Council is coming back from their winter break. We have nine candidates on the ballot to replace Mayor Robb Davis and two-term councilmember Rochelle Swanson. We figure to have a tax revenue measure on the ballot and probably Nishi as well.
We have not seen the official ballot measure for the tax revenue – decisions have not been made and nothing has been finalized and yet some are already threatening, at least behind the scenes, to defeat it.
In the meantime, the community continues to struggle for student housing with a 0.2 percent vacancy, and while the prospects for passage of a new Nishi project are probably better than they have been, still Measure J/Measure R projects are 0 for 3 with only the previous Nishi project even competitive. And you have to go back to the 1990s to find a housing project that got approval in a community vote – Wildhorse. Even that was a battle.
Even when projects do not require a vote, they have often been subjected to a lawsuit – Nishi, Hotel Conference Center, Hyatt House, the Marriott, and most recently Trackside.
And so the question that has been posed to me that I will now pose to my readers is whether Davis is ungovernable, as some have suggested.
If you want to find mistakes that city government has made – fine, it’s easy to do. Some of them are objective mistakes, some of them subjective ones.
You want to punish city staff and the council for past mistakes, go right ahead. That is certainly your right. The stakes are fairly clear and the people who will suffer are generally going to be those who can least afford to suffer.
Part of the problem here is that the council has not laid out what the stakes are. This is something the Vanguard has urged since 2014. The city managed to pass the sales tax without a lot of heavy lifting, but that only yielded 58 percent of the vote. If the parcel tax in June gets 58 percent of the vote, it goes down to defeat and it does so by what would appear to be an overwhelming margin.
Council will have the option, if they really believe that there will be organized opposition, to go to a sales tax or UUT (Utility User tax) route and go to a majority vote. I still don’t believe that is in the best interest of the community, but I also don’t think it’s in the best interest of the community to go the cuts route.
It is time that the staff brings forth a report about what $8 million in cuts looks like and what $16 million in cuts looks like. This is going to be much more painful that people think.
The first problem you have is that you can’t shed all of the costs that you think you can shed. Much of the pension costs are already set in stone.
The council is not likely to cut from police or fire. Moreover, the basic infrastructure pieces are not heavily staffed and effectively cannot be cut.
So what does that leave? According to one source the most natural place to cut would be parks and greenbelts. They could cut kids programming and recreation. They can attempt to cut jobs and
send a number of these positions to outsourcing, although it is less than clear what it would require in terms of collective bargaining.
The city could cut a number of jobs like the wildlife biologist, IPM (Integrated Pest Management) specialist and the like.
The question at this point would be what that would mean for the community. What would the community look like if we had to close down parks and greenbelts? Council was talking about getting a 50-meter pool, well forget that, they’d be looking at closing down the rest of their pools and other recreational activities.
Basically you would have to put anything that is not a core service and not police and fire on a potential chopping block. And, even then, it is not clear just how much saving you would yield.
In my view the city has made a good deal of progress since the days of 2008 and 2009. Not just with cuts by attrition, but actually addressing some of the core issues of retirement benefits and staffing. It has been a long and slow progress.
Is it perfect? No. Can we do more? Probably. But to get to the point where we won’t need a tax increase, I don’t think we want that city. I know I wouldn’t.
One thing interesting to note is that in 2015 the Vanguard opposed the council extending a cost-of-living increase (COLA) during the MOUs. However, even then, the difference between a zero-percent wage increase with no new positions, COLAs or promotions over a ten-year period, and a three-percent annual COLA would be just about one million dollars in pension costs (a not insubstantial cost).
And understand where this battle (if you will) has moved. In 2004, the series of MOUs had between a 15 and 36 percent pay increase. Those days are gone and probably gone forever. Now the only question is whether we have a COLA or no COLA.
Again my preference is reduced to no COLAs because we end up not only paying the increase in salary but also the increased pension. One way to reduce our costs is to allow inflation to do the work for us over time.
The Leland Model paints a bleak outlook of pension increases. Some believe that is the worst case scenario and, if things got worse than that, it would lead to bankruptcies up and down the state.
The city as we have argued needs a cost containment plan. Without one, we simply cannot raise revenue fast enough to overcome spending increases. That is what happened in 2004, we passed the sales tax measure and gave away that money and more in pay increases over five years – and at the end of that five-year period we hit the worst recession in history.
We are still digging out from that. My point here is that, while we are not perfect, we have gotten better.
But revenue is going to be a problem and a number of people warn that, even if we get the revenue measure passed, the sales tax money we have been receiving and keeping us afloat is in trouble. We rely very heavily on the auto market. As we have shown in other articles, the city takes in far less per capita in sales tax than comparable communities, retail across the nation is struggling and the auto market is probably not going to last as it has.
So, in ten years, where do we get our sales tax revenue? But people do not want to consider these issues.
Last week I asked if Davis was sustainable and now this week I argue whether it is governable. We have a lot of choices to make, but, if people love this community, they have to figure out a way to make it work – and right now we are sitting on the brink.
—David M. Greenwald reporting