My View: The Public is Not Aware of Fiscal Challenges For the City

Pothole-Sky

pothole-2Yesterday’s commentary noted that the city’s messaging on the road congestion missed a critical opportunity to inform the public of the ongoing challenges the city faces in the repair of infrastructure – specifically roads, sidewalks, bike paths, parks, greenbelts, swimming pools and city buildings.

Several of the points made by readers were critical in understanding the disconnect on some issues. One of them noted that at a recent block party a group of well-educated working people really didn’t know about or read the Vanguard. They knew about things like plastic bag bans, MRAP, and KetMoRee, but “nobody there really had a good sense of the city’s true financial picture.   The common perspective was that the city was doing well again.  That we were out of the woods after the Great Recession.”

Part of the problem is that for those not reading the Vanguard, there is not a lot of coverage of the city’s financial picture.

Or as Don Shor noted in a follow up comment: “Four pages of hits at the Enterprise looking for ‘budget’ yields this total coverage of city budget issues. There was far more coverage of school district budget issues.”

He pulled up just four articles in the last year on the city budget – and three were positive: “City budget outlook brightens,” May 12, 2015; “The Mayor’s Corner: Give thanks for better budget news,” Nov 30, 2014; “Grim city budget looks rosier,” Nov 16, 2014; and “More tax revenues alone will not solve our city’s budget troubles,” Rich Rifkin, Apr 15, 2015.

A search for Bob Dunning and “unfunded liabilities” on Google turns up no hits. Bob Dunning hasn’t written about deferred maintenance either. But he has written over a dozen articles that mention the city’s sugary beverage ordinance in the last year. And he has written plenty on the city’s water rates and drought restrictions.

The other night I had a conversation with a councilmember about, among other things, the lack of declared council candidates to this point. Right now it appears we have incumbents Brett Lee and Lucas Frerichs running for sure, and challenger Matt Williams joining them, with Dan Wolk running for Assembly. As the Vanguard has pointed out, it is too soon to tell about the number of candidates – as November, January and even February and March has regularly brought candidates out of the woodwork.

Part of what is driving the lack of candidates is the perception by many that things are good in the city – and I think that’s largely perception.

On the city’s fiscal front, the passage of the sales tax certainly bought us some immediate time. But while the council should be commended for carving out $4 million on roads and launching $12 million in road repair projects in this fiscal year and next, the reality is that we have over $100 million, perhaps $150 in deferred maintenance right now in roads – and so, while we have greatly inconvenienced residents driving around town, we have just scratched the surface in need.

The larger fiscal picture is not great. As we have pointed out numerous times since June, the ten-year budget projections, to me, look very bleak. We remain in the nominal “black,” ignoring infrastructure costs that will likely take a new tax hike to address, until and unless the sales tax increase drops off. We then end up right back in the red.

The city manager, as we have noted, has taken the possibility of employee concessions off the table for the next three to four years, which basically means that, at best, we have a zero-increase in costs. But the city has talked about a small COLA (Cost-of-Living Adjustment), which could push us back into the red within a few years. At the state level, talk about increasing costs to pensions as the Baby Boomers hit retirement could also push us back into the red.

Even under the best conditions, the budget seems on the brink of going back into the red – again, not taking infrastructure needs into account. The economy is actually itself losing some steam and, even if it weren’t, within the next ten years, we’re likely to hit another downturn.

On the revenue front, the Hotel Conference Center, when built, could provide us with some good revenue, but that process figures to bog down some in legal costs.

We have also assessed the Mace Ranch Innovation Center and Nishi – but those are longer term aids to the city’s coffers and they also depend on our ability to manage the budget in a responsible manner.

The bottom line is that, while the city is not in immediate crisis, the finances are precarious at best. The messaging from the city is not helpful here. Last fall, Mayor Dan Wolk trumpeted the city’s finances as improving – which, while accurate, wasn’t particularly helpful. He seems to have backed off that drum for now.

The city messaging and the coverage in the local paper are not painting a very accurate picture of what is going on. What happens then is when the city takes on a huge amount of roads projects, the public complains about being inconvenienced. From our perspective, this was the perfect time to hit the point about where the road situation fits into the ultimate budget picture and why, in June, the council is going to be asking for a tax increase to pay for the roads.

I made the same point two years ago – the city needed to prime the public for tax increases it needed. Very little happened on that front – as a result, the public doesn’t understand the depths of the city’s financial problems. We saw in last year’s polling that most people thought our financial position was good as opposed to fair or poor – we see that in the anecdotal comments of people in the community.

Mayor Pro Tem Robb Davis took exception to a comment about the failure to lead – I get his criticism that he feels that the city and council have done a lot to fix our problems – I agree. I think the problem is not so much the failure to lead as the failure to communicate to the public.

Like I said yesterday – the city is pumping out press releases on the roads situation and Stacey Winton is emailing those messages and posting them on Next Door. But those messages are incomplete. They don’t present the public with the overall view of where the city stands on roads. They tell the public which roads are going to have construction, but not why we have to work on all these roads now and what the future is going to hold.

You don’t have a lot of opportunities to have people at complete attention but, when people are stuck in traffic, you have their attention and you need to utilize that attention.

—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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29 Comments

  1. Davis Progressive

    i think the city has a lot of structural problems right now.  i mentioned in the other comment on yesterday’s article the lack of a finance director is very glaring for a city with a city manager who has no such experience.  robb davis seemed to get defensive about my comment about the lack of leadership, but i don’t see this as being on him.  he didn’t bring dirk here, he’s not in control of who dirk hires or doesn’t hire.  it’s telling that we have a new parks director this week but still no finance director.  that seems to feed into my perception that dirk-dan are in control.

  2. Anon

    ” I think the problem is not so much the failure to lead as the failure to communicate to the public.

    This is exactly right.  Think about what has happened in the recent past. The message and signals the city is sending out are self-defeating, mixed, contradictory, confusing.  It is no wonder citizens do not understand the city’s true financial picture.  Look at the 9 points illustrating what has happened and their implications from the average citizen’s point of view:

    1. The city claims a bleak financial picture ($6 million budget deficit, desperate unmet need for city road and other existing infrastructure repairs);

    Average citizen: The city is in deep financial trouble.

    2. The city insists an increase in the sales tax is necessary – to be paired with a parcel tax – as a TEMPORARY BRIDGE to long term fiscal sustainability through economic development (innovation parks);

    Average citizen: We need to support a sales tax increase until economic development comes on line.

    3. There is a change in city managers, the reasons never explained to the public;

    Average citizen: What the heck?  What’s wrong?

    4. Once the sales tax measure is approved by voters, then the message from the city is it’s economic picture is much rosier, with no mention of all the unmet needs of pension/health benefits of city employees or road and other infrastructure repairs/maintenance;

    Average citizen: The city must be in much better fiscal shape (sign of relief).

    5. Three innovation park proposals are put on the table for serious consideration – Nishi, MRIC, Davis Innovation Center;

    Average citizen: Oh good, economic development for long term fiscal sustainability is on track.

    6. Suddenly the city’s Chief Innovation Officer, who was very effectively promoting economic development, is fired without explanation;

    Average citizen: What?  Doesn’t the city support economic development or the innovation parks?  I don’t get it!

    7. Davis Innovation Park is put on hold (which is a euphemism for withdrawal of the project);

    Average citizen: Uh oh… it looks like the city isn’t supporting the new innovation parks, especially since they fired the CIO.

    8. There is talk of proposing a utility user tax from the City Council because the city is in dire economic straits;

    Average citizen: Why do we need a utility user tax if the city’s picture is much rosier and doesn’t care about economic development?

    9. At the same time there is also talk by the City Council of a new sports park being built, and a task force is formed to explore the possibility.1. The city is in deep financial trouble.

    Average citizen: New sports park?  If the city has the money for a new sports park, there is no need for a new tax.

     

    1. Anon

      Correction:
      9. At the same time there is also talk by the City Council of a new sports park being built, and a task force is formed to explore the possibility.

      Average citizen: New sports park?  If the city has the money for a new sports park, there is no need for a new tax.

    2. Tia Will

      Anon

      I don’t know who you are identifying as your “average citizen”. We hear repeatedly from many sources, the City, the Vanguard authors and posters, the Enterprise, people in businesses, people representing the University that Davis , that Davis citizens are very engaged in their community. Some have even opined that the “citizens” need to keep their noses out of the “business” of the city and private business. And yet, you have chosen to present your “average citizen” as someone who simply gloms on to the latest sound bite as though it were an accurate summation of all that has gone before and simply runs with it.

      While this is probably true for some who don’t take the time to read or follow city related events I think that ( at least from the many sources noted above)  the proportion of these folks is probably significantly lower in Davis than it is in other communities in which I have lived…..for better or worse depending on whether or not you value or would rather sweep aside public participation.

      1. Anon

        Tia, in talking to many, many citizens, so many are going about their daily lives of raising their children, working at least 5 days a week while catching up on chores during the weekends.  I very much doubt the average citizen in Davis is following the budget very closely – especially in light of how few show up in the City Council chambers when budget issues are discussed (almost no one).  They do get their information in small “soundbites” of information, and most of it through the Davis Enterprise.  If you listen at City Council meetings, during public comment, it becomes very clear even a number of participatory citizens don’t really understand budgeting issues.

        Secondly, do you disagree with my basic premise that the city is giving mixed messages through its schizophrenic actions, which may confuse citizens?

  3. Matt Williams

    To put his into context, city staff provided the three page draft list of the capital infrastructure projects that are either needed or being considered or both.  Most of the list fall into the “needed” category.  The Sports Park falls into the “being considered” category.

    I have entered those numbers into a spreadsheet and their total is over $183 million of one-time expenditures and an additional $20 million of recurring annual expense.  If you back out the $24 million for the Sports Park the oneitime number comes down to $159 million.

    Our deferred maintenance debt to ourselves is $159 million one-time plus $20 million per year … and you will note the big word DRAFT on those staff tables.  They still don’t have the complete list.  The amount we owe will be growing larger as the list becomes more complete.

    COD Capital Projects Wish List DRAFT 10-2015(1)

    COD Capital Projects Wish List DRAFT 10-2015(2)

    COD Capital Projects Wish List DRAFT 10-2015(3)

    1. Anon

      Oh my goodness, I did forget event #10 on my list – city publication of a “wish list” that includes such things as a new dog park.  I suspect the average citizen will take one look at that list, and conclude there is no need for a new tax if that is any example of what the city plans to spend the funding on!

    2. hpierce

      My eyes are too old to read it… Matt/Anon (whoever posted the list) can you provide link?  I do note it is labelled “draft”, which makes me leery. Looking for not just info, but context…

        1. Sam

          The problem is that people can’t really comprehend large numbers. To put this into a prospective that might help people understand, if the City of Davis was a family it is living in a house that needs $159,000 in current repairs plus $20,000 in annual expenses, has $120,000 in credit card debt, $47,000 mortgage and makes about $48,000 a year. To top it off in a few years the City knows their income is going to decrease and will be unable to support its annual expenses. And the first thing the City Manager says is they are not willing to explore any cuts to their largest monthly expense.

          1. Matt Williams

            Well said Sam. Another perspective that people need to understand is that some of the things on that list fall into a category of “nice to haves” (most notably the new Sports Park). We need to address the deferred maintenance of our existing infrastructure beforewe go out and spend money on new toys.

            To put the Sports Park into the same kind of personal terms that you used above, it is the same as if you have an unpaid $500,000 balance on your Visa/Master Card/American Express, you don’t go out and buy a new $101,500 Tesla Model S Roadster using credit, when you have several recent model automobiles already available to you in your garage. Of course it is a lot of fun to drive the Tesla instead of the Toyota/Lexus/Mustang/Camaro. The Tesla is definitely nice to have, but making that discretionary purchase on credit when you have such a large existing unpaid balance is fiscally responsible.

            We need to pay our bills. That is a message that real people with real bills of their own can relate to

  4. Tia Will

    Sam and Matt

    Ok ,let’s play out your analogy a little further.

    Let’s say that it is  not a Tesla but rather a wheelchair enabled van that is necessary for one of your family members to remain active, healthy, and engaged in the community ?

    Does that change your perception of your budgetary priorities ? Because that is how I perceive adequate sports facilities. Not as a luxury, but rather as a necssary component of a healthy community.

    1. Matt Williams

      Tia, we have an abundance of sports facilities currently. Starting in the West we have the 10 soccer fields of the Davis AYSO (American Youth Soccer Organization) complex on Chiles. Then there are the fields at Community Park, the fields at Nugget Fields, the fields at Walnut Park and the fields at Mace Ranch Park. Baseball has both Playfields Park on Pole Line and the complex between F and H at Covell and Slide Hill Park, to name just a few. Cricket is competitively played most weekends at Patwin School.

      I could go on and on. Are those sporting fields perfect? No they are not, but they are abundant. Like the roads in Davis they have suffered from deferred maintenance, but perhaps it would be good to first maintain the abundance that we have rather than discard those fields as not shiny and new enough, and replace them with a new complex.

    2. Sam

      Tia,

      The city is going broke and can’t pay for the things it is already providing. Telling me how important a new pool, soccer field or cola raise is will not change that fact.

      1. Tia Will

        Matt

        it would be good to first maintain the abundance that we have rather than discard those fields as not shiny and new enough, and replace them with a new complex.

        My comments are not specifically in support of a new “complex” regardless of whether that might be located, whether at one site, or “distributed”.  The ability to provide a long list, whether well maintained or not, is not proof of abundance or even adequacy whether one is listing playing fields or streets. I am quite sure that I could provide a list for you of streets in Davis ,some heavily used, some not so much so. That would in no way prove that the number of streets in Davis is adequate for the number of people wanting to use those streets. What was true when my kids were involved in Davis sports, and what I feel is probably equally true today, is that the fields were all fully utilized. With a growing population as we have, we will have increased need for pools and playing fields just as we do for roads.

        And as for the comment that “we all grew up just fine” in its many variants, I disagree. You, as an individual may have done so.  But as a society, we did not all grow up fine. 1/3 of the United States population are obese, defined as a BMI over 30. Americans as a group are more sedentary than the members of any other comparable country. As of 2012, 17 % of children qualify as obese according to the CDC fact sheet on obesity. The collective “we” are not doing just fine in the area of establishing and maintaining the active lifestyles necessary for our health. Davis is doing much better than many other communities. But it has done that by choosing to meet the physical activity needs of our population. I do not see these needs as a luxury, but rather a necessity as we grow.

         

        1. Matt Williams

          That is a different matter Tia … and an evolution away from its original point, which was whether the proposed incremental Sports Complex fell into the “nice to have” or “needed to maintain” category from a fiscal perspective. Anon’s point has always been we need to make prudent decisions about maintaining what we have before we consider the nice to have items.

          With that said, you make the point that with a growing population as we have, we will have increased need for sports facilities. I believe a comparison of the 2000 Census and the 2010 Census population numbers does not support your point. City-provided sports facilities are (for the most part) used used at differing levels by the different demographic cohorts.

          — The group of children in Census ages 0-19 are heavy users
          — The group of adults in Census ages 25-54 are heavy users.
          — The group of Davis residents in Census ages 20-25 are much lower users of City-provided sports facilities because their peer-to-peer sporting activities take place for the most part on the UCD campus and at UCD-provided sports facilities.
          — The group of Davis residents in Census ages 55 and up are also much lower users of City-provided sports facilities. For them, competitive sporting activities at sports facilities have been replaced by fitness activities that happen more often in private fitness facilities and/or the Senior Center.

          When you look at the Census data from 2000 to 2010,
          — The overall Davis population grew by 5,314 residents
          — The group of children in Census ages 0-19 shrank by 867 residents
          — The group of adults in Census ages 25-54 shrank by 1,540 residents
          — The group of Davis residents in Census ages 20-25 grew by 3,502 residents
          — The group of Davis residents in Census ages 55 and up grew by 4,219 residents

          That evidence supports an argument that Davis actually has a shrinking demand for City-provided sports facilities rather than a growing demand.

      2. Tia Will

        Sam

        There are more than just one fact in play.

        As many have pointed out with regard to the total city deficit, just because costs are not visible to us, does not mean that we do not pay for them. Just because you do not receive a bill for the increased obesity related health care costs of the other members of your community does not mean that you are not paying for them. There is just no accounting, so you don’t know what it is costing you. 

        For any one interested, I would recommend the paragraphs on both direct and indirect costs of just one inactivity related and almost completely preventable disease, Type II diabetes. This data is old and so likely greatly underestimates the actual costs today, but illustrates the point well.

        http://www.who.int/mediacentre/factsheets/fs236/en/

        1. Sam

          So in an article about the public being unaware of the financial crisis the city is already in you are referencing an article about the worldwide cost of diabetes. I didn’t see anything in the article about how 25 yard pools, miles of bike paths and having only two soccer fields per 10,000 residents caused diabetes.

          I think the title of the article should be changed to “Even after being shown how poor the city’s finances really are, the people don’t see any need to make any changes”

  5. Tia Will

    Matt

    I appreciate your thoughtful approach to data with regard to the need for increased sports facilities. I am wondering how the anticipated changes in population brought about by the Cannery play into your assessment.

    1. hpierce

      If you look at all the parks, school playgrounds, turf in town, and how often they are actively used, the greenbelt etc., added by Cannery, the increased population is indeed trivial.

      Walking and bicycling are good activities to avoid “lack of exercise”.  To the above facilities you can add all the sidewalks and bike lanes in town.

      We don’t “need” a new sports complex.

      Plenty of opportunities in town for folk, particularly children, to have opportunities for active exercise and active play.  Lacking a new sports complex cannot be honestly be linked to increased risk of Type II diabetes.  Please think.

    2. Matt Williams

      Tia, since those Cannery-driven changes are not as yet reflected in the Census data, the simple answer is that they do not play into the data assessment I shared.

      However, one can gaze into a crystal ball a bit and speculate on what the 2020 US Census might look like.

      — The Cannery population will be in the vicinity of 547 units times 2.8 residents per unit or 1,500 residents, so the total Davis population would go from approximately its 2010 level of 65,622 to a bit more than 67,000.
      — When you add in other projects like Chiles Ranch, let’s say 68,000.
      — UCD’s 20/20 initiative’s is going to dump as many as 5,000 additional students in the 20-25 year-old age cohort
      — The 55 and over age cohort will continue to increase like it did in the 2000 to 2010 period.

      Taken together, those factors mean that the 25-54 age cohort is going to experience continued shrinkage as the economics of multiple-student tenancies are able to out bid the single family tenancies.

      Bottom-line, Cannery and Chiles Ranch may mitigate the continued downward trend of the 25-54 year-old cohort, but I believe that the 2020 Census will again show a decrease in that cohort.

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