Monday Morning Thoughts: Why an All-Cuts Approach Won’t Work for Davis

The fiscal news for the city continues to remain tenuous at best.  This past week, some have pushed back against our analysis, arguing that it represents a “sky is falling” view.  I take issue with that for two reasons.

The first is that it implies that negative scenarios will never play out. And yet we know that the Great Recession hit with a lot more ferocity than anyone would have predicted even a month before.  We know there have been fiscal impacts from that, including some scattered bankruptcies.  And we also know that, while the immediate economic picture is improved, the state funding and local revenue continue to lag.

My second objection is even more fundamental and that is that it implies that we simply bury our head in the sand in the face of negative fiscal projections.  There are steps we can take to avert the worst case scenario – but we must take those steps.

The irony is that I have actually proposed a pretty modest middle ground as the way forward.  I have argued the need to utilize continued cost-containment strategies, including slowing down or freezing compensation growth.  Second, I believe we need a short-term revenue measure that can generate money for roads and other city infrastructure.  And third, I believe we need modest economic development which could include a peripheral innovation park.

However, I have heard from some this week that I am simply trying to justify a growth strategy – even though what I am proposing is a single Measure R project which I hope would preclude the need for more peripheral growth for the next half century.

I have heard that there will be strong opposition to such a project, as well as to any parcel tax or other revenue measure, without first doing a round of deep cuts.

Unfortunately, the situation is dire enough that cuts alone are not going to solve the city’s problems.  The city is lacking fiscal resiliency in part because its economy is limited and, as we showed once again yesterday, the city lags behind in per capita retail sales.

To make it clear, while I support cuts and many of the cost containment proposals put forward a few weeks ago by Mayor Robb Davis, a cuts-only approach is not likely to generate a lot of fruit.

To that end, the current general fund portion of the budget is about $53 million, with it perhaps rising as high as $60 million in the coming years.

If we look at the model generated from Project Toto, the city needs to figure out a way to find about $600 million in funds by year 20 of the model.  To oversimplify, those funds are needed for roads, parks, greenbelts, city buildings, and retirement funding for both pensions and health care.

The hole (some call it a shortfall) comes to about $30 million a year on average.  That means that if you cut the city budget to address that hole, the budget would have to be reduced from $53 million this year down to $23 million.  To put that number in perspective, police alone would cost $19 million in 2016-17.  Police and fire come to just under $30 million together.

While we certainly have taken aim over fire costs, police are actually compensated on the low end of the spectrum and many people believe we need to hire more police, not less.

To make matters even more difficult, on an all funds basis nearly 30 percent of the city’s All Funds Budget of $129 million goes to pensions and retiree medical liabilities.  In the General Fund that number is about $15 million out of $53 million.

In terms of the $30 million per year hole, the city doesn’t have a lot of control over it.  The pensions and OPEB (Other Post-Employment Benefits) portions of the $30 million is not controlled by the city.  Therefore the city can neither avoid these increases nor cut them.  According to projections they amount to a $4 million per year increase before leveling off in 2024.  And there is another $4 million increase for public safety in pensions, with another $1 million for OPEB for fire in 2024.

That is almost one third of the increase in funding that cannot be avoided through city actions.

Bankruptcy is not the solution.  A lot of people have suggested bankruptcy as a panacea to the city’s problems, but as we have laid out before, the problem is that bankruptcy doesn’t change the underlying condition of the city.

We are not drowning in debt.  We have obligations to our employees that will still need to be met – even if bankruptcy might allow a restructuring of labor contracts, we’re still only looking at messing with the margins.  Infrastructure needs are not going to go away with bankruptcy, nor is payment for city services.

Given the combination of $9 million for additional PERS (Public Employees’ Retirement System) and OPEB along with $15 million in current obligations, the city would have to make $30 million in cuts from the $38 million left after PERS and OPEB are cut out.

This is not an argument that we should not attempt to contain costs, it’s an argument that we need revenue measures to survive even with cuts.  That puts both a new tax measure and possibly a new economic development on the table.

That’s the reality.  The sky doesn’t have to fall, but it very well may if we don’t make changes.

—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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82 Comments

  1. Tia Will

    I have not seen anyone on the Vanguard making a “cuts only” proposition as opposed to bankruptcy. Has anyone actually proposed this to you or was this a rhetorical device to drive this article ?

    1. Matt Williams

      Tia, I know from personal (first-hand) experience that there are a few prominent members of the community whose approach either is, or closely approaches “cuts only.”

  2. Tia Will

    That is surprising to me. Just as I do not believe it is possible to simply “grow our way out of trouble”, I also do not believe it is realistic to believe that we can simply “cut our way out of trouble”. All sustainable systems of which I am aware rely on a balance of optimal size and functionality, not perpetual growth or decay.

    1. David Greenwald

      I also think it’s an important exercise to understand what you can and cannot do with cuts. What this analysis demonstrates is that what we have at this point is really a revenue problem not a discretionary spending problem.

    2. Mark West

      What is the ‘optimal size and functionality’ for a City like Davis? How is that determined? What criteria can be used for measuring and determining when we have attained that ‘optimal size?’ How do we ‘protect’ that optimal size in light of the fact that the population of the region will continue to expand and along with it the demand for housing?

      It is a complete fallacy to believe that there is some ‘optimal size and functionality’ for a City. Cities evolve continually with the surrounding environment and economic conditions. They expand and sometimes shrink as the surrounding environment changes. Putting arbitrary constraints on change will not alter the reality of that evolution, just limit the options that Cities have for dealing with problems and exigencies. That is exactly what we are seeing in Davis with our arbitrary constraints on growth limiting the options for dealing with both our fiscal and housing shortages. This isn’t an argument for ‘growing as fast as we can’ as Tia is fond of framing it, but one of encouraging evolution on many fronts to meet the needs of the City’s residents. We can grow out, up, or increase density, but if we want to truly address the shortfalls, the one thing we cannot do is just sit on our hands and hope things will get better.

      We need serious cost containment, expansion of commercial space and high-density housing, and short-term tax increases. Ignoring one aspect because some don’t like it will only guarantee failure for all. There is no ‘optimal size and functionality’ for Davis, there is only a City in balance (or not) with its environment. As long as we refuse to change, Davis will never be in balance.

       

       

        1. David Greenwald

          Depends on how you define a short-term tax.  If you define it in terms of a six year tax that could be renewed, then that would be short-term.  But if you mean short term is six year and only six years, then I tend to agree with you, there is no such thing as a short-term tax.

        2. Mark West

          In my opinion, the only reason to increase taxes is because of the delay in bringing economic expansion projects to fruition. If we expect that a new project will add $5 million in new revenue starting in year 5, then it is reasonable to pass $5 million tax increase that sunsets in year 5. The short-term tax act as a bridge until the economic expansion is a reality.

          Tax increases that are proposed without any underlying effort at economic expansion will be permanent, even if sold to the public as a ‘temporary’ tax.

        3. Keith O

          It doesn’t matter how it’s proposed or whatever semantics are used, once the city gets its claws on tax revenue it will never go away.  It will either be renewed or the city will propose another tax to take its place and threaten us with the loss of police, fire, parks and other amenities if it doesn’t pass.

        4. David Greenwald

          While I hear you Mark, I don’t see that the community is going to support enough development to handle this shortfall without a tax increase.  But we’ll see.

        5. Mark West

          “I don’t see that the community is going to support enough development…”

          There is a contingent in town who are working to make Davis an enclave for the wealthy and retired. Their mission is to keep Davis ‘the way they like it’ so they may enjoy it for their remaining years. They don’t care about the impacts on anyone else, or about the future of the City (though they will claim otherwise) for the simple reason that they will not have to be the ones to pick up the pieces or pay for the restoration. These folks advocate for more taxes and against change, the former because they are wealthy and can afford it and the latter because they see a Davis that meets their personal criteria for ‘optimal size and functionality.’ Unfortunately, the demographic shift that has occurred in response to their decades long ‘no changes’ agenda has made this wealthy & retired faction the major force in our elections, perpetuating the problems for everyone else.

          What I expect to see are more taxes and no significant economic expansion, which will lead to our eventual date in bankruptcy court. I don’t see bankruptcy as a desirable goal to be worked for, but the obvious outcome of the short-term thinking of the selfish. In my view, if we are going to end up in bankruptcy court, we should do so as quickly as possible so we can start the process of picking up the pieces and restoring a City that meets the needs of all residents, not just those with significant disposable income.

        6. Howard P

          Mark, re: your 9:39 post

          There was another community who basically did the same things, back in the late 60’s early 70’s… it was, (literally and figuratively) Paradise.

  3. Dianne C Tobias

    With all respect Mayor Davis has campaigned for and spoken for an all city assessment of optimal staffing.

    Where are we with this? He and others have stated that many previous cuts were from attrition which does not necessarily yield optimal competent and efficient staffing.

    What’s the timeline for such an assessment or did I miss it?

    1. Howard P

      Dianne… the assessment of organizational ‘rightsizing’ is indeed critical… but there are some challenges in doing such assessments, which include ‘who does it’?  

      An outside consultant will need to be paid, and will either need to lean heavily on staff to get a handle on the Davis situation (where those interviewed will probably be biased to make sure their role is ‘mission critical’, or come up with a ‘one size fits all’ solution, based on their own biases.

      The City has done such studies frequently in the past, usually department by department, like every 2 – 3 years (one department/cycle).  Results, were mixed… rarely were positions deemed ‘disposable’, and the more articulate employees interviewed by the consultants sometimes got recommendations for reclass to higher compensated positions.

      A completely internal review has similar problems if not more so.  Particularly when management folk would be ‘supervising’ the review, and if an honest review indicated that there were too many managers… might work if those doing the review were guaranteed ‘amnesty’, and their position wasn’t downgraded/eliminated, until they had moved on.  There is a credible account, that when Prop 13 hit, and employees were told to come up with savings, the Personnel Director saw that there would be few if no hires, and advocated elimination of her own position.  But she was already ready to move on.

      A possibility would be to engage former city employees, with perhaps a nominal stipend (or like John Meyer did, pro bono) to do a knowledgeable review, with much less chance of personal bias.

      But, the review and willingness to act on a well-done review is VERY important.  But not simple.

      A corollary… ‘succession planning’… hasn’t been done anywhere near enough… there, a manager might be able to steer the organization towards right-sizing, and then mentoring lower level folk to perform the crucial tasks… evolution rather than revolution…

      1. Dianne C Tobias

        Thx Howard. Agree not simple and difficult to be objective. Hope Robb can weigh in on his ideas as we progress through his tenure. I believe he will be the impetus this time around.

        I remember Don Saylor remarking and showing the org charts as having multiple supervisory titles and relatively few people being supervised. Do you remember?

        1. Howard P

          Not that, specifically.

          Another “problem”, which is now fading, but important historically (how we got here)… when Davis was comparing to similar agencies for compensation, other agencies were ‘promoting’ or re-defining, folk to Mgt., even if they supervised no one… partly to avoid overtime, partly to increase compensation to attract and retain the “best and brightest”.

          That resulted in several professional classes in Davis getting “no comps”, as the folk in HR would not compare two identical positions, with identical qualifications, identical tasks/duties, if one was classed “mgt”, and the one in Davis wasn’t… one Dept decided to redefine their professionals as Mgt… one Dept did not, because of that org chart thing.

          One of the problems with local agencies is that “the rules” basically prohibit ‘pay for performance’… so, in order to compensate a highly productive, intelligent employee, particularly in the professional classes, where they have choices as to employers, you have to ‘promote’/reclass them.  Not saying it’s right, am saying it’s real.  Many of the really good ones got promoted to their ‘highest level of…’

      2. Howard P

        And without naming names, can think of at least a half dozen positions in the City where if the occupant ‘disappeared’ their tasks could easily be done by lower level employees.  No loss in service to the public… Most were beneficiaries of the Peter Principle… people promoted to ‘management’, where their skill set could easily be met by supervisory and/or ‘line’ folk… at much lesser compensation… and in at least one case, the entire function could disappear, and maybe 1000 folk in town would notice/care…

      3. Alan Miller

        WOW, re:  Howard P.’s outlining of the process —

        Having worked in state government, for the university, for myself, and for private companies, I must say that these same processes that take years and produce no results are achieved in private industry, sometimes overnight.  Not without quite a bit of pain, but certainly much more efficiency.

        1. Howard P

          There are advantages to doing organizational reviews in the private sector… as I’ve heard from those in the private sector, in making the decisions to right size/right compensate you have fewer constraints as to seniority/bumping rights, down-classing, etc.

      4. Richard McCann

        Howard P

        There is a third way, using local citizens (see my article on Citizen Analysts). We already have all of the analytic horsepower within the city to do this work, and still not rely on the staff. These citizen analysts will understand the context better than anyone else, perhaps even staff. We probably should consider paying them if it involves substantial work.

        1. Howard P

          It could work, if they were knowledgeable about City operations, and very few are.  But it has possibilities… would worry if they viewed it as a table-top exercise, just based on org charts… might be worse than the attrition method… much worse.

          Perhaps a ‘blended’ approach… citizens (hopefully vetted as to pre-conceived agendas), ‘veteran’ employees, with a bit of consultant assistance. That might be a good formula…

  4. Ron

    Other cities and counties in California (including those nearby) have the exact same challenges as Davis, but have no comparable “growth controls”.  In fact, many of these communities welcome every “opportunity” that comes their way, but still haven’t addressed the underlying issues which create the challenges.

    In the meantime, those communities still look “outward” for a solution, even if market demand isn’t there.  And, some are trying to convince us to follow that failed model.  Do you honestly think that they have the best interests of Davis, in mind?

    Again, what happened to the “innovation center” planned for Woodland (which also apparently includes housing – even in housing-rich Woodland)?  And, regardless of that proposal, why haven’t the surrounding communities already successfully recruited such a center?  Why haven’t these types of proposals already saturated nearby markets/communities?

    In any case, keep screaming about the roads,etc., even if others can’t see the problem. (Or, at least don’t see the same “solution”.)

     

     

    1. Don Shor

      what happened to the “innovation center” planned for Woodland

      If you’re genuinely interested, here are the contacts in Woodland. http://www.cityofwoodland.org/civicax/filebank/blobdload.aspx?BlobID=12291

      why haven’t the surrounding communities already successfully recruited such a center?

      I suspect you haven’t looked at any of the surrounding communities.

      keep screaming about the roads,etc., even if others can’t see the problem.

      I wonder why others can’t see the problem.

      1. Ron

        Don:  “If you’re genuinely interested, here are the contacts in Woodland.”

        My personal interest isn’t relevant.  However, it is of interest to Davis, as a whole.  (Especially if there’s an effort to create a “duplicate” development in Davis.)  If it’s not viable in Woodland (even with housing), why is it viable in Davis? (Again, Woodland’s border is about 5 miles from Davis’ border.)

        Don:  I suspect you haven’t looked at any of the surrounding communities.

        Well, your suspicions would be wrong.  Again, why wasn’t the “demand” for an innovation center satisfied by “Welcoming Woodland”, years ago?  (Or, in any of the other nearby communities – e.g., West Sacramento, Dixon?)  Also, why didn’t the developers of MRIC pursue a commercial-only proposal (as originally planned), when the opportunity was clearly there for them to do so?

        Don:  “I wonder why others can’t see the problem.”

        My guess is that “Project Toto” hasn’t created enough graphs, yet.  🙂  But, in all seriousness, perhaps residents understand that road maintenance is a statewide concern, and that the road don’t seem much different in Davis.  (Also, roads elsewhere are generally higher-speed, in which case road maintenance might be a bigger concern.)

  5. dan cornford

    I want to echo a central point that Ron has been making for several days since it is one that is rarely made:  Yes,  Davis is not alone in having acute fiscal problems by a very long way due to unfunded pension obligations.  I’d be so bold as to say that there are few towns and cities, not only in California but across the nation, that do not have this problem.

     Likewise Davis is no more alone when it comes to having a deficit when it comes to infrastructure maintenance and improvements such as roads et al.  Moreover, it might be noted critics, or fiscal hawks, rarely point out that Davis, unlike many other cities and towns has new, even state of the art, water and sewage treatment facilities, which residents see abundantly reflected in their city bills.

    But to read and listen to Mayor Davis and his disciples, one would never know this.  He, and others fail, unfailingly, to contextualize Davis’s fiscal crisis.   They almost totally neglect to point out that the State of California does provide localities with funds for roads and other infrastructural needs, as it always has.   Yes these funds may be insufficient for Davis and other communities, but this is a battle that Davis and other towns and cities need to take upon with the State (and even with the Feds) as few cities or towns can maintain and improve their infrastructure without significant state (and federal aid)—and that is the way it has always been.

    Likewise it is totally unimaginable that Davis can take  steps that meaningfully address the unfunded pension liabilities any more than small towns and states could address their fiscal and economic crisis in 1932  (The Great Depression) before the New Deal.

    In failing to put things in this broader context one cannot but help wonder if Mayor Davis and his allies are using the so called Davis fiscal crisis to promote growth projects like MRIC, not to mention many other ongoing or in the pipeline projects/developments none of which promise in any significant way to address the fiscal gap, and may indeed only add significantly to that fiscal gap as the cumulative infrastructure costs (often not adequately factored into an EIR by design or neglect) mount up.

    While the stance that Davis and the  Council have taken against vis-a-vis the LRDP  is at face value admirable,  how it is consistent (and credible) for them to express profound concerns to UCD re the infrastructural impacts of UCD’s LRDP  while, approving,  promoting, and at least potentially enabling projects that will have very similar impacts  on this modest sized city?

    These impacts include massive traffic and parking issues besides other environmental ones and, to repeat, are likely to cause even greater infrastructural deficit issues in the future thus only aggravating the city’s fiscal woes and further diminishing the quality of life for most Davis residents.
     
    I am truly baffled by this contradiction.  I do not think Ron and I are alone, and, as has been stated by people on both sides of the Nishi proposal, Nishi went down largely because of the concerns I express above.

    1. David Greenwald

      Why do I feel like we’ve come full circle on these arguments.

      The irony is I know Dan Cornford was a big supporter of Sue Greenwald – and Sue would not have agreed with you on this:

      http://www.davisvanguard.org/2009/12/mayor-and-council-cut-off-debate-on-fire-contract/

      http://www.davisvanguard.org/2007/10/city-retiree-medical-benefits-smart-financing-or-voodoo-economics/

      Also this:

      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.

      1. Ron

        David:

        Without reading your referenced articles (for the moment), you’re arguing that the city of Davis (as well as other cities and counties throughout California, and the state itself) should have listened to folks like Sue Greenwald, before it was too late (and ultimately created system-wide challenges)?

        Well, from what I understand, “I’ll drink to that”. (Got to run, for awhile.)

        1. Howard P

          It was hard to listen to Ms Greenwald, due her tone and rhetoric… and her hypocrisy… had she parsed things differently, she might well have been more effective.

          As to the H-word… she wanted to end retiree medical, except maybe for supplement to Medicare, assuming the employee qualified (many didn’t) and attained the age of 65, but made damn sure CC members had full retiree medical, irrespective. [according to sources who were part of that]

      2. Matt Williams

        David asked an imaginary poster . . . “Why are you not reading the referenced articles?”

        Why are you asking rhetorical questions?

        Yes, Sue was saying the right things.  Her content was not the problem.  Her conversational style was her biggest enemy.

        1. Ron

          I understand that the “other” problem that Sue had was that she was “targeted” by those groups whose self-interest would be impacted by her goals.  (The “conversational style” made her an easier target.)

          In general, the amount/level of retirement benefits for public safety workers (including prison guards, I believe) was a complete scam, statewide.  Absolutely no reasonable justification to get 90% of highest salary, starting as early as age 50. (Especially since they are already generously paid to begin with. Not to mention overtime that was readily approved, which added to the problem.)

        2. Howard P

          I assume you’ve done the math Ron, but just to be sure… you’d have to be a full-time public safety employee, at age 20, to get 90% at age 50… right?  And if you worked until age 75, it would still be 90%… you knew that too, right?

          And you knew that if a PS employee wanted to make sure their spouse would continue to receive the full pension, they’d take about a 7% cut in their pension, right?

          And you do realize that new employees are not offered 3% @ 50, right?

          Am not saying it was a good move by the City, but unless we change the laws, and interpretations thereof, that ship sailed.  Or do you propose changing the laws?  Retroactively…

           

        3. Ron

          Hi Howard:

          Yes – I knew those things (with the exception of the spousal reduction).  Actually, I didn’t realize that spouses could receive a full benefit, that way.  (Even a worse situation than I thought.)

          I’ve had several relatives in public safety careers.  (One was killed on duty by a drunk driver, before I was born.)  I believe that the relative who is still alive agrees that the system was “quite generous”.

          Glad that the system has changed, going forward.

           

           

    2. Robb Davis

      Dan – You must have missed my SWOT analysis in which I said a great strength of the city is its new, state of the art, water and wastewater infrastructure.  I have called them the envy of most cities in the state.  So… I have not been all about the challenges.  I have called out our strengths.

      Your question about whether I am using the challenges as a way to push MRIC (or other projects) is interesting. I can categorically state that I am not doing that at all.  Such projects stand of fall on their own merits and I am not the kind of elected official who attempts to create pretexts to do something else.  That is simply not how I operate.

      Finally, I hear you on the role of the state in helping solve our challenges.  I wish they would do more.  I guess I understood when I was elected that I was being asked to face the real challenges we have, given the constraints, and try to find workable solutions.  I am a bit surprised that citizens would want me to wait for a rescue that may never come.  I was not elected to wait.  I was elected to lay out the challenges and seek solutions–given the resources at our disposal.

      1. Howard P

        Robb… it has to start with self-help, prioritization, etc.   To think that the State (often with weird strings attached) can ‘bail us out’ is laughable.

        But, it doesn’t hurt to get resources wherever they may come from.

        Stay the course, with CC, turn up the effort, thru CM and mgt staff.  There is work to do, particularly organizationally…  am looking optimistically… “this, like a kidney stone, may pass”… still requires medical monitoring…

      2. Roberta Millstein

        I am a bit surprised that citizens would want me to wait for a rescue that may never come.  I was not elected to wait.  I was elected to lay out the challenges and seek solutions–given the resources at our disposal.

        Robb, right.  We don’t want you to just wait.  But we could be banding together with other localities and strongly advocating that the State do more.  Please correct me if I’m wrong, but I just don’t see much of anything in the way of pushback or organized pushback.

        1. Robb Davis

          Roberta – we have banded together with the entire League of CA Cities to request changes to road funding formulas, to address our roads.  We are MOST definitely engaged in lobbying for that and have sent letters of support for pending legislation to our local Assembly and Senate members.

          As far as employee compensation, the League is also working on alternatives to OPEB and medical care.  We have not actively supported it but that is because there is nothing to support at this time “legislatively.”

          We are definitely engaged to find solutions at the state level.  I am afraid the federal level may be a lost cause at this point.

        2. Roberta Millstein

          Robb, thanks for that information.  That is very good to hear.  I hope the League finds some solutions to compensation issues that are worth advocating for at the state level.  Agreed that the federal level is a lost cause for the immediate future.

        3. Roberta Millstein

          Robb, one other note.  Please don’t be afraid to engage us, the citizens of Davis, in helping you to lobby.  All we need is some info to get us started.

        4. Howard P

          Roberta… Robb is open to engaging citizens… and has, consistently… including those Davis citizens who are or were, City employees.

          I respect that in him… he pretty much listens to everyone, thinks, and acts. But he is ‘beholden’ to none… it grieves me that he plans to end his CC service when his current term expires. Wish I could change that tack…

        5. Roberta Millstein

          I respect that in him… he pretty much listens to everyone, thinks, and acts. But he is ‘beholden’ to none… it grieves me that he plans to end his CC service when his current term expires. Wish I could change that tack…

          Look at that, Howard.  You and I agree on something.

        6. Howard P

          BTW, it is nobler to seek ‘engagement’ rather to wait for an “invitation”… Robb is not afraid… but it would be helpful if someone came forward, rather than waiting for the ‘invite’.

          Just a thought…

        7. Roberta Millstein

          BTW, it is nobler to seek ‘engagement’ rather to wait for an “invitation”… Robb is not afraid… but it would be helpful if someone came forward, rather than waiting for the ‘invite’.

          Funny, I thought I just did exactly that.

        8. Ron

          Roberta:

          Once again, you’re leading the way toward a solution.  How refreshing, given that many of us (myself included) sometimes focus on the negative.

          Thank you!

        9. Robb Davis

          Here is the link to our letter on AB1 and SB1 which concern state funding for roads/streets.

          http://documents.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/20170124/04I-AB1-and-SB1-Support-Letter.pdf

          I would encourage people to contact Dodd and Aguilar-Curry to encourage passage.  The SacBee article referred to elsewhere shows that this is going to be a lift.  While I might wish for a different approach, this is what is on offer right now.

          As the CC discusses projections, cost containment and potential revenue measures over the coming 2 months, I would strongly encourage people to read the reports and provide us with your input.  When we get fiscal issues before us it is unusual to have even a single public comment (in my experience).  Digesting the projections and reports on cost containment and revenue, and then coming to comment and provide input are critical to the CC and I hope folks will come out and let their opinions be heard.

           

        10. Ron

          Robb:

          Since you’ve asked for input (and might still be reading this), I’d like to offer the following:

          I think that solutions going forward will take some time to implement.  (Definitely beyond your term, and probably for years to come.)  I don’t think it’s necessary (or remotely possible) to immediately resolve all concerns that are 20 years out in the future, for example. And, I do believe that the state will eventually be forced to deal with some of these concerns, regardless of the choices that Davis makes.  (For example, I posted an article above, regarding a renewed effort to tax motorists directly, for local road and highway maintenance.)  The same is true for unfunded pensions – for cities and counties throughout California, and the state itself.

          In the meantime, I appreciate your efforts to work with other cities, and to implement cost-savings measures within the city.  (Including an examination of personnel structure, etc., to ensure that services are delivered in an efficient manner.)  I do agree with Dan Conford, that many city employees are actually not overpaid (especially those who don’t work in public safety).  I also hope that any possible changes are implemented in a manner that doesn’t negatively impact morale, if possible.

  6. Ron

    One other question I have, regarding development (in general).  Would the additional traffic (e.g., including heavy truck deliveries and auto traffic that a major commercial development would generate) be considered, regarding the additional need for road maintenance (created as a result of the development)?  (In other words, is this cost generally included in calculations?)

    I just thought about it, due to all of all the “hand-wringing” regarding road maintenance costs.

    1. Howard P

      Depends what you mean.  Within the new development, and the abutting roads, additional pavement constructed would generally designed to reflect a ~ 40 year design life.  Heavy trucks are much more significant than “auto” traffic, and buses even more so.

      If you mean ‘impacts’ to incremental traffic farther way (1/4 mile or more), generally no.

  7. dan cornford

    David,
    The logic of your argument is utterly baffling.  Yes, among others, I did support Sue Greenwald, but I was not as it happen a major donor or worker for her campaigns.   I fail to see what is “full circle” and maybe you can explain that.  The fact that Sue Greenwald pointed out years ago that the city had a major deficit issues in no way contradicts or begins to address my point re the larger forces that have produced fiscal deficits in almost all cities and towns in CA and the US. 

    I cannot believe that Sue would dispute this, or anyone for that matter who reads current affairs and numerous articles about this issue statewide or nationally.  And I’d dispute Sue or anyone who does disagree with this POV.  This does not mean that I, or certainly a council member like Sue, should not pay attention to genuinely wasteful spending,
    But I do not want to see things taken out on low to medium paid city employees unlike apparently you and many contributors to the DV.  At no time in my life would I have entertained   the idea threat public employees should get 3% at 50.  That, on many grounds,  is quite absurd and people like Michael Harrington (I do not know what Sue’s position was, and she like Mike may have been duped or plain  wrong) that were sold this deal while on the council now realize it.
     
     
    But bottom line, David you fail in any way to address the argument that Ron and I make re the structural, institutional, and historical factors that have made for massive budget deficits save perhaps for the absurd 3/50 formula that public safety workers get that only in part account for these deficits. May I ask you then: Would you be in favor of an initiative that rolled back that formula at the state level, or such action by the California state legislature?  I’ll bet you won’t answer that question! 

    Instead you’ll continue to argue for cutting back the salaries of modestly and poorly paid city workers and their pensions.  Are you really telling readers that Davis and cities and towns across America can balance their budget in the longer term if they pull their socks up and engage in a little retrenchment. If so the California Republican party has got new life in unexpected guises.

    1. David Greenwald

      I was in favor of the initiative put forward by the San Jose Mayor. But my view, as I have argued here in many articles is that Davis created its own problem. They did so not just by 3% at 50, but the 2.5% at 55 for non-safety workers. There was the massive pay increases in 2004 and 2005 right after the council pleaded poverty and begged for a half cent sales tax. There was the failure in 2009 to 2011 for the council to take corrective actions – they balanced the budget by attrition, they failed to asked for serious concessions in 2009 (what Sue is complaining about in the link) and they basically survived by deferring maintenance on infrastructure – those were all conscious choices that produced what is now a looming crisis.

      Actually, I argued the opposite here in this article – that we can’t simply fix this through cuts, that was the whole point of this article.

    2. Howard P

      Like many, it seems you are careful to imply all City employees get the “3% @ 50” deal… without saying it, but implying it.  That was restricted to Fire and Police…

      New hires since 2013, unless they had previous PERS service is now:

      Public safety:    2.5% @ 57

      Miscellaneous:  2% @ 62

        1. Howard P

          Not sure that’s correct David, for new hires… that was a State mandate, not subject to negotiation… therefore am 90% sure it applies even for DCEA and Fire.  Again, we’re talking folk hired Jan 1 2013 or later… no current recruitments in those two bargaining units, so can’t be positive at a higher level…

    3. Howard P

      Would you be in favor of an initiative that rolled back that formula at the state level, or such action by the California state legislature?

      Uh, it has been rolled back, unless you mean retroactively for those currently (prior to 2013) in the system, or already in retirement.  Is that what you mean should be done? Retroactively?

       

  8. Jim Frame

    Yes,  Davis is not alone in having acute fiscal problems by a very long way due to unfunded pension obligations.  I’d be so bold as to say that there are few towns and cities, not only in California but across the nation, that do not have this problem.  Likewise Davis is no more alone when it comes to having a deficit when it comes to infrastructure maintenance and improvements such as roads et al.

    Misery loves company, but it’s still miserable.  Anyone who thinks the state is going to bail local agencies out of their pension, OPEB and infrastructure backlogs must have slept through the Great Recession.  Those go-go days are gone, boys, and they ain’t comin’ back, at least not for a good long while.

    Waiting for a white knight is for fools.  “When you find yourself in a hole, the first thing to do is stop digging.”  We need to control costs and raise revenue.  The former may involve employee reductions, if a reliable analysis points to that.  The latter will almost certainly involve a tax of some sort, and if a smart development can carry some of the load, I’m open to that, too.  (The hard part is getting a majority of voters to agree on what constitutes a smart development.)

     

    1. Don Shor

      Thank you. I think it’s time for a reality check on what the state can do for municipalities. Past contracts can’t be voided. CalPERS probably won’t achieve the rosy investment goals they’ve cited for years. The state isn’t going to back-fill pension costs. Road funds may come in from the state, but not enough to cover the backlog. Counting on funds from the federal government would be pretty foolish right now.
      So in my opinion looking for outside help to resolve fiscal problems of the city’s own making is actually irresponsible. Certainly worth pursuing reforms and grants wherever possible. But when that part of the discussion becomes a deflection from the real road conditions and pension costs, it’s a diversion from the choices that really have to be made.
      This is part of why I endorsed Sue for re-election last time around. I’m glad to have some council members publicly pushing for realistic budget and economic development decisions. I join with those who regret that Robb has stated he will not be running for re-election, and hope some can perhaps dissuade him from that decision.
      A realistic solution to the current problem involves a three-pronged strategy of increased revenues, managed costs, and economic development.

    2. Ron

      Jim (and Don):

      I might agree with you, if Davis was facing these challenges alone.  However – as you know, it is hardly alone.

      CALPERS has already “proven” that it will “help” cities, by artificially manipulating its expected returns.  It did so during the Great Recession, and it’s still doing so today.  (Perhaps they did so out of self-interest, to avoid forcing even more cities into bankruptcy.)  You might argue that this type of “help” is making things worse – and you’d be right.  However, given the scope of the system-wide challenges, all it’s going to take is a long-overdue stock market correction for the problem to be laid bare, for all to see.  I do not know what will occur, at that point.

      Regarding road conditions (again, a state-wide concern), I suspect that at some point, the Democrat-controlled Legislature and Governor will indeed pass these costs onto motorists.  (See my link to the Sacbee article today, and Robb’s posting regarding the city’s response.)

      If anyone thinks that some type of MRIC development is the “cure”, I’d simply ask how that’s working out in Woodland (or any surrounding community), so far.  The MRIC developers have had plenty of opportunity to pursue a commercial-only development, but it appears that the demand is not sufficient. (Of course, there’s a “demand” for housing, but that’s hardly a cure regarding financial challenges. In fact, housing is generally acknowledged to be a long-term money loser, for cities.)

      I am much more aware of the financial challenges that Davis (and other communities) are facing, but am also quite ready to oppose any ill-advised peripheral developments.  Given that average Davis voters are probably less aware than I am, what do you think the chances are that some type of ill-advised peripheral development will be approved? (Especially when the city is not totally in control of costs?)

      1. Howard P

        Why did you add the qualifier “ill-advised”?

        quite ready to oppose any ill-advised peripheral developments

        You know that the sentence is equally true without it, right? Or, have I misunderstood…

        1. Ron

          Howard:

          I have stated a number of times that I would (personally) probably not oppose a commercial-only development.  (Actually, I understand that a number of “slow-growth” types had previously been involved in encouraging a commercial-only development, to provide a better balance between commercial and residential development within the city – to help with city finances.)

          But, at this point, I’m just as happy (and perhaps more so) if we don’t see any peripheral development proposals at all, for awhile.  On a related note, I’ve since learned more about the scope of the challenges facing California. (By the way, Dan Conford is right – there’s very little discussion on the Vanguard, regarding the scope of the financial challenges throughout California.  And yes – it matters, unless one believes that Davis is not part of a larger system. I don’t mean to criticize, but the Vanguard often reads like a “soft-core” version of a Chamber of Commerce agenda.)

          Signing off, for awhile.

      2. Don Shor

        I might agree with you, if Davis was facing these challenges alone.  However – as you know, it is hardly alone.

        and cities are taking various approaches to the problem, including tax increases, development, and cost controls.

        … However, given the scope of the system-wide challenges, all it’s going to take is a long-overdue stock market correction for the problem to be laid bare, for all to see.  I do not know what will occur, at that point.

        The city got itself into this predicament by approving pay increases and long-term costs it couldn’t afford. The city, like others that did so, needs to start getting itself out of the situation. The fact that other cities were also foolish doesn’t mean the city leaders should just continue with business as usual, waiting for some kind of bailout.

        Regarding road conditions (again, a state-wide concern),

        Davis roads are in the worst condition of any city in Yolo County.

        I suspect that at some point, the Democrat-controlled Legislature and Governor will indeed pass these costs onto motorists. 

        All? Most? Unlikely. Some of the costs? Maybe. Again: no excuse for inaction by city leaders.

        If anyone thinks that some type of MRIC development is the “cure”,

        Economic development is part of a balanced strategy. If it’s not included in the three-prong approach that several successive city councils have been discussing since about 2010, then that just puts more pressure on the other prongs. More budget cuts, higher tax increases. It’s not a cure. It’s part of a prudent strategy.

        I’d simply ask how that’s working out in Woodland (or any surrounding community), so far. 

        How familiar are you with Woodland’s budget? Or is this another thing that you aren’t actually interested in knowing the answers, but are just asking rhetorically?

        …. what do you think the chances are that some type of ill-advised peripheral development will be approved?

        I’d say about 51:49. Just hope to flip the numbers the other way around from what Nishi got.

        1. Ron

          Don:

          I’m still up, for the moment.  Wanted to see if anyone might respond.

          If you believe that the numbers can be “flipped around” based on the Nishi results, you’re mistaken.  Other than access (and possible air quality) concerns, the Nishi site (in my opinion) was not nearly as undesirable for development as the distant MRIC site. (However, I also understand that both proposals totally lacked any Affordable housing. By the way, did you see the article on the Enterprise over the weekend, regarding the popularity of Affordable housing at Grande, etc.?) 100 people showed up.

          I’m somewhat reluctant to say this, but I’m almost looking forward to a fight, regarding MRIC.  I’ve had it with those who keep pushing for it, day-after-day, on the Vanguard.  Like I said, all that the supporters need is a few more “charts” from Project Toto, and you’re in!

          1. Don Shor

            However, I also understand that both proposals totally lacked any Affordable housing.

            My political assessment is based on a commercial-only proposal for MRIC. I consider the chances of the voters approving a project proposal at that site that includes housing to be very close to zero.
            Affordable Housing is popular. It is also very, very, very inefficient and doesn’t meet the city’s need for affordable housing.

        2. Ron

          Don:

          “Built into” your statement is that we always have to be building something.  (The constant “internal needs” argument.)  There are a lot of existing apartment complexes in Davis.

          Also, I don’t think your statement is entirely true, especially when it comes to Affordable housing, and housing on campus.  (Of course, some are still working to improve/increase the latter.)

          Rentals are not necessarily limited to apartment complexes, either. (For example, the “granny units” at the Cannery.)

          I realize that you don’t think much of Affordable housing, but it appears to be quite popular, as noted in the Enterprise article, above. (Actually, I would think that some of your own employees might qualify, as well as employees at similar retail businesses.) Especially Affordable rental housing.
           

           

  9. Mark Kropp

    I am reminded of 8th grade Art class. We purchased a plain canvass and we painted. Our teacher admired our work and proceeded to paint over parts to demonstrate skills of an artist. She surprised me, but I began to see and understand. So too can our financial picture be changed. One of the hardest lessons my parents and their co-workers learned, in their case regarding the “retirement account,” was that even those so called non-negotiables and contracted by law etc are very much subject to the current economy. Metaphorically speaking, I think as our leadership, like Robb Davis, paint our budget, they too, can paint over and they need to re-negotiate and “modify” the contract.

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