Commentary: Council, Community with a Big Decision To Make

Utility User Tax

Tonight the Davis City Council will not make the final decision on what to do about a revenue measure, but the decision they make tonight will clearly inform their final decision coming right at the deadline.

I was reading a letter just published in the local paper and realized that the city continues to do a poor job of articulating in clear and no uncertain terms why it is that they are seeking the revenue measure or measures.

The letter says to “build a budget on needs, not wants.”  The discussion combines the school district’s ask that may be coming down the line with the city’s ask.

They write: “Davis school district teachers are seeking higher wages. The Davis City Council wants to decide options to raise more revenue with a possible tax to close an annual budget shortfall. Next on the list is the state seeking more revenue. Where does it stop?”

The letter mainly focuses on the school board, but I think in both cases the issues are relatively similar.  Both the city and school district’s budgets have been stretched for a long time (2008 is
a decade ago now).  You can make reasonable complaints about the management of money, but both government entities made decisions on how to keep things afloat.

For the district, those decisions focused on the preservation of schools and programs while maintaining its teacher-student ratio to the best of their ability.

For the city, they first cut through temporary furloughs and did not replace employees who left or retired.  They then balanced their budget through deferring maintenance.  Finally, they had a brief period of structural reform.

Can we complain about the choices the city has made?  We have over the years.  One of the first things the Vanguard did in 2007-2009 was point out that the compensation system was unsustainable.  In fact, we were warning this in the spring of 2008, six months before the economy of the US collapsed.

Second, we spent a good amount of time going over past mistakes, from the creation of four on an engine to the implementation of three percent at 50 to the bait and switch of the 2004 sales tax increase and the double-digit pay increase from 2005 to 2009.

Third, we pushed for structural reform.  We pushed the council to make structural changes to the budget.  To be more honest and upfront about the impact of unmet needs and deferred maintenance.  To create a two-tiered system to fix pensions and retiree medical.

Should we have gone further?  We got a lot of the reforms we needed in the 2012-2015 MOUs.  We would have preferred not to have had the COLAs that came in the last MOU, but that three percent increase represents the only pay increase that the employees have received since the 2009 MOUs expired.

That means, in real dollars, employees are taking home substantially less in 2018 than they were in 2008 when this started.

But that is only half the picture.  As Robb Davis pointed out, now two years ago, “Staff numbers have been cut by over 100 in the past decade (453 to 352).”  However, while the “vast majority of staff in the city has seen the amount of their take-home check decrease over the past five years,” the overall “cost of compensating staff has increased from just over $100,000 to over $150,000 per employee in the same decade.”

That is one of the problems that we face.  Robb Davis also pointed out that “because we have cut staff in a non-strategic way (via attrition), it is not even clear whether we are staffed appropriately to provide city services. We have a highly professional and responsive workforce—with workers taking on many new tasks due to cuts—but because employee costs represent the majority of General Fund expenses we must find ways to contain compensation.”

But in the meantime, we have another problem and that is that we are currently deferring about $8 million in costs each year on infrastructure – parks, roads, greenbelts, sidewalks, and city buildings.

We don’t have eight million dollars to legitimately cut from the general fund budget.  So we have a choice.  It is not a good choice or a pleasant choice, but it is a choice.

We can continue to defer maintenance.  Right now, the city council has scraped together about $4 million a year to pay for roads.  But we have deferred maintenance elsewhere as well.  These are not immediate bills, but as we defer maintenance, the costs will go up over time.  Or we can bite the bullet and tax ourselves now, create the funding stream to reduce our deferred maintenance and close our functional deficit.

At the last meeting, the council started leaning toward a middle ground.  Instead of biting off the entire $8 million right now, they are looking at maybe $4 million in funding.

For that plan to work, the council is going to need to be religious about cost-containment and finding ways toward economic development.  As Mayor Pro Tem Brett Lee put it, “We have to find a way to make the city’s finances sustainable.”

The city council has actually done a fairly good job of managing costs.  Right now Bob Leland projects that costs will only increase by about two percent.  That’s at most keeping pace with inflation.  The problem, as we have pointed out, is we lag on the revenue side – especially on per capita retail revenue, where we trail virtually every other city in the region and every other comparative community.

“We’re not there,” he said.  “There does need to be some economic development but on the revenue side, for tax measures.”

The proposal he put forward last week aims at about $4 of the $8 million this go around.

For Brett Lee, the key to the approach is the need not to bite off everything at once.

“I’m not sure we need to eliminate the shortfall in one go in terms of a revenue measure.  The question is of course, what percent,” he said.  “I’m sort of thinking a reasonable approach is to cut that gap by half.”

That would mean taxes that generate about $4 million of the $8 million gap between current funding and what is needed for basic levels of full funding.

Mayor Pro Tem Lee is looking at the combination of cost containment and economic development, as well as the revenue from legal cannabis, to further cut that gap and then tackle the rest in a second go-around, possibly in 2020.

He said going to a $250 parcel tax: “That seems like a big ask and there seem to be other ways to address that gap.”

His conception would be to do a $90 parks tax with an inflator and a ten-year term, with a two percent tax on electricity, cable and gas.  That would generate $1.4 million from the UUT and $2.6 million from parks.

Will his colleagues go along with that?  We’ll find out tonight.  Will the community?  We’ll find out in June.  But these are core city needs, not luxuries.  The question is whether the council can communicate to the community how bad the situation really is.

—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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  1. Keith O

    The city, DJUSD, the county and the state all coming after us for more and more money on top of the  high taxes we already pay.  It’s time to put the foot on the brakes and say no.

    We are tired of being treated like an ATM machine.

        1. Keith O

          A small percentage of the voters?  It’s been around 30% the last few elections that voted against taxes.  It only takes 34% to say no in order shoot down a parcel tax.  I don’t think getting 4% of voters to go against a tax at this point is all that high of a hurdle.

        2. Keith O

          If 30% is small in your opinion than you must think getting 4% to change their vote to no is a very small percentage.  At this point the more and more taxes that the city and DJUSD try to extract from us the harder it’s going to be for those measures to pass.

          1. David Greenwald

            The opposition to taxes have been remarkably stable between 28 and 33 percent over the last decade.

            There is another factor to consider, if Nishi is on the ballot, I’m predicting that this becomes like the 1972 city elections again with a huge surge of student voters that could be a game changer for local policies.

        3. Keith O

          Yeah, I hope those students realize that they will also have to pay the UUT tax and the full amount of the parcel tax whether they live in a house or an apartment.  Do you really think that students will be onboard for having more of their limited funds diverted to the city when they’re only here for a few years?

          1. David Greenwald

            Students are more likely to vote for tax increases for services than the general population. Their cost would be minimal and probably more than offset by the market influx when the new housing comes on line.

        4. Keith O

          I think you may be wrong here, the tax is charged per unit and the UUT will apply to everyone.  (I’m not sure on the UUT applying to affordable housing, can you fill us in on that?)  But with college students being on limited funds I think you may be wrong that they will be onboard to part with more of their limited money going to the city.  Having a big student turnout might actually benefit the “no” camp especially when they realize they’ll also be responsible for paying the new taxes.

        5. Tia Will


          “I am tired of being treated like an ATM machine.”

          This same theme has been used every time a new tax has been proposed for as long as I have been participating on the Vanguard. Since we are now talking about city needs, not fancy wants, I have a question for you.

          Which specific city needs in terms of infrastructure, safety, or other critical service are you proposing that we give up in order not to pay more in taxes? Police ? Firefighters ? Roads ? City owned buildings ?

          It has always been my understanding that conservatives believe that we need to pay for what we want and need, and believe in self sufficiency. How do you see this as being any different ? Do we not need to act responsibly in paying for what we use ?

        6. Keith O

          ““I am tired of being treated like an ATM machine.”

          That’s not my quote, that is David’s quote.  I actually stated “WE” are tired of being treated like an ATM machine.

          Which specific city needs in terms of infrastructure, safety, or other critical service are you proposing that we give up in order not to pay more in taxes? Police ? Firefighters ? Roads ? City owned buildings ?

          My answer to this is exactly what you quoted:

          “This same theme has been used every time a new tax has been proposed for as long as I have been participating on the Vanguard. ”


        7. Ken A

          It is important to remember that almost all school parcel taxes in the state are scheduled on an off year or special election to “rally the base” so you can not only get almost all the parents to vote but get them out to explain to all their senior neighbors that they can vote for the tax, but won’t have to pay if they don’t want to.  I have actually worked with political consultants and volunteered to help pass school parcel taxes in multiple CA counties and I have never seen a parcel tax poll over 50% in an honest general poll.  The only way to get 2/3 is to sneak the tax through and work hard to let all the seniors (the most dependable voter block out there) know why the tax is important “and” that they can opt out of paying.

  2. Tia Will


    My answer to this is exactly what you quoted:”
    Which is consistent since this is the same non answer that anti taxers have used every time I have asked this question. Which leads me to believe that what you really want is for the city to somehow magically provide for you without you having to pay for the services.

    1. Keith O

      I get tired of the threats, losing firefighters, losing police, etc.

      There are many more cost cutting measures the city can undertake.  Tia, at what point will you ever consider that we as citizens are being asked to pay too much?  They keep coming back for more every few years, when is enough enough?

      1. David Greenwald

        I’d argue they haven’t come back every few years.  The current shortfall was identified back in 2012, 2013.  They talked about having a parcel tax to address it in 2014, but decided to not do it. I think you’re conflating the city with the school district.

        1. David Greenwald

          But the school district and the city have specific individual needs.  I don’t think you can blame the city for what the school board has done (although there is probably an argument that can be made that the effect of growth control policies has been to put more pressure on local taxpayers).

      2. Tia Will


        There are no threats. I asked you a question which you decline to answer. I cannot “admit” to a request being “too much” when you decline to define what you think we can do without or alternatively what you think the optimal amount of taxation would be. It is impossible to say what is “too much” without defining what the “right amount” is. I am willing to pay the increased tax because I value the services that the city provides. You apparently do not. So I am asking which services you believe we can do without.

  3. Marina Khan

    I was so late to that party the last time, but at the very end I got at least a thousand neighbors in the former Ricci/Woodbridge area to learn about the measure and go vote….so they did.. ..even some who already submitted their absentee ballots took them back and changed them…  .those of us who lived (or died) due to that toxic waste dump, are much more passionate and some of us CARE about the town and the people in it… late comer to the cause got at least 1K NO votes… passion stems from TRUTH….

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