Mayor Wolk Calls State of the City “Very Strong”

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Mayor Dan Wolk delivers the State of the City Address

Mayor Dan Wolk on Tuesday afternoon delivered his first State of the City address as Mayor of Davis to the Davis Chamber of Commerce. He remarked that while past State of the City addresses were “very dour,” “the state of the city is very strong right now.”

“2014 was a very good year,” Mayor Wolk told the audience.

The mayor went down a list of accomplishments from 2014, starting with economic development which included two innovation center projects and Nishi. He talked about Rob White and the RFEI (requests for expressions of interest) process that generated the two projects. “My sense is that we’re really at a tipping point right now in terms of our view of economic development,” he said. He added that, at the next meeting, the project description of Nishi comes forward to the council and he expects that to go forward as well.

Mayor Wolk discussed the new council, the election of Robb Davis and the hire of Dirk Brazil. “We are really lucky to have Dirk (Brazil),” the mayor said. “Not only does he have the experience but he has the history with the city, he went to school here at UC Davis and never left. He has really deep understanding of the community.”

“Between our new city council and our new city manager, we really have a well-functioning team here,” he added. “There’s a feeling that’s pervading city hall right now that things are really good. People are really optimistic. I think that’s a significant thing that happened in 2014.”

He also sang the praises of Cannery, which he said “reestablishes Davis as a leader in innovative housing.” The mayor said that we have two demographical issues in Davis. The cohort of those between 25 and 45 years old, “that demographic is shrinking. That really is concerning for the future of our city.” On the other hand, he added, “the cohort, our seniors, that age group 55 and over, that’s the fastest growing cohort in our city.” He said we need to think about both those groups and that’s what Cannery does.

Mayor Wolk said that the city was hit hard by the Great Recession, “but we’re emerging. We had a 25 percent reduction in employees, our employees had to take a number of concessions, cuts.” He said, “But things are getting better. We ended last year at $850,000 more than we were expecting. That isn’t considered one-time money. This recovery has legs.”

“We are on our way to eliminating our structural deficit,” he added.

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He noted, that “we managed to put away $4 million of our general fund… for infrastructure. We need to be doing more, but it’s a good start.”

“We, as of right now, are putting in what we need to be putting in for (pensions),” he said. The liabilities, he said, are daunting, but we are putting the money that we need to in to shore up those funds.

“This is a very sound city budget that we have,” Mayor Wolk said.

On environmental efforts, “I think the biggest thing is that we banned plastic bags – that may not be the most popular thing with everyone in this room – but we banned them and so did the state,” Mayor Wolk explained. He noted the referendum that has made the ballot statewide, “but that won’t affect the city of Davis.”

Dan Wolk noted that when he got appointed to the city council back in 2011, he had a number of questions asked about him, and “not one question was about water. And since I’ve been on the council, I feel like every waking moment of my life has been about water.” He noted that Measure P passed last year which “got rid of the dreaded CBFR rates that caused a lot of controversy.”

“We have now adopted a rate schedule that’s fair, that’s easy to understand and has most importantly public buy-in,” he said. He also noted we qualified to get SRF (State Revolving Fund) funding, and “that’s going to translate into millions of dollars of savings to our ratepayers. So going forward we won’t likely have to have the rate increases that were predicted.”

Finally, Mayor Wolk noted that we settled the lawsuit that threatened to undo the project.

Mayor Wolk also talked about the Fifth Street road diet – another controversial topic in the room. “We’re kind of seeing how that plays out,” he said. “So far the results have been good, but I think it really takes a while for folks to get used to that… Certainly, the sky didn’t fall on that project.” He noted that he bikes down Fifth Street, so he really appreciates the change.

“My vision for 2015,” Mayor Wolk explained, “is renew Davis.”

He quoted from Newark Mayor Corey Booker, “We drink from wells that we did not dig.” From Mayor Wolk’s perspective, “Previous generations give a lot to our community… so that all of us in this room can benefit from that. I think that we have an obligation… to pay that forward.”

“We have significant challenges that go well beyond our time in this community and we need to be willing to make the sacrifices to ensure that future generations have the same things that we benefited from,” he added.

He said that’s the theme not only of his service on the council but as we think about 2015, “that’s really what I want us to be. My conception of that is ‘Renew Davis.’”

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Mayor Wolk talked about economic development and UC Davis. “We need to renew our commitment to the idea of the university, but bring it to the next level and that’s really what these innovation centers and Nishi are all about. That’s about harnessing the technology that’s coming out of the university, not only incubating it here, but growing it and having it stay here long-term, so that we can have highly skilled workers, graduates of UC Davis, stay here in our community.”

“If there’s one thing that has really thrived in the last year, it’s this Jumpstart Davis effort which really has the potential – the entrepreneurial energy is there, but it really needs to be harnessed and strengthened,” he said. “We have Jumpstart Davis, Davis Roots.”

Mayor Wolk noted that we have significant deferred maintenance in our roads, infrastructure and pools. He noted the leak in the Civic Center pool which he said highlights this problem that we have. “Davis in a recent study of Yolo County has the worst roads,” he said. “We have a lot of significant infrastructure issues. The problem is that this takes a lot of resources.” These costs have fallen on our local government.

Dan Wolk also took a few audience questions. He explained that right now the city has two innovation center proposals and Nishi. CEQA (California Environmental Quality Act) work and other studies are occurring on these projects.

“If everything goes according to plan, the studies will get done by the end of 2015,” he said. Right now, he said, those schedules have it so that they all go to the ballot in Spring 2016. “I have no doubt that something will go on the ballot in Spring 2016. I think it’s premature to discuss what exactly is going to happen because we just don’t have those studies back yet.”

“But at least for me,” he said, “all three of those would be wonderful additions to our community.”

He said you have to think long term, but he said it’s important to look at the environmental studies and absorption rates before making final decisions.

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Mayor Wolk was asked to weigh in on minimum wage. “I really respect the desire to raise the minimum wage,” he said. The state has raised it to $10 per hour. He noted the desire to raise it beyond that. “We have a very high poverty rate in California, one of the highest in the nation at almost 25 percent. That poverty is here in Davis as well and an effective tool to combat that is the minimum wage.”

Mayor Wolk did not directly address the $15 per hour proposal but said that Mayor Kevin Johnson of Sacramento has convened a task force that will look into the issue more and he thinks that will be informative.

“I think Davis is going to benefit from the work that’s done by that task force,” Mayor Wolk said.

He said he’s very supportive of raising the minimum wage, but also cognizant that this will impact small businesses. “So for Davis to raise it without other cities, without it being a statewide effort, there are concerns with that,” he said.

Mayor Wolk once again expressed concern about the declining 25-45 demographic and declining enrollment rates. He also expressed concern about housing for seniors and available services and resources.

Mayor Wolk noted that in recent years Davis has begun to flex its muscles regionally. “With the innovation centers people are really [seeing] that Davis really is beginning to do some things at our regional level,” he said. “I think we really need to do more of that.”

He said he wanted to see the councilmembers pushing for us to do more at the regional level and partnering with others in our region.

“The bottom line,” he said, “is the state of the city is very strong and we’ve got a really bright future.”

—David M. Greenwald reporting

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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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20 thoughts on “Mayor Wolk Calls State of the City “Very Strong””

  1. Davis Progressive

    boy, where to start.  i guess give him credit for trying to parse the right tone here – he’s optimistic, but aware of the challenges ahead.  the problem that i have is he appears to optimistic about the current state of things, i think his comment about pensions is misleading, and he clearly would like to grow and grow and grow – he hit the issue of family housing, wants all three of the innovation parks, etc.

  2. Frankly

    Sorry I had to miss out on Mayor Dan’s show.  Sounds like he covered all the based and hit the right tone… except for the clearly telegraphed message that he will lead the charge to increase pay and benefits for city employees.

    This leads me to a question… do city council members currently working in public sector jobs, or with a career in government lack sufficient objectivity about the topic of city employee pay and benefits?   Davis has been in the Great Recession economic trough much longer than other cities due to the lack of sufficient tax receipts from business activities, and just when we have our first positive year (1-2 years later than other cities), our Mayor talks about giving away the store.

    It is possible that Dan and Lucas – two of our council members with clear ongoing political aspirations in state politics… an expensive game… are motivated to keep the local employee unions happy enough to contribute to future campaigns.  It is also possible that Davis city employees are actually deserving of some increase… although on this point, having a lot of experience in formulating private-sector market-based compensation packages competing for talent in highly competitive labor markets, I don’t see it… when factoring the total compensation including the monetary value of job security, young age retirement, full defined benefits at a high percentage of salary and full healthcare covered for life.

    I just hope the other three council members are not weak on this important subject.  I am hearing the song of bad employee moral.  Yet is is absolutely known that simply paying employees more does not fix employee moral.  In fact, some of the companies that report top-level job satisfaction and the best places to work are known to pay a bit less than market wages.

    The list of employee motivation / employee retention strategies is well-documented in the leadership body of knowledge.   Pay is 3rd or 4th on the list.   And it only requires that pay be in a “sweet spot” and includes total compensation.  For example, in a highly stressful, highly-competitive job where top-levels of performance and production are consistently required, the sweet spot should probably be a bit above market.   In a more relaxed work environment, or one where the performance and production expectation is less than top-level, it would be inadvisable to pay above market wages.  It may be appropriate to actually pay less than market wages in consideration of other job attributes.

    The top level employee motivators have to do with leadership and making a difference.   And with the turn-over of the city manager and the turmoil of staff reductions and a more aggressive performance and productivity agenda for the city, it is bot understandable why we are facing some staff moral problems, and frustrating that we have not leveraged the motivating power of greater participation in the more aggressive city agenda.

    What is my point here?   It is that voters should really push back on any justification for city employee pay and benefit increases to deal with morale issues.  Instead the city should hire an independent outside consultant to do a true mark-to-market analysis of pay and benefits compared to other comparable cities and roles, and also compare it to comparable roles in the private sector.   And this or another independent consultant should also complete a study on city employee morale and make recommendations for improvement.   Until this is done we should not be in support of any demand to increase city employee compensation because there would not be any assurance we would get any commensurate return on that greater ongoing expense.

    One last point to make.  Current retirees are not in a position to earn more.  But existing employees can simply work more years.   Paying existing employees more increases the risk that in the next economic downturn we will end up having to cut existing retiree benefits (like Stockton).   That would be more than unfair… especially given what we knew and how we decided to ignore the facts.

     

    1. Davis Progressive

      good comment overall.  i think it would be important to see where the other three councilmembers are on employee compensation, and probably four as lucas didn’t seem to be nearly as optimistic as dan in the quotes provided by the vanguard yesterday.

    2. hpierce

      “Davis has been in the Great Recession economic trough much longer than other cities due to the lack of sufficient tax receipts from business activities,…”  other ‘similar’ cities? California cities? Average cities? Sources/citations?

       “Current retirees are not in a position to earn more.”  The more talented are, and do. Others, based on age/health, lack of marketable skills, others are not.  Fair comment, but not rigorously true.

      “… any justification for city employee pay and benefit increases to deal with morale issues.”  Morale issues have more to do with internal ‘manipulation’ of fair employment practices, historical favoritism towards Public Safety employees as to compensation, and more than somewhat arbitrary actions by Mr Pinkerton, who had City offices remodeled twice during his brief tenure (costs are “hidden” in ‘operating expenses – no chargeable program created) to 1) give himself a refuge from public/employee contact, and 2) to separate PW office functions from PW field functions [to the operational detriment of each function].  That being said, compensation improvements can serve to ‘mitigate’ the root causes. “… another independent consultant should also complete a study on city employee morale and make recommendations for improvement.”  Agree with this, as I expect it would confirm my take on the basic morale issues.  Another would be the decision of a former City Manager to reclassify planners as “managers”, while leaving other professional staff as ‘rank and file’.  A work-around to compensate the planners more than historically, compared to other professional staff.

      The study should look at the ‘agendas’ that have been executed by the CM office, including HR.

       

      1. Frankly

        other ‘similar’ cities? California cities? Average cities? Sources/citations?

        From Palo Alto’s FY2013 budget…

        FY 2013 General Fund Budget Highlights

        Revenues

        Overall, total General Fund sources of funds are budgeted at $151.0 million, a $4.5 million or 3.1 percent increase over the Adopted Fiscal Year 2012 Budget and a $0.7 million or 0.5 percent increase over the Adjusted Fiscal Year 2012 Budget. Staff has projected solid increases in sales, property, TOT and documentary transfer taxes for Fiscal Year 2013, but these have been offset by drops in rental income and other revenues.

        In the past year, we have witnessed a rebound in economically sensitive revenue sources. Sales taxes, originally budgeted at $20.2 million for Fiscal Year 2012, are expected to end the year at $21.6 million. Based on recent performance, the projected target for Fiscal Year 2013 is $22.5 million. Specifically, department store, and electronic sales have spearheaded the rise. Because of increased business activity, transient occupancy (TOT) or hotel taxes have risen nicely as well. TOT revenues from July through February of this fiscal year are running nearly 23 percent above those of the same prior period. Accordingly, we have raised our Fiscal Year 2012 target from $8.2 million to $8.7 million and have set an ambitious goal of $9.6 million for Fiscal Year 2013.

        1. hpierce

          Well Frankly (because you are) you must be very accomplished to be able to make a general statement based on one data point.  I was trained to use several.

          That being said, thank you for sharing the citation for that one data point.

        2. Frankly

          Actually – Rob White (before he was silenced) made this point several times.

          See here…

          http://www.sco.ca.gov/state_finances_101_state_taxes.html

          You will note that the actual state sales and use tax trough hit FY2011-12 and started to rebound in the next fiscal year and again a larger uptick last year.  Same with corporate taxes (cities do not share in those revenues, but it is indicative that business was more active and generating the other types of taxes that cities benefit from).

          Davis’s better showing is primarily from a surge in property tax revenue that is the result of other macro economic factors.  Note: since our housing market did not drop much during the recession we cannot attribute too much of the surge in housing turn-over to a surge in values… it was/is more likely the surge in the stock market and continued low interest rates.  These things will likely hit another downturn.

          Had we a stronger retail and business sector we would have shared in the surge in those revenue increases.  Since we did not, our “good news” was delayed by at least a year and is frankly (because I am) just a lucky thing given our no-growth-made-fake-supply-contrained housing market.

  3. Tia Will

    Frankly

    “The list of employee motivation / employee retention strategies is well-documented in the leadership body of knowledge.   Pay is 3rd or 4th on the list.   And it only requires that pay be in a “sweet spot” and includes total compensation.  For example, in a highly stressful, highly-competitive job where top-levels of performance and production are consistently required, the sweet spot should probably be a bit above market.   In a more relaxed work environment, or one where the performance and production expectation is less than top-level, it would be inadvisable to pay above market wages.  It may be appropriate to actually pay less than market wages in consideration of other job attributes.

    where would you rank city employees of various groups on your scale of highly competitive, high stress positions vs “more relaxed” work environments ?

     

    1. Frankly

      Tia – That is a good question.  I think the study should analyze that and report back.

      I think just about every city the size of Davis and larger has gone through the same budget challenges that have resulted in wage and hiring freezes, benefit cost sharing and layoffs.   So from that perspective I don’t see Davis’s city employees any more stressed by comparison.   Our city has relatively low crime and few fires, so our safety employees would not seem to be overly stressed.

      It has been suggested that Davis has a high percentage of residents that are rude and difficult; but I am not sure we are so different than other comparable cities in that respect.

      I think the city management volatility along with so many demanded services plus new causes and projects, is certainly at least a temporary stress causer… assuming the new CM can lead his teams to a more calm professionalism to tackle the work challenges.

      But from my experience, given the average number of hours worked per employee compared to the same in the private sector, I have a general sense that work environment is significantly more “relaxed” with that comparison.

      Especially at the highly compensated positions… those paying near six figures and above.   When you look at comparable pay in the private sector, those are professional roles that tend to not support the employee taking a lot of time off.   For a long-term city employee, holidays and other paid time off generally allow for the equivalent of 6 weeks or more paid time off.  That far exceeds norms in the private sector where professionals are generally challenged to take 2 weeks off.  And other than the evening work that some city staff have to attend dealing with council, committee and commissions business, I rarely see the salaried city employees working after hours.

      But I profess that I am only basing this assessment from limited outside observations.   I think we need a full assessment of compensation including the point about stress and hours worked.

  4. TrueBlueDevil

    I concur with Frankly’s thoughtful post.

    It seems like the Mayor or David skipped a key portion of why the city is feeling better, the tax measure that passed.

    Is it common for cities to put commercial developments to a public vote? I thought many projects just pass through the planning commission, planning department, EIR, and then a city council vote.

    For all the gnashing of teeth over the overwhelming needs of the roads and pools, why not just pass a $100 or $120 per parcel yearly tax in this Democrat city? Wouldn’t this solve the majority of the road and pool problems?

    What other huge “infrastructure” issues are sitting out there? It would be good to have a list for realistic planning.

    1. Davis Progressive

      “It seems like the Mayor or David skipped a key portion of why the city is feeling better, the tax measure that passed.”

      the vanguard’s article yesterday noted that the $850,000 was from last fiscal year and the tax increase didn’t take effect until october.

  5. Anon

    We have now adopted a rate schedule that’s fair, that’s easy to understand and has most importantly public buy-in,” he said. He also noted we qualified to get SRF (State Revolving Fund) funding, and “that’s going to translate into millions of dollars of savings to our ratepayers. So going forward we won’t likely have to have the rate increases that were predicted.”

    I’m not sure the Mayor is correct on this one.

    1. Matt Williams

      Time will tell. That is what the URAC is for. To transparently and openly and thoroughly look at the revenues and expenses each year. By my calculation, over the 30 year life of the $95.5 million borrowing, the City will save $51 million in interest expense. That is the difference between the debt service costs in the Bartle Wells Cost of Service Study Update (which calculates to an average interest rate of 4.5% … a rate that is lower than the 5.5% to 6.0% interest rates listed in the 2013 original Bartle Wells Cost of Service Study … but clearly higher than the State Revolving Fund rate below 2%.

      Anon’s statement will be correct if either one of two things happen. First would be reduced total revenues due to conservation that exceeds the projections that Bartle Wells included in the Cost of Service Study Update. Second would be an increase in non-interest costs, but given the nature of the DBO contract, that second possibility is highly unlikely to happen.

  6. Miwok

    he had a number of questions asked about him, and “not one question was about water.

    “that’s really what I want us to be. My conception of that is ‘Renew Davis.’”

    “We need to renew our commitment to the idea of the university, but bring it to the next level

    I hope these are typos. I could make fun, but I know how we all get a bit tongue-tied in public speaking.

    We had a 25 percent reduction in employees, our employees had to take a number of concessions, cuts.

    Mayor Wolk was asked to weigh in on minimum wage. “I really respect the desire to raise the minimum wage,” he said. The state has raised it to $10 per hour. He noted the desire to raise it beyond that. “We have a very high poverty rate in California, one of the highest in the nation at almost 25 percent. That poverty is here in Davis as well and an effective tool to combat that is the minimum wage.”

    I guess you can be FOR and AGAINST something at the same time? I guess he has no problem with raising wages and salaries as long as he can lay them off later?

    He noted, that “we managed to put away $4 million of our general fund… for infrastructure. We need to be doing more, but it’s a good start.”

    What is that a euphemism for? We HID it? Locked it away? Saved it? Moved it off the books? Gave it to consultants? Not very clearly stated.

    1. David Greenwald Post author

      No those are faithful to what he said. I try to smooth out rough edges in quotes as much as possible, but Dan does a lot of shifting sentences mid-term.

    1. Davis Progressive

      yes, i think we should fall into the exact same trap as before – increase personnel costs while failing to invest in infrastructure.  that’s ironically what you’re proposing here.

  7. Tia Will

    I guess you can be FOR and AGAINST something at the same time?”

    I think that this is absolutely true. One can certainly see the pros and cons of a proposal and have very mixed feelings. It is only when it comes to a vote that one must make that final decision for or against.

  8. Alan Miller

    “the state of the city is very strong and we’ve got a really bright future”

    Sounds optimistic, like positive thinking.

    So . . . if I’m hearing correctly:  The glass is 31% FULL.

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