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Tuesday, December 09, 2008

Davis Enterprise Joins in Call For Open Contract Talks

In a surprising twist, the Davis Enterprise Editorial on Sunday Morning, "Contract Talks Should Be Open" called for transparency in the city's budget and contract process to city employees in order to "prove to us that the salaries and benefits we promise city employees won't drive Davis into insolvency."

The editorial states:
"FOR TOO LONG and to ill effect, the Davis City Council has gone behind closed doors to bargain with the city's employees. The agreements produced in these sessions have not served the fiscal health of the city. Our council must end this practice and negotiate on behalf of the public in front of the public.

The people who are paying the bills have a right to not only know how much a labor contract will cost them, but the people should be permitted to express their views on each deal before it is a fait accompli.

Most of the budget of the city of Davis goes to its workers. By concealing themselves in locked rooms with labor negotiators, the members of the council don't get the input from citizens they need to make fully informed decisions on the most financially important decisions of the city.

To date, this lack of input and oversight has been costly."
The Enterprise then questions the practice of using recent labor agreements from other nearby communities as benchmarks to help determine Davis' wages and benefits in an effort to remain competitive.

As the Enterprise writes:
"Unfortunately, some of our neighbors have been overly generous and, like lemmings, we have followed them over the cliff's edge."
From the city's perspective, here is Finance Director Paul Navazio's staff report from October 14, 2008 that he offered at the budget workshop.
"First, the City Council has expressed a desire for a more transparent process leading up to formal negotiations with each of the City’s employee bargaining groups. To that end, the presentation will review organizational goals related to employee compensation, summarize the various elements that comprise the city’s compensation package, and discuss the role of comparative market studies in establishing appropriate levels of compensation.

In addition, the City - as well as most other public agencies - has come under heightened scrutiny over the level of compensation paid to employees. Over the past year, selected elements of City personnel costs have been the subject of numerous news articles and editorials. Moreover, the City continues to receive an increased number of formal public records act requests from various entities, ranging from main-stream news organizations, governmental watch-dog organizations, as well as private citizens. As a result, staff believes that much of the information being presented to the general public fails to provide a complete (and sometimes accurate) picture of the City’s compensation structure, and is rarely provided within the context in which the City tackles important policy questions related to employee salaries and benefits.

It is important that the City provide a competitive compensation package in order to recruit and retain qualified city employees, while managing overall personnel costs. At the same time, it is equally important that the public have a clear understanding of the City’s overall compensation structure, and the process by which the City determines appropriate compensation levels."
As the Enterprise makes clear, one of the key failing of this policy, is that if one city goes over a cliff fiscally, it takes all city's over the cliff with them. On the news just last night was the prospect of four major area cities including Sacramento facing possible severe fiscal crisis and possibly bankruptcy.

As they write:
"THAT IS HOW DAVIS ended up with unfunded retiree medical benefits, extremely early retirements and spectacularly expensive pension plans. The other cities gave them to their workers, so we did, too. No one on the outside was paying attention, because no one in the public was allowed to participate in the process.

A cop or firefighter who retires from the city at age 50 takes home up to 90 percent of his final salary plus cost-of-living increases for the rest of his life. If he's married and has a child age 22 or younger, the taxpayers of Davis continue to pay his full medical and dental insurance, now $15,860 a year. Even without the current economic downturn, there is no way the city can afford these lavish promises. "
While we appreciate that the Enterprise has come around on this issue calling for full transparency and a public process, we would be remiss if we did not point out that the Enterprise endorsed those candidates last election who promised to continue more of the same. They endorsed the three candidates also supported by the Davis Firefighter Association who have pledged to continue this unsustainable fiscal practice. And they opposed the member of the council, namely Sue Greenwald, who has been fighting for changes to this policy for five years.

The key question is how we get out of this mess.

The Vanguard joins our Davis Enterprise counterparts in the call for transparency:
"The council needs to invite the public into the process and prove to us in the full glare of the sunlight that the salaries and benefits we promise city employees won't drive Davis into insolvency."
But transparency alone is not enough.

The Vanguard offers three additional suggestions.

First, a freeze on pay increases other than normal step and column increases that have been negotiated into the collective bargaining agreement.

Second, the City Council and Finance Director Paul Navazio need to get innovative. We cannot realistically cut salaries, but what we can do is look for creative ways to scale back and rollback other benefits, particularly retirement benefits to those employees who are due to get 3% at 50 or 2.5% at 55.

Third, the Davis Enterprise is right, we need to stop basing our labor negotiations on the standard practice of surveying "recent labor agreements in nearby communities to determine what wages and benefits." That practice simply drives all cities into fiscal crisis. This is the heart of the problem from the Vanguard's perspective. On a regional basis, all cities are hurting. The city is engaging in a hiring freeze right now as it is, so recruitment is not the most pressing issue, fiscal responsibility is.

Even if we were hiring, would fiscal conservatism harm us in recruitment efforts? We know for example when a fire fighter position opens up, there are hundreds of qualified applicants, that clearly suggests we can slow down the rate of growth in salaries and still get good prospects. Police are more problematic, although there is a suggestion that this is a professional issue as opposed to a local issue. Regardless, one suggestion would be to examine our ability to hire field by field and make determinations of salaries and compensation on a field-by-field basis.

The one good thing is that not only are we not alone, but we are probably better off than some other localities. We will talk more about this later however because things are catching up with the latest fiscal reports suggesting an increasing deficit in Davis as well.

---David M. Greenwald reporting