Guest Commentary: Effects of Excessive Increases in City of Davis Employee Compensation from 2011 to 2020 on the City’s Ongoing Budget Crisis

Davis City Hall with an old style bicycle statue out front

by Alan Pryor

This author previously published an analysis of annual compensation and raises given to City of Davis employees from 2011-2018 and compared them to a government-calculated inflation rate to determine the impacts these raises had on the City budget (see https://www.davisvanguard.org/2020/06/guest-commentary-effects-of-increases-in-city-of-davis-employee-compensation-from-2011-to-2018-on-the-citys-current-budget-crisis/). This article updates those disclosures through the calendar year ending 2020.

1. EXECUTIVE SUMMARY

a. Summary of Increases in Total Compensation (Pay and Benefits)

The actual average total compensation (Pay and Benefits) in 2020 for City of Davis full-time, year-round (FT) employees was $163,244 (see Appendix B and below). This is a 10.7% increase from 2019 and far exceeds the annual rate of inflation of 1.5% in 2020 as determined by the US Bureau of Labor Statistics for Bay Area Urban Wage Earners & Clerical Workers (“Bay Area CPI “- see https://data.bls.gov/timeseries/CWURS49BSA0).

The average increase in total annual compensation (Pay and Benefits) for City of Davis FT employees has been 6.0% per year from 2011 through 2020.  This is more than twice the average annual rate of inflation of 2.7% during the same period as determined by the Bay Area CPI.

If annual total compensation increases to FT employees had been instead limited to the Bay Area CPI rate of inflation from 2011 to 2020 (i.e.2.7%), the average total compensation otherwise received by FT City of Davis employees in 2020 would have otherwise been $124,169 – or about 24% less than the $163,244 in average total compensation actually received.

b. Summary of Increases in Pay Compensation (without Benefits)

Similarly, the actual average annual Pay (without Benefits) paid to City of Davis FT employees in 2018 was $107,683. This is a 7.0% increase from 2019. The average increase in annual Pay (without Benefits) for City of Davis full-time, year-round (FT) employees has been 4.6% per year from 2011 through 2020 compared to the average annual rate of inflation of 2.7% during the same period as determined by the Bay Area CPI.

If annual Pay increases to FT employees had been limited to the Bay Area CPI rate of inflation from 2011 to 2020 of 2.7%, the average Pay otherwise received by FT City of Davis employees in 2020 would have instead been $92,439 – or about 14.2% less than the $107,683 average Pay actually received.

c. Summary of Impact of the Excessive FT Employee Compensation on the City’s Budget

The annual differences (i.e. payroll savings) between the actual total Pay and Benefits paid by the City to all FT employees from 2012 through 2020 and that which would have been paid if annual increases had instead been held to the CPI is very substantial and ranges from $3.645 Million in 2015 to $12.387 Million in 2020.

On a cumulative basis, the City has paid in excess of $54 Million more to FT employees in Pay and Benefits from 2012 through 2020 compared to if annual total compensation increases otherwise been held to increases based on the Bay Area CPI.

That additional $54 million could have been very beneficially used in the intervening years to resurface many additional miles of the Davis streets and bike paths in most need of repair while still providing adequate and fair annual increases in employee compensation to match inflationary pressures on their costs of living.

The most recent trend in accelerating employee salaries and total compensation is ironic given the current City Council’s self-proclaimed fiscal responsibility and laser-focus on cost containment.


II. ANNUAL COMPENSATION INCREASES OF CITY OF DAVIS FT EMPLOYEES FROM 2011 – 2018 COMPARED WITH INCREASES IF BASED ON ANNUAL CONSUMER PRICE INDEX

To determine the overall financial impacts on City finances, it is instructive to determine the extent of actual payroll and benefit increases granted employees compared to if compensation increases had instead been based on the actual rates of inflation over the same 2011-2020 time-frame.

Payroll and benefits information necessary to conduct such an investigation is reported annually through Public Records Act requests by all California state, county, municipal, and UC system employers to the independent non-governmental, non-profit watchdog organization, Transparent California (www.transparentcalifornia.org). Summary information showing total employee compensation for all of the City’s employees downloaded over the 2011 – 2020 are shown in Appendix A.

Note that the payroll data from Transparent California is only available up through the calendar year ending December 31, 2020. Year-ending data for calendar year 2021 will only be available from Transparent California when received from the various government agencies and posted later this year. As such, payroll and benefit increases for City of Davis employees that have already become effective on the start of the current fiscal year (beginning July 1, 2021) are not yet reflected in this data.

In addition to the summary data reported in Appendix A, regular payroll and overtime pay (collectively referred to as Pay) and total compensation including payroll benefits (including Pay and Benefits) are reported each year for each individual employee of the City (e.g. see https://transparentcalifornia.com/salaries/2020/davis/ for employee salary records for 2020).

By segregating the annual payroll data for individual FT city employees from part time employees, the average Pay and average total compensation (Pay and Benefits) for FT City employees can then be calculated. This in turn allows the average annual percent increases or decreases in Pay and Pay and Benefits for all employees of the City to be determined and compared to annual increases in the CPI as reported for Bay Area Urban Wage Earners & Clerical Workers by the US Bureau of Labor Statistics (https://data.bls.gov/timeseries/CWURS49BSA0).

The differences between the actual average annual percentage changes in compensation received by FT City employees as reported by the City to Transparent California and the corresponding annual increases in the specified CPI rate are shown in the following graph. Also see Appendix B for the details of these and other compensation calculations discussed below.

To summarize the above information, the average annual increase in the Bay Area CPI from 2011 through 2020 as reported for Bay Area Urban Wage Earners & Clerical Workers by the US Bureau of Labor Statistics is 2.7%. The actual annual average increase in Pay and Benefits for City of Davis FT employees is 6.0% and the actual annual average increase in Pay for FT City employees is 4.6%.

Keep in mind that the Bay Area Urban Wage Earners & Clerical Workers CPI is unusually high compared to other local measures of CPI because it very strongly is influence by soaring housing costs in the Bay Area. These impacts are generally more muted in the Sacramento region. For additional comparison, the CPI used by the Social Security Administration over the same time period for determining annual cost-of-living increases to pensioners is about 1.5%.

Using the above information, the differences in average annual compensation between what was actually paid to City employees can then be compared to the compensation that would have been paid if Pay and Pay and Benefits were instead increased only by the CPI as shown in the following graph.

For example, the actual average annual total compensation (Pay and Benefits) paid to all FT City of Davis employees in 2020 was $163,244. If annual increases in total compensation were otherwise held to the annual Bay Area CPI Index, the average annual total compensation would instead be $124,169.

Similarly,  the actual average annual Pay paid to all FT City of Davis employees in 2020 was $107,683. If annual increases in Pay were otherwise held to the annual Bay Area CPI Index, the average annual Pay would instead be $92,437.

As is obvious, the greater percentage of annual increases in Pay and total Pay and Benefits actually given to FT City of Davis employees over and above the Bay Area CPI-defined inflation rate has resulted in an increasing spread between compensation actually paid to FT employees compared to that which would have otherwise been paid if annual increases had instead been held to the percentage increases in the CPI.


III. TOTAL COSTS OF EMPLOYEE COMPENSATION INCREASES TO THE CITY

These increases in employee compensation over and above increases based on CPI has had a profoundly deleterious effect on City finances and the City’s ability to pay for other services such as infrastructure maintenance.

The difference between the actual total Pay and Benefits paid by the City to all FT employees from 2012 through 2020 and that which would have been paid if annual increases in Pay and Benefits had instead been held to the benchmark CPI is very substantial ranging from $3.645 Million in 2015 to $12.387 Million in 2020.

On a cumulative basis, the City paid in excess of $54+ Million more to employees in Pay and Benefits from 2012 through 2020 compared to if the annual increases in compensation had otherwise been held to annual increases in CPI. This is shown in the following graph.

The $54+ Million that would have been saved by the City had employee compensation increases been held to the CPI from 2011 through 2020 would have paid pay for an awful lot of infrastructure and road repair that was otherwise deferred by the City and now accumulates as increasing unfunded liabilities.

IV. THE CITY HAS MISREPRESENTED AND FAILURED TO ACCOUNT FOR UNFUNDED PENSION LIABILITIES BY THE CITY

The City has been misrepresenting the extent of annual employee compensation increases for some time and has also failed to properly account for associated unfunded pension liabilities.

For example, in an article published on June 26, 2018 in the Davis Vanguard entitled “Sunday Commentary: The MOUs We Signed Should Not Be Cause for Alarm” (https://www.davisvanguard.org/2018/06/sunday-commentary-mous-signed-not-cause-alarm/), it was reported that the City recently signed Memorandum of Understandings (MOUs) with the City’s employee labor groups ostensibly granting, according to the Staff Report at that time, only a 2% retroactive salary raise and three years of future 2% annual salary increases.

The Vanguard article stated at that time,

“The notions of thinking about the contract in terms of total compensation and using the contract to mitigate risk are highly innovative and the council deserves a lot of credit.”

Matt Williams (then on the Finance and Budget Commission) strongly commented in response,

“There is absolutely nothing innovative about thinking about employee costs in terms of total compensation … absolutely nothing!  The community dialogue, especially here in the Vanguard over the last 3-4 years has been almost 100% in terms of total compensation…So, all the council was doing was catching up with what their constituents had already been doing for 3-4 years.

What risk did the contract mitigate? The simple answer to that question is no risk whatsoever.

Why no risk mitigation?  For the following reasons …

(1) The 2% annual COLA (8.25% over the 3 year and 12 day term of the MOU) is 68% higher than the average annual COLA granted by the Social Security Administration over the last 9 years.

(2) The 6/30/2016 CalPERS Actuarial Valuation report shows 245 “active” members of the City of Davis Miscellaneous Plan.  Over 31% of those “active” members will actually not receive an 8.25% increase, but instead will receive in excess of an 18% increase.

(3) Another 40% of those “active” members will actually not receive an 8.25% increase, but instead will receive in excess of a 12.5% increase.

(4) Only 28% of the “active” members will actually receive the 8.25% increase.

(5) The 18% increase bumps up the Pension Qualifying annual compensation by at least 18% (possibly more), which means the City’s Pension liability goes up substantially thanks to these MOUs.

 It will take a Masters in Political Spin to transform those factual realities of the MOUs into “highly innovative risk mitigation.”

And so here we are today, almost three years after the City was reporting annual total compensation increases of only 2% per year, and we find out that actual compensation increases were far greater –  just as Mr. Williams indicated would happen. 

Additional information on the extent of under-reporting of the City’s unfunded pension liabilities is discussed in Appendix C.


APPENDIX A – SUMMARY OF ANNUAL COMPENSATION OF CITY OF DAVIS EMPLOYEES AS REPORTED BY TRANSPARENT CALIFORNIA

The following table shows summary statistics of City of Davis employee compensation as reported by Transparent California (www.transparentcalifornia.org).

Inspection of this data shows a strong, increasing trend in median employee Pay and total Pay and Benefits from 2011 through 2020. It also shows a fairly sizable 17% increase in annual employee costs per Davis City resident from $627 in 2015 to $762 in 2019. Note that the population of Davis in 2020 was underestimated and the employee costs per resident thus overestimated due to the number of students that has left town because of pandemic concerns during the 2020 census.


APPENDIX B – CALCULATIONS OF ACTUAL ANNUAL EMPLOYEE COMPENSATION INCREASES COMPARED WITH INCREASES BASED ON RATES OF INFLATION

Average compensation changes of full-time, year-round (FT) city employees was determined by first segregating and removing all part-time and non-year round employees from the listings of the individual annual payroll details for all employees of the City. Then the compensation of all the FT employees was arithmetically averaged to calculate the average Pay and average total Pay and Benefits for all FT, Year-Round City employees.

This in turn allows the average annual percent increases or decreases in average Pay and Pay and Benefits to be determined and compared to annual increases in the CPI as reported for Bay Area Urban Wage Earners & Clerical Workers by the US Bureau of Labor Statistics  (https://data.bls.gov/timeseries/CWURS49BSA0).

In this manner, the differences in average annual compensation between what was actually paid to City employees were then compared to the compensation that would have been paid if Pay and Pay and Benefits were instead increased only by the annual Bay Area CPI as shown in the following table.


APPENDIX C – CORRECT REPORTING OF UNFUNDED PENSION LIABILITIES FOR CITY OF DAVIS EMPLOYEES IN 2018

One contributing factor to the unusually large increase in total Pay and Benefits (12.1% in 2018 and 10.7% in 2020) is that Transparent California now rightfully reports unrecognized pension liability as compensation in a separate category called “Pension Debt” for the first time in 2018 (see https://transparentcalifornia.com/salaries/2018/davis/).

Transparent California explained the addition of this new reporting category as follows;

What are pension debt payments?

 The cost associated with employer-provided retirement benefits is comprised of two components: the normal cost and the unfunded liability (debt) payment.

 The normal cost is the amount the pension fund determines is necessary to pre-fund that employee’s future benefit. But because this cost is calculated based on a series of projections about future events, they oftentimes end up being insufficient to fully fund the employee’s promised benefit.

 When this happens, an unfunded liability (debt) is created. In order to pay this debt down, the annual retirement costs are increased accordingly.

 Beginning in 2017, agencies belonging to the state pension fund (CalPERS) are only required to report the normal cost portion — which gives the erroneous impression that their annual costs have significantly declined.

 To ensure the full annual cost of employee compensation is reported, and to maintain parity with the reporting methods used by non-CalPERS agencies as well as all CalPERS agencies prior to 2017, Transparent California prorated these agencies’ pension debt payments across all employees. This prorated value is reported under the “pension debt” column.

 The pension debt column does not appear for any agency prior to 2017, as that cost was already included by the reporting employer as part of their retirement costs.

 Similarly, it does not appear for the agencies that continue to report their full retirement costs to Transparent California.” (Bold emphasis added)

About The Author

Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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30 Comments

  1. Bill Marshall

     the actual average annualPay(withoutBenefits) paid to City of Davis FT employees in 2018 was $107,683. This is a 7.0% increase from 2019.

    Huh?  Like Merlin are you living backwards in time?

    About Us – Nevada Policy Research Institute (npri.org)

    Is the mothership of transparentcalifornia.com… their ‘history’

    A History of Nevada Policy Research Institute – Nevada Policy Research Institute (npri.org)

    Info on the president of their board of directors…

    John Tsarpalas Archives – Nevada Policy Research Institute (npri.org)

    and, John Tsarpalas – Commonwealthy

    and, 880276314_201912_990_2020101517379493.pdf (irs.gov)

    Note it says he works 40/hrs per week for the organization… and,

    (51) John Tsarpalas | LinkedIn

    An

    the independent non-governmental, non-profit watchdog organization, Transparent California (www.transparentcalifornia.org)???

    I leave it to those interested to explore the ‘facts’ about “Transparent California”.

    A number of other questionable claims, statements, and misrepresentations are present… given the voluminous data provided, will take time to sort it out.

    Some simple ones… the articles does not address, take into account the change in PERS assessments that first came into play ~ 2010… it does not address the increase the City imposed on employee contributions…

    Another simple one… I can track my post-retirement record on Transparent California, and can compare it to reality… they do not match…

    I could not find a suggestion/recommendation from Mr Pryor on how to proceed moving forward, given his assertions/calculations of prior expenditures.  I’ll look again, but expect ‘no joy’.

     

     

     

     

     

      1. Bill Marshall

        But how?  If CalPers increases assessments to employers, does that mean employees absorb 100% of that?  If medical coverage (specific) exceeds Bay Area CPI (general), the employees absorb that?  Just be clear… any untoward events (greater than overall CPI) are absorbed by employees… a decrease in take-home pay?  Might be ‘the answer’, but come out and say it.  Stand by it.

        I do not believe Alan P is clear at all… but I’m no ‘clear-voyant’… perhaps you clairvoyant…

        ‘Concrete’ analysis is generally followed by ‘concrete’ recommendations… at least in my profession.  I see none… your posit is not Alan M’s response, to whom I addressed my questions… are you his “official spokesperson”?  If not, I await his answers.

        I do know that my pension is adjusted by inflation increases (as defined by feds) or 2%, whichever is LESS… so yeah, ‘taking one for the team’ this year, while SS recipients are enjoying the ‘full monty’… I paid a lot into SS, but will never see one cent of that (thanks, Ronnie!) either as person, or as a surviving spouse.

        1. Ron Oertel

          If medical coverage (specific) exceeds Bay Area CPI (general), the employees absorb that?  Just be clear… any untoward events (greater than overall CPI) are absorbed by employees

          That’s pretty much how it works for federal employees.  There’s a limit to how much the federal government will pay toward that.

        2. Matt Williams

          The answer to your first question Bill is that for any employee whose total earnings are over a certain threshold, the answer is definitely “Yes”. Below that threshold a sliding scale would apply.  Those who can afford to pay more for their benefits should do so.  That is the way Medicare Part B premiums currently work.

          I have said it and I stand by it.

    1. Matt Williams

      With that said, that escalation percentage should be the aggregate accumulated goal;  however, the percentage increase should be on a sliding scale so that the employees at the lower salaries get similar dollars added to their paychecks as the higher salaries.  That would reduce the percentage raise for the higher salaried employees and increase the percentage raise for the lower salaried employees.

      1. Alan Pryor

        That would reduce the percentage raise for the higher salaried employees and increase the percentage raise for the lower salaried employees.

        I am also actually looking at the percentage increases in lower level jobs vs those in upper Davis City management and will report on it soon. I suspect that we’ll actually see that that the upper level management percentage increases in compensation are far greater than the lower level employees.

        You may recall that last year City Manager Mike Webb was given a performance merit increase substantially in excess of the 2% raise most employees got. I recall that one of the justifications was that we needed to raise his compensation level because otherwise the compensation levels of the assistant city managers was getting too close to raise them further and, josh darn it, we just have to raise those assistant city manager pay grades so we can keep those best and the brightest from going elsewhere.

    2. Alan Pryor

      I can track my post-retirement record on Transparent California, and can compare it to reality… they do not match…

      Blame that on CalPERS, not me.

      So are you getting more or less than CalPERS reports to Transparent California?

       

    3. Todd Maddison

      Bill,

      Speaking as the Research Director for Transparent California, I have to ask you to please elaborate for us on what concerns about Nevada Policy have to do with the data Alan is presenting?

      Are you implying that the numbers presented by Transparent California are doctored or spun in some way to match some particular philosophy?

      If so, can you present your evidence?

      We make this pretty clear on our site, but for the benefit of anyone who has not seen it we obtain our data through legal Public Records Act requests for data straight from the agency’s own records.  If you’re familiar with the PRA, you know all we CAN ask for is already-existing data.

      The only manipulation that TransCal does to the data is what is needed to organize it in the manner presented on our site – so retirement and healthcare are combined into “benefits”, and a calculation is made to allocate Unaccrued Actuarial Liability appropriately across their employee base.

      The only way the data on Davis could be inaccurate is if the City reported inaccurately to us, or if we made some form of mistake in preparing that data for upload.

      On the former, we have to assume the City has responded properly to a legal request.  If you have some indication they have not, please send that information to us (records@transparentcalifornia.com) and we will take that back to the City to confirm or correct.

      If you feel we have made a mistake of some sort, we would absolutely welcome your evidence and observations for that.  We are human beings, it is certainly possible errors were made, and if so we would like to get them corrected as much as you would.

      Barring either, however, I would suggest you focus on the data rather than any ad hominem arguments about what you feel the philosophical leanings of the source may be.

      Thanks

      1. Bill Marshall

        All I did is what you do…

        Post publicly available information and let others draw conclusions.

        I made no “ad hominem” arguments… I suggest you avoid those as well…

        And, your organization is not all that ‘transparent’… you do not list your EIN as a non-profit, on the website for example…

  2. Don Shor

    The question I would have is how local compensation compares to comparable employees at nearby cities within this metropolitan region; that is, how Davis compares to other cities that are drawing from the same labor pool. I don’t see a connection between labor costs and the CPI as being especially relevant. What matters is the change over time in the local and regional labor market. If other local employers are paying more, I have to pay more if I want to get and keep good employees.

    Pay isn’t the only factor in employee retention, but it’s one of the factors. Another big factor is the working environment, and I would say Davis is an awful place to be a municipal employee at the administrative level.

    1. Ron Oertel

      The question I would have is how local compensation compares to comparable employees at nearby cities within this metropolitan region; that is, how Davis compares to other cities that are drawing from the same labor pool.

      The “labor pool” is not necessarily limited.

      In any case, I’d compare the size of fiscal deficits.

      I don’t see a connection between labor costs and the CPI as being especially relevant.

      Oh, I agree (he says, sarcastically).  After all, what difference does it make regarding how much money a city has (restricted by law/Proposition 13)?

      What matters is the change over time in the local and regional labor market. If other local employers are paying more, I have to pay more if I want to get and keep good employees.

      The oldest line in the book.

      Pay isn’t the only factor in employee retention, but it’s one of the factors. Another big factor is the working environment, and I would say Davis is an awful place to be a municipal employee at the administrative level.

      Don’t know what that’s based upon. Mean comments in the Vanguard?

       

    2. Alan Pryor

      Government Workers are generally paid inversely proportional to the size of the government entity; all other things being almost equal. That is,  federal government level pay is on average a little less than state employees (certainly in California) which are both oftentimes less than comparable private sector jobs. However, federal and state compensation is far less than compensation paid to County and municipal government spending for comparable jobs and County and Municipal employee compensation is generally far higher than private sector employment for comparable positions; all other things being almost equal.

      …how local compensation compares to comparable employees at nearby cities within this metropolitan region.

      Davis City employees are generally compensated at somewhat the same level as other local entities. So the good news is everyone will be going broke together!

      1. Don Shor

        Davis City employees are generally compensated at somewhat the same level as other local entities.

        Thanks. That’s basically the information I was looking for.
        The city is now hiring a new assistant city manager, a new city arborist, and is still looking for an IPM specialist. Should they cut the pay for those positions as they seek applicants?

        1. Matt Williams

          The first step would be to not hire a second Assistant City Manager.  Relook at the leadership requirements of Ash Feeney’s position and figure out the best way to maximize the achievements of the three key activity areas:

          — Planning

          — Land Use Development Application review and processing

          — Economic Development (forging a dynamic, vibrant, interactive partnership with UC Davis)

          There has been very little planning in Davis for the last 20 years, and any economic development has been in fits and starts.  We need to do better than that.

        2. Ron Glick

          In 20 years. You mean since Measure J. Coincidence?

          The problem with only having one Assistant City Manager is that it defies Parkinson’s law where supervisors must have at least two subordinates or else they will feel threatened that the one subordinate will be after their job.

    3. Todd Maddison

      “how local compensation compares to comparable employees at nearby cities within this metropolitan region”

      That is useful information, but not a valid test for whether the pay is competitive in the local market.

      In my past, I managed a division of a national retailer that had operations in 22 states.  My chunk of that was a few hundred employees operating in 7 regional centers across the country.

      When I was evaluating pay, I didn’t care much what was being paid in a city 20 miles away.  Most people do not want a long commute and rarely will change jobs for something that does not pay significantly more.

      What is important is what is paid for like jobs in the local area, which is something I rarely see government agencies check.  Salary surveys are commonplace and can be obtained for small amounts of money from many sources, but no government entities do that.

      Wonder why that would be?

      If I live in a very nice neighborhood where everyone drives $100,000 cars, I can’t say “I must spend $100,000 on a car to get to work” as a result of that.

      I don’t know about cities, but I do know a lot about school districts, and can tell you that they often use each other’s pay to ratchet up their own.  In my home school district, the median teacher now makes about $40,000/year in total compensation more than a private employee in the same area would make with equivalent education.  THAT is what is important.

  3. Alan Pryor

    Turnover of municipal employees is very low compared to private sector employment turnover and is mostly due to retirements or transfers to equally high paying jobs in other municipal governments or the move of a spouse to another geographical area. This in itself is a very good indicator of how well they are compensated compared to private sector employees.

    Here is the 2020 pay scale for the new hirees (I think) the City is looking for.  I suspect we could get very qualified employees for substantially less than these pay grades.

    Job Title                     Assistant City Manager            Urban Forest Manager
    Base Pay                        $181,071                                        $109,713
    Other Pay                       $0                                                  $7,005
    Benefits                          $49,844                                        $30,674
    Total Pay                        $181,071                                       $116,718
    Pension Debt                 $44,344                                        $32,974
    Total Pay & Benefits    $275,259                                       $180,366

      1. Ron Oertel

        I don’t know – do people work in local plant nurseries for substantially-less?

        For that matter, do a lot of people work for state government (commute to Sacramento) for substantially less?

      2. Todd Maddison

        Do you know of a salary survey that has been contracted out to an independent entity that shows differently?

        My experience is in decades of executive management at companies the size of most of our cities (or larger, barring the top 10 or so in the state).  I can tell you one fundamental issue is that in private industry anyone responsible for management of a division would have anywhere from 10 to 30% of their annual income dependent on meeting performance goals.

        Bringing the budget in in the black, while providing services to customers that meet defined metrics, for example.

        The fundamental problem in government is that we don’t do that.  The Public Works Director for a city, for instance, has no part of their income dependent on meeting targeted goals for pothole reduction (or whatever…)  Our school district superintendents have no part of their income dependent on improving the education their district provides in measurable ways.

        If we put a 10% bonus on reducing potholes by X% , or improving our kids English scores by Y%, we’d see immediate improvement.

        But we don’t, mostly because our city councils generally have zero experience negotiating and managing such plans, and our city managers would not want to implement that for subordinates for fear it might be applied to themselves.

         

        1. Bill Marshall

          You speak much truth…

          For a given position, in the public sector, there is no salary difference between a ‘star’ and a ‘slacker’… based on tenure, more often than not.  The problem lies in who decides whether the ‘metrics’ are exceeded, or fail to meet metrics (and, who sets the metrics)… there is the possibility of cronyism… where a low performing employee, who gets along well with the boss gets the $$$, and a high performing employee who rightfully challenges the boss when they are doing ‘stupids’ gets nada.  Then, there are the unions… who go beyond metrics and use political power.   It’s not simple.

          Then there is the problem of “steps”… in Davis, for example, there are five ‘steps’… the only way to ‘compensate’ a high achiever is to reclass them to a higher position, once they’ve “topped out”.   It’s not simple, as between State law and unions, the public sector is constrained in ways the private sector is not.

          In the City and DJUSD (which have many more steps), step increases are mostly driven by tenure… not performance-based… DJUSD has additional ranges, based on ‘degrees’… City of Davis does not… even if someone obtains an additional ‘credential’, often bringing additional ‘value’ there is no provision for additional compensation.  It’s not simple.

          You raise very good points… but, ‘to every solution there is a problem’… but your points (and mine) should be part of the discussion… they are valid.

          Thank you for opening this side of the discussion.

  4. Keith Y Echols

    First, let me say that I appreciate anyone that puts in this amount of work in their analysis, whether I agree with them or not.  I’m all for curbing wasteful spending.  I just wonder if this analysis is correct or needs some context.

    I had a similar thought or question that Don did; which is how does Davis’ local government compensation compare with other local government compensation in the area?

    (1) The 2% annual COLA (8.25% over the 3 year and 12 day term of the MOU) is 68% higher than the average annual COLA granted by the Social Security Administration over the last 9 years.

    Generally when a business hires someone it’s based on what comparable compensation they would get from a similar job.  You don’t base the compensation you offer (as well as raises) based on the projected COLA or CPI increases (except sometimes when collectively bargained).

    Keep in mind that the Bay Area Urban Wage Earners & Clerical Workers CPI is unusually high compared to other local measures of CPI because it very strongly is influence by soaring housing costs in the Bay Area.

    Here’s the thing, the Sacramento region has been growing at much more furious rate over the past 5-10 years compared to the Bay Area.  The Bay Area is already expensive and continues to stay expensive.  The Sacramento region has become more and more expensive.  So the increased percentage in living cost in this region should be expected to be much greater in the Sac area when compared to the Bay Area.

    It also shows a fairly sizable 17% increase in annual employee costs per Davis City resident from $627 in 2015 to $762 in 2019.

    That’s certainly some interesting data.  But I think it needs some context.  What is the annual employee cost per resident in other Sacramento regional cities?

    If we carve out the what is generally the most significant cost in people’s lives; housing/rent/mortgage, I thin we can get a better idea of how and why the costs for hiring and keeping employees in the region are increasing so much.  The average cost for rent in Davis in November of 2014 for a 3 bedroom home was $1800.  The average cost of rent for a 3br home in January 2022 is $2700…according to zumper  I think those numbers are a good reflection of the rising costs of hiring employees public or private in the region.

     

     

    1. Ron Oertel

      The average cost for rent in Davis in November of 2014 for a 3 bedroom home was $1800.  The average cost of rent for a 3br home in January 2022 is $2700…according to zumper  I think those numbers are a good reflection of the rising costs of hiring employees public or private in the region.

      Maybe so, if city employees were required to live in the city in which they serve.

      1. Keith Y Echols

        If we’re basing compensation with the rise in housing prices….the rise in housing prices in the entire Sacramento region has skyrocketed.

        If those employees decided to live in Woodland, then their rent in Nov 2014 for  a 3br home would have been on average of $785.   As of January 1, 2022 the same home would cost in rent $1415.  West Sac.  $785 then, $1800 now.  Again, that’s if we tie the rate of increase in rent to the rate of increase in compensation offered.

        1. Ron Oertel

          Probably should note that those are costs for apartment rentals.  (By the way, rent control is now in place statewide. So, perhaps that should also be factored-in.)

          Regardless, I would think that compensation in the amount of $275,000 should be enough to handle that.  Perhaps the compensation was “too high” in the first place.

          Perhaps the bigger concerns are the new positions that have been added (the “roaming social workers”, which aren’t accounted for beyond what the federal government is providing on a short-term basis), and the new positions that might be required for a ladder truck.

          Bottom line is that it’s downright irresponsible to make decisions which result in costs escalating faster than revenues. It is ultimately that simple.

  5. Bill Marshall

    The standing question remains, Alan P :

    What do you propose and/or recommend?

    Unless specifically authorized (pun intended), no one else need speak for Alan P…

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