It is perhaps easy to forget the world of 2008. It was just seven years ago that two incumbents won reelection, arguing in essence we had a balanced budget with a 15 percent reserve. Back then, there was only a handful of people pointing out the fiscal doom that the city would face – only three months after the election that changed the community’s thinking on the budget.
To his credit, long before almost anyone else, Rich Rifkin was the one who warned about the unsustainable nature of pensions, employee compensation, and the firefighters’ union in particular. It wasn’t until the collapse of the U.S. economy in September of 2008, the economic downturn, and a set of new elections that the community really caught onto the reality of the situation.
So the community would be wise to take note of the heavy dose of criticism that Rich Rifkin levels at the Davis City Manager Dirk Brazil in his column today. (Davis City Manager Fails to Lead, June 24, 2015). Mr. Rifkin opens, “Next week, Dirk Brazil will mark the start of his ninth month on the job as the Davis city manager. Sadly, there is already good reason to think that our City Council made the wrong choice in picking Brazil to replace Steve Pinkerton.”
Mr. Rifkin goes on to note that, over the past two decades, the city has increased its payroll mainly for employee compensation at a rate that is faster than tax revenues grew. The city was able to survive in the late 1990s through one-time construction tax revenues. During the last decade it was a half-cent sales tax coupled with the real estate boom that kept the city in the black.
However, “All the while, the unsustainable growth in employee compensation rates has caused the city’s debts and future obligations to balloon to unfathomable levels.”
Despite great efforts by the previous council to patch the holes, in the form of a transition to fully funded retirement medical and to put general fund money on badly needed infrastructure like roads, Mr. Rifkin writes, “We are roughly $150 million in the hole for unfunded medical care and underfunded pensions; and, as of 2014, our road maintenance debt was estimated to be $160 million over 20 years if the city hopes to keep the quality of our street pavement no worse than it is today. Bike paths that should have been resurfaced 10 years ago have been allowed to crack and disintegrate.”
Like many of us, Mr. Rifkin can relate a personal anecdote about walking his aging mother around the park with the path being perilous. As he put it, “Some potholes now have potholes.”
For me, it was my daughter tripping on a crack in the sidewalk, with several councilmembers quickly promising to see that the needs are fixed.
And yet it was a year ago the council had the opportunity to consider a parcel tax to fund roads and other infrastructure, but were scared off by polling that showed less than full support by the public. Instead of doubling down on public outreach, the council has sat back and allowed conditions to worsen.
The city is expected finally this summer to undertake a major roads construction effort, throwing as much as $15 million at the problem, though the city manager concedes that will not be enough.
Mr. Rifkin notes that we are paying more to get less in service. He writes, “To fund the raises we are giving city employees — largely in more expensive retirement benefits — Davis is providing less service in most departments. The city now employs about 100 fewer people than it did several years ago.”
We have yet to have any sort of analysis as to the impact of that loss in employees on city services.
Mr. Rifkin quickly shifts his focus to the issue of economic development and the labor negotiator.
He writes, “In recent months, Brazil has replaced two important city officials: the city’s chief innovation officer, Rob White; and the city’s chief labor negotiator, Tim Yeung.”
Mr. Rifkin writes, “When White was fired and and his job was given to a less qualified (and lower-paid) person, Diane Parro, I was told that Yolo County Supervisor Don Saylor was pulling the strings. It was suggested that Yolo County was mad at White, because the county felt left out of the planning process for the peripheral ‘innovation’ business parks that White was promoting.
“Since Parro had been Saylor’s deputy prior to taking the CIO job, and because she does not have near the innovation experience of White, I had to wonder if my source might be right. However, I asked Saylor if there was any truth to this rumor, and he denies it.”
“… I had no involvement in the change in employment status of Rob White,” Mr. Saylor told Rich Rifkin in an email. “I also had no involvement in the city manager’s selection of Diane Parro as the incoming city of Davis chief innovation officer.” Mr. Saylor added, “I wholeheartedly support her in this new role and have great confidence that she will continue to be an asset to our community.”
Mr. Rifkin accepts his explanation reasoning, that “[w]hat I think is more likely is that White was viewed by Brazil as Steve Pinkerton’s man. I think Brazil simply wanted someone in that job whose loyalty was to him, not to his predecessor, and actual qualifications for the job were not his priority.”
Given that Mr. Brazil was perhaps looking for someone with loyalty, though to him, it still seems like a strange move to go to Diane Parro, who does not seem to have a background in economic development. After all, when Mr. Brazil was hired, people in the economic development community and the business community, familiar with his work, were pleased.
So why couldn’t he find someone with more experience who would be “his person”? One explanation is that Mr. Brazil, familiar with Diane Parro’s work at the county, identified her early on as someone he wanted on “his team.” Second, there is the cost issue and, while we can name some prominent Davis residents with extensive economic development experience, it does not seem likely that they would come in at the price at which Mr. Brazil ultimately hired Diane Parro.
Finally, while Mr. Saylor likely was not pulling the strings, that does not mean that the pick wasn’t made with him in mind – hoping to perhaps bring him on board in some city efforts.
Mr. Rifkin then discusses the replacement of Tim Yeung with Patrick Clark as labor negotiator.
Mr. Rifkin writes, “I think the same thing likely happened when Brazil canned Pinkerton’s labor negotiator and replaced Yeung with Patrick Clark. While everyone I have spoken with who knew Yeung’s work praised him, and said he was capable of driving a hard bargain on behalf of the city of Davis, Yeung simply was not Dirk Brazil’s man. He was ‘tainted’ by the association with Pinkerton.”
He reasons, “The great problem with letting Yeung go, however, is that now Clark, who has less experience, has to spend months to get up to speed. And it’s not as if Patrick Clark is going to rely on a real expert — see my picture above — to train him for this fight.”
Mr. Rifkin may not be correct on the issue of the labor negotiator. I am informed that the decision on Tim Yeung was a decision by the Davis City Council. (CORRECTION: I was previously misinformed that Robb Davis had dissented on the hiring of Patrick Clark.)
Finally, Mr. Rifkin takes issue with Mr. Brazil’s declaration at the Finance and Budget Commission meeting that he would not engage in further takebacks.
He writes, “Yet the worst part of this story came several weeks ago at a meeting of the city’s Finance and Budget Commission. Brazil showed his cards and declared how weakly he planned to play his hand. He told the commission explicitly that the city will not ask for any concessions from city employees, when their contracts expire on Dec. 31.”
Mr. Rifkin concludes, “So why should you or I or anyone have any confidence that Dirk Brazil is working to solve our city’s severe fiscal problems? Just let the unpaid bills mount and let our streets crumble. It looks like we lack leadership at City Hall.”
Rich Rifkin, as early as 2007 and 2008, was warning the city about the pending fiscal crisis long before most people saw a potential problem. Perhaps we should start taking a closer look at the city manager as well.
—David M. Greenwald reporting