately, but this statement didn’t sit well with me. It implies that all it takes for citizens to trust the government is paved roads, if that is true then we have much bigger problems then voter apathy.

    1. Davis Progressive

      i think you are tying to narrow a line to it. i think he’s using it as a chief example that drives home to people something is wrong.

    2. Mark West

      When I lived in Baltimore, every winter the City would send out press releases explaining that the reason the roads were so bad was due to the continual freeze/thaw cycle that moved the ground causing the roads to buckle. You could count on at least one major article in the local paper every winter describing this phenomenon. What was never explained however was why, once you left the City limits and entered Baltimore County, the roads were as smooth as glass. Apparently the ground only froze inside the City limits.

      Maybe the problem is not a failure of maintaining our infrastructure, but rather a failure of developing a plausible lie to placate the populace with, such as ‘the budget is balanced’, or ‘the roads are falling apart due to excessive sunshine on Fridays.’

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