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Tuesday, March 03, 2009

The Vanguard has moved.

The Vanguard has moved.


Monday, March 02, 2009

Sunday, March 01, 2009

Judge Orders Defendants to Cease Delay Tactics in Buzayan Case

It was summer of 2005 when then 16 year-old Halema Buzayan was arrested by Davis Police Officer Pheng Ly. Much has happened since that time both within the city and the police department. But one thing that has not happened is that the Federal Lawsuit filed by Ms. Buzayan's family has not gone to trial. That may finally change shortly as a Federal Judge last week ordered the defense to quit stalling and allow the case to move forward.

Halema Buzayan and her family allege 16 causes of action against the Davis Police Department, individual police officers, the Yolo County District Attorney and several individual's from the DA's Office, and the City of Davis. Specifically the list of defendants include: City of Davis, former Davis Police Chief James Hyde, Assistant Police Chief Steven Pierce, Officer Pheng Ly and Ben Hartz, Former DA David Henderson, Deputy DA Patricia Fong, and Counsel for Yolo County and the City of Davis Douglas Thorn who is himself a defendant in this case.

The defendants have submitted a series of motions to dismiss, but to this point the only original defendant whose case was dismissed was the Davis Enterprise, dismissed in July of 2007.

US District Judge Morrison England describes the current motion to dismiss as being submitted "in an unusual manner."

He writes:
"Although the Court concludes that the majority of the Second Motion to Dismiss is duplicative and unnecessary, and while Plaintiffs have strong arguments that the Motion to Dismiss is untimely in the first place, the Court will nonetheless exercise its discretion to hear Defendants’ pleading challenge one final time because resolution of Defendants most recent contentions may help clarify the remaining issues in the present action."
Judge England proceeds to deny all but a very small portion of the defendant's motion to dismiss.
"Based on the foregoing analysis, Defendants’ Motion to Strike (Docket No. 156) is DENIED. Defendants’ Motion to Dismiss (Docket No. 138) is also DENIED, except that the Court clarifies, with respect to Plaintiffs’ Fourteenth Cause of Action that any reliance on false light invasion of privacy is precluded. Defendants’ Second Motion to Dismiss is accordingly GRANTED in that regard. Pursuant to Rule 12(f)(1), the Court orders the second sentence of paragraph 190, and the first sentence in paragraph 192, in Plaintiffs’ Second Amended Complaint stricken. All other causes of action shall proceed in a manner consistent with this Order."
While the judge struck those two paragraphs, he left the bulk of the fourteenth cause of action in place.
"However, the Fourteenth Cause of Action remains viable to the extent Plaintiffs rely on alleged disclosure and broadcast of private information."
The Fourteenth cause of action is a complaint regarding a violation of the California Constitutional Right to Privacy. The bulk of that complaint claims a deliberate disclosure and broadcast of private information.
"Defendants' conduct has resulted in Halema Buzayan and her family being placed in a false light in the public and within the community. Defendants have violated Plaintiffs' right to privacy as secured under the California Constitution. Plaintiffs assert claims for violation of their right to privacy as secured under the California Constitution against all involved Defendants."
Judge England then concludes his opinion with the following:
"Additionally, while the Court concludes that entertaining Defendants’ Second Motion to Dismiss had some limited utility in narrowing the arguments, many of the other arguments raised were either cumulative, premature, inadequately developed, and/or unsubstantiated. Defendants are directed to refrain from any further efforts to frustrate the timely resolution of this litigation."
In other words, Judge England is telling the defendants to quit trying to stall this case. It is time to move forward.

He roundly criticizes their arguments as being premature, inadequately developed, and/ or unsubstantiated. He questioned the need for this second motion to strike. And although he limited the 14th complaint somewhat, for the most part virtually summarily dismissed it.

At this point in time, it is time to move forward with the case, and let the Buzayan Family after three and a half years finally have their day in court. Then the court can determine if they were wronged and what the damages were.

---David M. Greenwald reporting

Saturday, February 28, 2009

Commentary: What Does Seven Million in Budget Cuts Look Like?

DJUSD knows what it is like to try to reduce a $4.5 million deficit because they attempted to do so last year. $4.5 million would have meant at least 114 teacher layoffs, possibly a closed school, definitely some ended programs like music, art, maybe da Vinci High as well--at least as they knew it. But while Davis experienced threats, they never had to go through with it. The May revise came in better than the midyear budget estimates. The Democratic legislature restored funding cuts. Davis used one-time monies from its reserves and got a $1.7 million gift and was able to escape last year largely unfazed.

I say all of that because at its core, $4.5 million in budget cuts would have been devastating. Now imagine $7 million in cuts. That is what Woodland is facing right now. That is what the Woodland School Board did on Thursday night, they voted to reduce expenses by $7 million. That is more than twice the deficit Davis is facing right now.

How does one cut $7 million? The Woodland Daily Democrat hardly gives a vivid description of this. Although apparently the public outcry got them to restore a number of programs including the elementary music program.
"Trustees also allotted $793,773 in funds to restore several programs and positions -- two high school vice principals, zero and seventh period, the Elementary Music Program, a high school librarian, an elementary school counselor and an extra teacher for Pioneer High School's Block Scheduling -- that were set to be cut."
It continues:
"While the elementary music program was restored, the board made several reductions to other programs, school budgets and at the district level.

School sites throughout the district froze open positions and cut 10 percent of discretionary funds, the enrollment center was restructured, elementary vice principal positions were cut, and teachers were reduced along with many other cuts. After much discussion, the board agreed to close both Grafton and Willow Spring Elementary schools."
That's right Woodland voted to close two elementary schools.
"Willow Spring and Grafton elementary schools were hotly debated reductions with many parents speaking in favor of leaving the schools open, to no success.

While Trustees Carol Souza Cole and Rosario Ruiz-Dark said they were not in favor of making these decisions without more information or more community input, other trustees said the schools were already set to be closed and students would get a good education no matter where they went. The board voted 5-2, with Trustees Souza Cole and Ruiz-Dark opposing the recommended cuts."
I will leave it to our friends at the Woodland Journal to work out the rest of the details. I have heard enough. This is not about picking on Woodland. Woodland is not alone. School districts all across the state are having to make veritable Sophie's choices between closing down programs and closing down schools. Many will have to do both.

Davis is quite fortunate in a lot of different ways. Some people have suggested in light of certain decisions that they regret voting for Measure W. Well let's do the math. Without Measure W just add another $2.5 million to the deficit that Davis has. That would put Davis' deficit for next year up over $5 million. Take out the generosity of the Davis residents and their $1.7 million in donations last year. We would be looking at the kind of cuts that Woodland is right now.

In other words, Davis is fortunate. A wealthy school district, in a wealthy community that is generous and supports its schools. That is a great thing.

The horrible thing is that across the state many students are not nearly so lucky. They do not live in communities that can dip into their bank accounts like Davis did last year. Heck, Davis probably could not do it so easily this year as they did last year. The economic crisis has hit home in this state. The unemployment rate is over 10%. Tax receipts are way down. The state is slashing billions from schools. That means millions slashed from local school districts, most of whom do not get parcel tax money to make up the difference.

The result of this is that the relatively wealthy and well off students in places like Davis will get by just fine. Their community will give just enough to avoid the kind of wholesale draconian cuts that Woodland is facing. We will tighten our belts. Our teachers may have to take pay cuts or face a small number of layoffs. But at the core our programs will survive and our students will thrive.

There are people on this blog who seem to take these things for granted. They seem to believe that schools have failed us. They seem to believe that there will be no consequences from cutting billions across the state from schools. I disagree with that assessment. I don't think schools have failed us. I think we've failed our schools. Not in Davis, but across the state of California.

California ranks in the middle of the country in per pupil spending, and that was data from a few years ago before the latest round of cuts. California was below the national average. And those are in absolute dollars, it does not account for the higher cost of living in California compared to many of the states below California in per pupil spending.

There was good breakdown last year in my other publication, the California Progress Report.
“The Census Bureau numbers show that California still spends $652 less per student than the national average, even though their figures on "student spending" include funds from outside the state that never make it into the classroom, which arguably inflate the figures. The Census Bureau estimates lump in payments made into the state retirement system, as well as federal funding beyond what the state spends. But even including those calculations, California's significantly below-average spending on students is abysmal. By comparison, the non-partisan national publication Education Week issued a report showing that California spends $1,900 less than the national average, because it only includes the actual funds spent by each state on each student.”
"even though we have extremely high costs, housing in particular, our teachers are still paid below the national average on a per pupil basis: $3,479 in California - compared to the national average of $3,811."
The bottom line is that we get what we pay for. If California were near the top of the barrel in terms of students scores, then maybe, just maybe we could justify our lack of spending. But it is not. It is towards the bottom.

For years we are told that the problem is just that we pay too much on administrators. Sorry folks, the district has laid the budget numbers bare. Only a tiny percentage of DJUSD's general fund budget goes to administrators. And that percentage has gone down. Davis has cut out it's Associate Superintendent of Education Position, it has cut to the bone its fiscal office. There is nowhere else to cut. The raised salaries that people are moaning about do not amount to a hill of beans in the scheme of things--and even they are probably coming off the books and then some.

Davis is not alone. Across the state, districts have done the same. This is not pork. Many of these are essential positions and their absence requires other people to do more work for no additional pay. A lot of additional work. For years, teachers have had to purchase educational supplies out of their own pockets. The same teachers who are paid below national average per pupil--which means that we are teaching to more kids than the national average. California teachers teach to about 22 kids whereas their counterparts teach to 15 kids. Think that might make a difference in the service they receive in return?

The sad thing is that all of the numbers I have just shared with you are numbers that existed before we cuts roughly $7 billion from the state's educational budget this year on top of whatever cuts were accrued last year and the lack of COLA for increased costs of living.

We indeed balanced our budget temporarily through huge real cuts (not simply slowing down the increases to programs, but actual cuts) and tax increases, but we did at a huge cost. Go to Woodland and you can see the very human cost it is going to take.

Remember that this is the childhood of those kids. This is their education. This is their future.

One final note: Somebody had the audacity of accusing me of being a Republican yesterday because I favor fiscal responsibility in the city of Davis and will not support new taxes without an assurance of accountability and responsible new contracts for upper level city employees. What these individual apparently do not get is that we do not have the money and resources anymore to be living the way we did in the 1990s or even the 2000s. We have to pick and choose what programs to support. For me, education has to be THE priority. Everything else has to come second.

The priorities in the city of Davis are out of whack. We are sitting on a $13 million deficit of unmet needs. That's road repairs and infrastructure upgrades. If we do not get our public employee compensation and pension system under control, we cannot keep up with the things that we really need to put money into.

Sorry but there is really not one pot of money for schools and one pot for the city. It is but one pot of money and we have to make tough choices.

A liberal in these times has to be fiscally responsible because there is no money to just throw around anymore.

---David M. Greenwald reporting

Friday, February 27, 2009

Heystek Joins Vanguard's Call Against New Taxes without Reform

Back on February 3, the Vanguard made a bit of splash by invoking the spirit of Bush I circa 1988, saying "Read My Lips... No New Taxes."

In truth, despite how it sounded, it was not a declaration against taxes, or even new taxes. It was suggestion that Davis gets its fiscal house in order.

The city of Davis faces both a rare crisis and a rare opportunity. Right now, the city faces in the short term an economic downturn which has led to a loss of tax revenue. This situation calls for short-term budget cuts. However, the city has longer term structural deficit problems, it's facing a crisis of unmet needs, it's facing a problem of runaway top employee salaries, a pension problem, and an unfunded liability problem.

Those problems existed before the current economic crisis, but ironically the current economic crisis gives us a glimmer of an opportunity to get our fiscal house in order.

This economic crisis has already caused the city of Davis to scale back on its original plans to fix the longer term problem with new taxation. Instead, they are looking to manage the economic situation by renewing the current taxes.

As the Vanguard wrote on February 3, it has become
"clear that neither the council nor city staff wanted to raise or impose any new taxes in the near future to solve the city's growing problem of unmet needs. While I agree with that approach, it does not solve the city's problems either in the short term or the long term.

Instead they have suggested that they will simply place the current taxes back on the ballot. That would include an extension of the Parks Tax, which is a parcel tax requiring two-thirds vote and an extension of the half-cent sales tax."
The Vanguard took the position that even this renewal of taxes would be opposed unless the city gets their fiscal house in order in part through restructuring employee contracts and pensions.

At Tuesday night's Davis City Council Townhall Meeting, the Vanguard's call was heeded by Councilmember Lamar Heystek. In January, a similar townhall meeting drew 30 members of the public, at least. This time the meeting was poorly attended. Just three members of the public attended as opposed to huge amounts of city staff including all of the department heads.

Councilmember Heystek told the council and city staff that he would oppose the renewal of the new taxes unless the city dealt with the fiscal problem and new employee contracts in a responsible manner.

His announcement seemed to stun city staff who immediately took notice. The City Council is not directly involved in employee negotiations, although they do approve the final contracts. However, Mr. Heystek believed it was the only leverage he had.

Two of his concerns are asking city employees to take more responsibility for their post-employment benefits. In addition, the city should re-examine the method by which we deliver services such as fire.

The Vanguard earlier this week demonstrated that the city's costs for fire are disproportionate to our service calls. A situation the begs for a restructuring of fire staffing. The Vanguard is fully committed to insure that there is no loss of service or response time, but believes alternative and less costly models can and should be applied to improve our fiscal responsibility.

Right now that appears to be several changes the city can make to the structure of contracts that would contain city costs:
  1. Hold the line on top employee salaries
  2. Short term hold the line on all employee salaries during the economic crisis, in the future bring them up only as far as inflation takes us.
  3. Restructure the pension system by increasing employee contributions especially at the top end and moving it from "pay as you go" to full funding.
  4. Look into cost containment for health coverage
All of these would need to be done with collective bargaining agreement. The alternative to restructuring the pension system would be to create a two-tiered system. The bargaining units could make the decision as to which is more beneficial.

Now that Councilmember Heystek has pressed for the city to engage in strong negotiations, hopefully other members of council will follow. Councilmember Sue Greenwald has long been outspoken in terms of wanting to reign in the contracts and pensions of the highest paid employees and upper-management.

Once again it is important to emphasize that this is not an effort to put down either the average city employee or employee unions. The job of an employee union is to get the best possible contract for their respective bargaining unit. It is the job of the city however to be an effective counter to that weight. They represent the interests of the voters and the taxpayers. When one particular unit uses their political muscle and resources to elect favorable councilmembers while the other units do not engage in overt politicking the system begins to breakdown.

As we saw with the Grand Jury report in January, the impact of throwing $30,000 or more into a political race can be decisive in the actions a council is willing to take. Even the Mayor who has been outspoken in favor of fiscal responsibility wilted under the pressure of her backers back in January.

This will thus be a long and difficult fight, but Councilmember Heystek's actions on Tuesday put the city staff on notice that business as usual will result in a less than unanimous endorsement of their current policies.

The Vanguard urges other members of the council particularly Mayor Asmundson to quickly follow suit.

---David M. Greenwald reporting

Thursday, February 26, 2009

Focusing the Debate on Davis High School's Stadium Renovation

Back in December, the DJUSD school board made the decision to prioritize the modernization of the football stadium over that of Emerson Junior High. This has generated a lot of criticism for the school district from a number of different quarters. In general this criticism has been ill-founded and based on misconceptions of funding and other factors.

The purpose of this article is to clarify some of the issues. While there seems to be a good deal of criticism to go around, it should be criticism that is fact-based rather than based on misinformation.

I largely decided to do this article because the school board and district's perspective is, we had a full public discussion about this at least twice in open meetings. People can view the tapes of those meetings if they are confused.

That is of course not how it works. The district needs to do a better job of communicating with the public. People do not watch the meetings and they will not watch the tapes of the meeting. At least most people will not. They may not even read the newspaper on the issue. But that will not stop them from forming opinions and even expressing those opinions.

Likely then that means the issue of communication falls to entities such as the Vanguard which can breakdown complex issues and discuss them at length rather than being confined to 500 words, 800 words, even 1200 words.

For that reason I have decided to go ahead with this explanation, even though I'm not sure what decision I would have made had I been a board member in December or February. Criticisms as I said should be fact-based and then people can make up their own minds.

A letter appears February 20, 2009 in the Davis Enterprise from 24 teachers at Cesar Chavez Elementary School.

They wrote:
"Fourth, we oppose the plan to build a $10 million high school stadium while there are schools such as Emerson Junior High which, last year, was under consideration for closure due to dilapidated facilities. Additionally, the long-term effects of the stadium financing on the general fund are not clearly delineated, and a clear payment plan has not been developed."
For this we need to back up several steps. Last spring, the district was facing a $4.5 million deficit. To that into perspective, what we face now which is roughly $3.1 million is a two year deficit. The scale of that deficit dwarfed this one in a lot of ways. So one thing the district was looking at was they knew off the bat they could save over $600,000 by closing a school.

The next part of this was the condition of Emerson Junior High. The district knew that it needed upgrades and repairs. However, what they did not know at that time was whether those needed upgrades and repairs were safety violations. This all happened so quickly that the district was in danger of making decisions based on less than complete information. This is very important to understand, to a good degree, the condition of the facilities in Spring of 2008 was unknown and all discussions were speculation.

Based on this and the problems of logistics that arose, the district made the decision not to close Emerson Junior High at that time and evaluate the facilities at a later point.

In June 2008, the district completed its evaluation. The evaluations indicate that the district will need to spend between $10 and $15 million on upgrades to Emerson. However, what they were told was that this was not an imminent safety problem. Much of the needed upgrades and repairs were to get it up to date with current code requirements. According to the consultants at the December meeting, that can happen at any time. Basically those requirements only kick in if the school were to do a major construction project.

School board Tim Taylor made it a point to talk about this back in December. He acknowledged rumors of deteriorating conditions in the buildings at Emerson but again added that there rumors were not borne out by the actual surveys by architects.

So when the teachers say there were school such as Emerson that were under consideration for closure due to dilapidated facilities, that is both misleading and really out of date information. The correct statement would have been that the district was looking to cut costs last spring and the conditions of the buildings while not known at the time, were cited as a possible reason for closure of the school.

I have said before and I will say again, I do not believe that any board members or any administrator wants to close Emerson. That is based on personal discussions with just about all of them. Moreover, looking at the three year finances, I do not see a reason that the district would need to close Emerson. They may play with the configurations, but I believe with strong certainty that Emerson is in no danger at this point of closing.

I spent more space than anticipated addressing the Emerson rumor, but that was important to put to bed. At a future point, there will be an article that fully explains the financing of the football stadium at Davis High School.

At this point, here is what we know. The district believes it can get redevelopment money for a portion of this project. That redevelopment money can only be used for school facilities, not for teacher salaries or other instructional expenses.

Second, the district is planning on borrowing about $4 million against future revenues from the school district's community facilities districts. Again those funds can be used for school facilities only, not for teacher salaries.

See a pattern here. I am uncertain what the teachers meant when they stated: "the long-term effects of the stadium financing on the general fund are not clearly delineated." To my knowledge there will be no impact on the general fund since these monies do not and CANNOT come from general fund monies.

There has been considerable public outcry to this point about the project. In part the money issue is driving this. Part of that stems from the perception that the district is starving for money on one hand but taking up a $10 million project on the other. Again, that perception is wrong and misplaced because of the differential in types of funding.

The other issue with funding is that the district chose DHS over Emerson. They did this in December. There is no getting around the fact that they consciously prioritized DHS Stadium over Emerson. As I have already explained that does not mean they are closing Emerson. They simply believe that DHS Stadium is more pressing.

Again, I turn to a letter to the editor, this one from New Year's eve:
"Unquestionably, the appalling condition of the Blue Devils' stadium calls for its replacement. But in these desperate economic times is a costly restoration the best option? Especially when it likely means stalling desperately needed restoration at Emerson."
One of the questions is of course whether the restoration at Emerson is really desperately needed.

However, what is clear is that this is not merely an issue of the football program at the high school. This is not merely a matter of putting academics ahead of athletics or the appearance of vice-versa.

What this comes down to is a health and safety issue. The district was told by consultants and by students that there are safety issues not just with the football field, but with the track and with the stands. The district believes they face liability if this issue is not corrected and that liability would come out of the general fund whereas the repair comes from facilities money.

Again, that is the issue and the basis on which they made their decision. Are there alternatives to renovating the field? That is subject to debate and discussion. The district seemed to consider alternatives such as using Toomey Field, that seemed to be cost-prohibitive as well. Moreover it was impractical for everyday usage. Remember it is not merely the athletics programs that use the facilities but there is everyday usage.

Regardless, I think the question about alternatives is a fair discussion point. I also think the question about prioritization is a fair discussion point as long as understand the facts at this time suggest that Emerson is not going to be shutdown due to health and safety issues and the district's consultants believe that DHS Stadium faces more imminent and significant health and safety concerns than Emerson.

So to quickly summarize here: Emerson is not closing due to health and safety concerns. DHS Stadium will not use monies that could go to the classroom. The district believes the situation is more critical at DHS Staidum where Emerson mainly faces code upgrades that are not needed until construction occurs in the future.

---David M. Greenwald reporting

Wednesday, February 25, 2009

Westlake Grocery Deal in Doubt As Owner Allegedly Reneges on Handshake Deal

In an interview with the Vanguard, the Davis Advocates for Neighborhood Groceries (DANG) say they thought they had a deal. Consultants for Farrokh Hosseinyoun, the majority owner of the Westlake Plaza Shopping Center on Lake Boulevard in West Davis had found a suitor for the Westlake Plaza's empty grocery store spot.

Enter the Delano Family, owners of eight Bay Area Grocery stores bearing the same name. They operate Delano's Markets in San Francisco, Mill Valley, Tiburon, Fairfax and Novato, many of them very upscale in appearance. Adding to the intrigue is the versatility of their product and the vast experience of the Delanos in the grocery business and their genuine interest in coming to Davis and Westlake Plaza.

The principle owner of the Delano's Markets, an independent family owned chain, is Harley Delano, 72, who has been in the grocery business for 55 years. He previously was the president of several food store chains such as Cala & Bell Food Stores in San Francisco as well as a divisional president to Kroger's and Lucky's store chains and he has sat on the board of directors of a number of other grocery stores. His son and co-owner, Dennis Delano has been in the grocery business for more than 30 years. Harley is the CEO and Dennis is the President/COO of their family run business with other family members actively involved in the day to day operations.

They possess the rare ability to create custom grocery stores that are neatly tailored to the clientele in the specific neighborhoods and communities in which they operate. In Davis, the Delano's were looking at opening a specialty store with an upscale appearance and emphasis on organic and other natural foods. In other markets, their stores have as many as 198 organic items.

Dang Board Member Carolyn Hinshaw was quoted on the DANG website as being impressed with what she saw during a January 7, 2009 tour of the Delano's Bay Area stores.
"My impressions were immediately favorable. I feel that Delano's would be a very good fit for West Davis and that it is a business that the community and the City should get behind and support."
The Westlake Plaza store site is zoned for a minimum of 15,000 square feet of grocery store space. However, the Delanos wanted less space and DANG believed that they could have a good store at 11,000 square feet. The remaining space would have presumably gone to other retail.

DANG was willing and excited to accept a temporary zoning change to allow a grocer such as Delano's Markets to operate an 11,000 square foot store, hoping that the remainder of the 23,000 square foot footprint would be filled with coffee shops, and other businesses whose core activities centered around food.

It was at this point, that the Delanos and DANG began to run into obstacles, many of these of the owner's own doing.

Previously, when Food Faire left Westlake Plaza, now nearly three years ago, Mr. Hosseinyoun and and his minority partner, Jim Barcewski, had gutted and stripped the entire grocery store building leaving it essentially a shell of its former self. They filled in the cargo bay rendering the receiving door to the rear of the store useless. They tore out the insides of the store such as the interior walls, the rest rooms, the floors, air conditioning ducts, insulation, and other grocery store infrastructure. As a result, there is a huge cost of tenant improvements that the landlord must do to repair and restore the building back to a usable state prior to leasing the property to a new grocery store tenant. DANG estimates that it may take up to well over $1 million or more to return the gutted former store back into an operational grocery store.

There have been serious questions raised by the neighbors about whether the property owners even wanted to rent this space as a food market in keeping with the City's Ordinance which requires a minimum 15,000 square foot grocery store at the shopping center. Apparently, Mr. Hosseinyoun and Mr. Barcewski made the location as unappetizing as possible and then lobbied City Staff and the Planning Commission to reduce the zoning requirements down to 3,000 square feet. This is basically the size of the Circle K store which is little more than two blocks down the street from Westlake Plaza. DANG and other neighbors want a full service and fully operational grocery store and the 3,000 square feet proposal does not cut it. Fortunately for them, the Planning Commission agreed and denied the application.

However, since then Mr. Hosseinyoun has pledged to bring a grocery store to Westlake. He has put money into the property, finally making long overdue repairs and upgrading the site's exterior appearance.

It was back in September 2008 that the Delanos first expressed an interest in bringing their store to Davis. They estimated they needed financing of between $750,000 and $800,000 to make the deal work. This funding would be used to purchase the needed equipment, fixtures, coolers, software and electronics, cash registers which is usually borne by the grocery store operator who becomes the tenant.

Mr. Hosseinyoun even offered to loan them $250,000 to help close the gap. At that point they needed another $500,000 to $600,000 in additional funding and they began their search for a lender.

DANG worked with the Delanos and had them talk to First Northern Bank, but according to the members of DANG, they are not sure what happened. First Northern Bank backed out, DANG suspects because Mr. Hosseinyoun decided he either could not or would not continue with his commitment to provide $250,000 in capital to the Delanos. Once that offer came off the table, First Northern took a different view at the ability to finance the Delanos.

This was extremely frustrating, needless to say, to DANG. In addition to opening up a market, the Delanos were ready to move their cooperate office to Davis leasing additional space at Westlake Plaza to do so. The Delanos would have hired 30 to 40 people to work in the Davis store.

This has driven a wedge between DANG and the owners of Westlake. DANG suspected that perhaps Mr. Hosseinyoun got cold feet because the project was becoming too close to reality. Mr. Hosseinyoun claims, according to DANG, that the downturn of the economy was causing his funds to dry up or that he feared they would dry up. DANG seems skeptical of the claim.

DANG has let Mr. Hosseinyoun know that he needs to step up to the plate or he needs to find another lender. At this point Mr. Hosseinyoun is claiming that it is DANG's responsibility to find financing.

These events have caused DANG to step back from their willingness to partner with Mr. Hosseinyoun. They no longer feel they can trust him.

On February 6, 2009, they fired off a letter to the Mr. Hosseinyoun, copying members of the Davis City Council as well as the Vanguard.
"DANG is aware of the discussions that have taken place at your meeting last Thursday with both First Northern Bank and the Delanos. We were surprised to hear about this new "residential" component scenario, and are currently taking no position on the issue other than to acknowledge the fact that this distracts from our number one priority of securing a good grocer/anchor tenant for Westlake Plaza, in a timely manner.

We were disappointed to hear that you and or FNB did not offer any realistic financing solution for the Delanos. And in fact your having withdrawn your $250K loan offer to the Delanos, had cooled FNB's interest in financing the balance necessary to bring the Delano’s Market to Westlake. We are also aware that financing the entire $750-800K needed by the Delanos, is well within your means.

DANG has been in recent contact with the Delanos to ascertain as to whether or not they are still interested in pursuing their "Westlake Project". At this point they still are . . . and so is DANG! They have their caveats . . . and so does DANG!"
Among the Delanos caveats is that they will not encumber their personal residences or property in order to secure a loan or a line of credit.

DANG's Caveats include the following:
"1)- That the Delanos total financing needs of up to $800K are met by you, either through a direct loan (or line of credit) from your resources for the full sum, or your guarantees in conjunction with a lender of your choice.
2)- That the Delano grocery project is given your first priority, with the goal of having the store open by September 1, 2009 to take advantage of UCD student arrivals and the 4th Quarter Holiday sales.
3)- That the current retailers and restaurants continue to be given rent reductions so they can try to survive while the anchor tenant is being restored to the property.
4)- That any plan to subdivide, residential rezone, and redevelop the property be delayed until after the Delano's grocery is open, as this process will be too lengthy for the Delanos or your current retail tenants.
5)- That the current total square footage of retailers and restaurants is secured in any future redevelopment so as to maintain critical visitor traffic."
They conclude:
"DANG wants to be assured that the above caveats are met, and that a grocery store opens soon. At the opening of a new neighborhood grocery store, DANG will fully support reducing the zoning grocery requirement of 15,000 sq ft down to the 11,000 sq ft requested by Delanos. We will not support reduction of the 15,000 sq ft requirement prior to the store opening, unless we can agree to create a legal mechanism that ensures complete and acceptable performance."
In response, Mr. Hosseinyoun asked the members of DANG and the community to come up with the difference.
"I urge you, the community, to come up with the difference in order to make this deal happen."
DANG responded:
When your $250,000 commitment was hastily withdrawn from the deal it did 'SHOCK' everyone and appears to have undermined the confidence of the DeLano's, DANG Board, First Northern Bank and probably the City of Davis. As a result, DANG's good faith efforts to help you recruit a grocer, approach the city, other financial institutions and the West Davis community on your behalf are now suspended.

Based on your recent action and on your history with us and the community, DANG is not willing to accept your suggestion for us to take on the additional responsibility of finding financing for your project, only to have you torpedo it again! When you find a solution for the financing we really hope the DeLanos are still interested! Until then DANG will keep the community activated, and will keep pressure on the City to maintain the current zoning restrictions and to enforce City code compliance on the property.
DANG board members also expressed frustration at the city of Davis. The impact of this vacancy is taking a terrible toll on the other businesses in the shopping center. A large number of the retailers are barely hanging on, and holding out in hopes that a deal can be reached.

But thus far the city is doing little to nothing. They simply have not taken an active role in trying to bring a grocer to this location.

Apparently the property owners still have a pending appeal of the Planning Commission's decision which is still listed on the City Council's long range calendar. Moreover, as DANG pointed out, the City has never enforced a number of code violations. They put a notice for instance to repair the loading dock. It was a two week notice given more than two years ago. It has not been repaired. The broken window in the front of the building which has been there for years is also a code violation that has never been enforced by the City.

Asked what is going to happen next Eric Nelson, one of the members of DANG declared, "we're going to wait, keep our powder dry and our guns loaded."

Russ Snyder, another DANG member was more optimistic. He believes that they have exploded the myth that a market cannot do well in this location. Here is a very experienced grocer who is confident that a store can be run there. There is no question in their minds. The Delanos are willing to put money and their reputation on the line.

Moreover, Russ Snyder suggested that the center's landlord's decision to gut the location has created a financial liability that will make it difficult and expensive to get the location back in shape to house a grocer.

But most of all he feels like they are close. In a meeting with DANG, Mr. Hosseinyoun said that he is committed to having a grocer at this location. But if he's indeed committed, he needs to make the investment. Everyone agrees the Delano's Markets would be a great fit and successful. So from that standpoint it would seem logical to make this deal.

Eric Nelson also pointed out that the Delanos are just one of several grocers who had the same feeling.

DANG member David Thompson suggested that there is not much they can do at this point. They tried to put as much pressure as they could during the last month to encourage everyone (the property owner, the Delanos and the bank) to close the deal. They can't really do anymore than they have done. Mr. Hosseinyoun seems willing to sit with an empty food market and an empty shopping center.

Eric Nelson speculated that perhaps they will sell the property to someone who would actually care enough to get a grocer because he feels it is obvious that Mr. Hosseinyoun does not.

David Thompson added that DANG was willing to accept an 11,000 square foot store as long as there was an actual grocer who had the qualities they were looking for and the services people needed.

It is DANG's position that they are not going to agree to zoning changes generically, the only leverage they have to get their West Davis neighborhood a real grocery store is the current zoning.

David Thompson also expressed concern about what will happen to West Davis if it does not have a grocery store. Right now he is concerned also about the future of Emerson Jr. High School. If people have no grocery store or school it will be a tremendous hit to West Davis.

As Russ Snyder put it, it is about a community where people come together and can interact rather than a place where a bunch of people come and sleep.

Right now it is a community that has been missing a grocery store for nearly three years, it is a large number of businesses in the shopping center in deep fiscal jeopardy, and it is a community group that has grown tired of being given false promises and broken handshake deals.

If there is to be a grocery store that moves into Westlake, it needs to happen soon for the sake of this community, this neighborhood, and the fiscal and financial health of the city. It is high time that city staff start taking as much of an interest in this shopping center as they have taken in trying to insure that Trader Joe's and Target come to Davis.

---David M. Greenwald reporting

Tuesday, February 24, 2009

Vanguard Analysis: Davis Fire Has High Cost Per Service Call

One of the big questions facing the Davis Fire Department is the issue of staffing and the issue of whether or not the fire department needs a fourth fire station. Data presented by the Davis Fire Department has often shown that Davis has a relatively low number of fire fighters per thousand people, a high population per station, and a low cost per capita.

The Vanguard's analysis largely confirms those findings that would seem to suggest that davis is in need of more fire staffing, an additional fire station, and that it is run relatively cost effective.

However, the Vanguard moves beyond that statistical analysis and analyzes these measures looking number of service calls as the key variable rather than population. Using the metric of service calls, we find Davis consistently inefficient. Davis ranks at the bottom in total service calls per year over the four year period, at the bottom in calls per 1000, in the middle of calls per fire station, and fourth to last in the staffing ratio for service calls.

The key finding here is that when you look the cost per call for the city of Davis is it the fourth most expensive of the 12 sample cities at just under $2100 per service call. It ranks below Palo Alto, Folsom and Roseville. And just above the city of Berkeley and the city of San Luis Obispo. However, even that is not the complete picture.

Davis provides Basic Life Support (BLS) and requires firefighters to be EMT's. However, the highlighted cities provide Advanced Life Support (ALS). That means that in addition to fire and EMT services, they also provide ambulance transport which requires Paramedics. In other words, they are providing far more service with their expenditures than Davis does. Whereas Davis has to outsource ambulance services for an additional expenditure.

Looking at it that way, Davis provides the highest cost per service call of any city only providing fire and BLS.

The key for these data is the low volume of service calls overall and the low volume of service calls per 1000 residents. Davis is at the very bottom in terms of number of service calls and far on the bottom in terms of number of service calls per 1000 residents.

On the other hand in terms of calls per station, Davis ranks in the middle at seventh which probably suggests that its current number of stations is about right. Adding to that fact is the fact Davis is the smallest of these cities in terms of square miles (not shown) at 9.9 square miles. It is also second in population density to Berkeley which has 101,000 residents for its 10.5 square miles as opposed to Davis' 63,000 residents for its 9.9 square miles. Thus the physical area of Davis is the smallest and its population heavily concentrated.

This is important to understand because in terms of population per fire station Davis ranks only behind Vacaville and just ahead of Fairfield in terms of the number of people each fire station has to serve on average. Davis also has the second fewest fire fighters per thousand residents, this time just ahead of Fairfield and just behind Napa and Vacaville.

As was mentioned earlier, Davis also ranks second to last in terms of cost per capital. Davis spends just under $144 per person on fire services, that ranks well ahead of Fairfield's $112.50 which was the lowest cost per resident. Davis ranks just behind Napa which was at $147.66.

These statistics are generally used to support additional fire personnel and a fourth fire station. However, they appear to be mitigated by actual need in terms of number of service of calls.

So while Davis ranked 9th in actual overall spending on fire services, again accounting for the fact that five of the municipalities use their fire budget to provide ambulance and paramedic services as well, Davis ranks fourth in that cost per service call.

Davis needs to evaluate its staffing needs based on a full array of statistical measures. As the city moves into a cost saving mode, there are a number of issues it needs to weigh in terms of staffing of the fire department.

The first question is the one that the Vanguard has touched on the most and that is salary of the individual fire fighter in addition to their their overtime, total compensation, and perhaps most importantly their pension plan that will pay them 3% at 50 for every year of service they have provide pro rated to their ending salary.

The second issue is it needs to evaluate its staffing needs. Davis unlike a lot of other cities uses a four person unit. If the city were getting a high number of fire calls, a four person unit might be preferrable, but the call volume and the ratio of fire calls to other emergency calls suggest that this is not the case. Therefore the city might want to look into other staffing configurations that will allow the department to continue to serve the public at the highest possible level while conserving the costs.

Along the same lines, the city might evaluate whether every fire station needs to send out all of its equipment for every call. This is done in case of multiple calls but the result is a loss of efficiency and cost effectiveness. Again, we do not pretend to know the answers here, only pose the questions of things the city can explore to reduce cost.

Finally the issue of the fourth fire station arises. The fire department has long maintained that response time dictates a fourth fire station. The fourth fire station would add construction and maintenance costs, but also staffing costs.

Our analysis calls the need for the fourth fire station, or at least a full fourth fire station into question. The number of calls, the overall staffing, and the population density all point to the need to maintain current levels of staffing at best. A full fourth fire station with equivalent staffing looks like a great waste of resources according to this model.

That is not to completely rule out a fourth fire station. However, the city will need to develop an alternative model for it. A fully staffed fourth fire station, would greatly add to the cost per call. Resident surveys already indicate a high satisfaction rate. So the question is really what is the safety bang for the buck by adding another four person team on call at all times, which would raise the cost by another third.

The city might be better off developing some sort of alternative staffing model or a hybrid model if it believes there needs to be a greater spread throughout the city geographically. However given the compactness of the city, that is not altogether clear. Moreover, given the relatively low call volume Davis receives, the need for additional resources do not seem pressing or justified.

Davis needs to get its fiscal house in order overall. Right now, the city's fiscal situation is not in crisis mode but there are problems on the horizon if the city fails to contain costs. Fire staffing and salaries would seem to be one area that the city needs to look into in order to do so.

---David M. Greenwald reporting

Monday, February 23, 2009

District Teachers Face Agonizing Choices

Under ordinary conditions, it seems unlikely that one would find a person more supportive of teachers than myself. I come from a family of teachers, I have myself been a teacher at times, and I believe in general teachers are unpaid for the importance of the job that they perform. Most people who suggest that teachers have an easy job and work only nine months, have either never taught themselves or never put a full effort into teaching. I am constantly amazed that teachers have the stamina to teach for eight hours and then go home to grade papers (no easy task) and prepare lesson plans.

I say this because after reading the full comments from the teachers from Casar Chavez Elementary School who also spoke up during public comment on Thursday evening at the school board meeting, I'm not sure I could really disagree with them more.

They write:
"First, we do not accept being placed in a position of choosing between salary reductions or seeing colleagues lose their jobs. It is the responsibility of the budget officer, the superintendent and the board to make informed, honest, transparent and responsible decisions.

At the all-district staff meeting held by Superintendent James Hammond on Feb. 11, we were given an ultimatum: Either we agree to a 4 percent permanent salary reduction, before a state budget is even approved, or there will be layoffs this year. We believe there are many more options than just salary reductions or layoffs, and it is incumbent upon the board to ensure that all options are thoroughly investigated."
I am unsure of where these individuals have been for the past few months, but if they read the newspaper at all during that time they might realize that across the state government employees (of which they are one) are having to make this painful decision across the board.

Yolo county employees have taken voluntary furloughs as the county faces a $22 million deficit for next year, in hopes that their colleagues will not be laid off. State employees represented by SEIU have reached agreement with the Governor to take what amounts to a 5% paycut, which is an improvement over the 10% paycut imposed by the Governor. These furloughs and paycuts are happening across a state that has recently had to cut $15 billion in spending due to the worst economic recession in 70 years.

The same thing is happening in the private sector--employees are being laid off in scores. There has been at least 500,000 and sometimes approaching 600,000 job losses per month. So the fact that the district is giving them a choice as to a paycut or pink slips, is hardly unique or surprising.

The teachers have a choice to make because right now the district is running deficits for the foreseeable future in the $3 million range.

The school board takes no joy in this. In fact, I have spoken recently to just about every member of the board and the reactions I have gotten borders on heartbreak for having to make these decisions. They did not run for school board to lay off teachers. But that is the choice that they now face.

I don't see many options other than salary reductions or layoffs and I have been over the budget as much as anyone this side of Bruce Colby. But I suspect if you have a counter-proposal the district would be glad to hear it.
"Second, the top four district administrators made an offer to reduce their salaries. This offer is contingent on the Davis Teachers Association's agreement to teacher salary reductions. It is wrong to pressure the teachers with a misleading public gesture. These administrators have recently negotiated with the board a raise for the 2009-10 school year as well as ongoing yearly increases. These increases add up to as much as 15 percent since October 2006."
I agree with the teachers that it was a mistake for there to have been any kind of raise for administrators. I think one of the worst decisions made was the decision to give Bruce Colby a 5% raise in December. It set a bad precedence and it looks bad to the public. Unlike last year, I think we had a pretty good idea as to what coming down the pike.
"Third, when asked about the magnitude of the administrators' raises, Superintendent Hammond expressed that removing these raises 'would not solve the budget problem.' The teacher whose position is erased by these raises certainly will have a budget problem to solve. "
On the other hand, they have offset these raises by cutting back on their own support staff, not through layoffs but through attrition. In essence, each of these individuals are having to go without support staff or performing the work of multiple individuals. Again I understand the point the teachers make, I agree with them to some degree, but they are focusing on literally pennies on the dollar here. There could have been no raises, and we would still be focusing on this plan which would require either layoffs or salary cuts. This is largely a distraction from the main issue.

"Fourth, we oppose the plan to build a $10 million high school stadium while there are schools such as Emerson Junior High which, last year, was under consideration for closure due to dilapidated facilities. Additionally, the long-term effects of the stadium financing on the general fund are not clearly delineated, and a clear payment plan has not been developed."

My understanding is that there are no impact of stadium financing on the general fund. That money comes strictly from facilities money. There was redevelopment money used to finance a portion of this. There was a strong safety issue and liability issue that exists with the stadium in its current conditions. My understanding of the issues with Emerson is that much of the repair and upgrades have to do with being out of date with various codes and can be addressed at a later point. No one believes that there are either safety or liability issues with Emerson.

While I would tend to agree in part that the district has done an exceedingly poor job of explaining this to the public. That it looks bad to be crying poor at the same time you undergo a $10 million renovation of a football field. Nevertheless, much of that public outcry is based on poor understanding of how school financing works and the fact that facilities money and general fund money that would go to instruction are completely separate, money available for facilities upgrades is not available for use in the classroom.
"We believe that salary reductions should be negotiated fairly and honestly, and only after the state budget is approved and allocations to the Davis school district are clear. Additionally, the offer of the top four district administrators should not be contingent on teachers' agreement to salary reductions."
To me this represents a lack of understanding of the collective bargaining process. The district cannot unilaterally impose changes to a contract. The changes to the contract such as reduction of salary must be approved by the Davis Teachers' Association. Therefore to a large degree the ball is in their court on this one.

As DTA President Ingrid Salim said on Thursday, it was her perspective and possibly that of the DTA membership that they would take their chance with 20 layoff notices (by her count, although the district is approving 36.6 FTE position cuts) than taking a salary cut. That is within their right to determine.

The second part of that is that they are demanding the administrators take a cut regardless. That cut is largely symbolic anyway. We are talking about maybe $30,000 or $40,000 in savings against a deficit of over $3 million over the next two years.

I am all for them taking it, but let us not make this out to be bigger than it is.

Unfortunately the district and board are taking a fiscally responsible step of identifying all of the necessary cuts up front and proposing a balanced budget for the three year period.

The really bad news is that this may not be rock bottom. There is increasing belief that the May revised budget from the state will have another deficit in the 11-figure range that will result in more cuts to education funding.

In short, while I sympathize with the position of teachers and all district employees as well as all state employees, I think that there is going to be little choice but to make the tough decision between salary cuts and pay cuts. I also think that the teachers are setting themselves up for deep layoffs in May, deeper than projected right now by not taking a further look at pay cuts.

By all means identify alternative budget cuts. All entities should do that. But if you look at the district budget, you quickly see where the majority of money goes, and it is to teachers.

It is my hope that the teachers work together with the district and board to make this as painless and cooperative a process as possible given the horrible circumstances that we face in this district, in this county, and in this state at this time.

---David M. Greenwald reporting

Sunday, February 22, 2009

Dunning Misunderstands the Need for Local Agencies to Maintain Reserves

The Vanguard has all but stopped responding to Bob Dunning columns from the Enterprise, but his column from Friday is so outrageous, irresponsible, and most importantly just plain ignorant it would be irresponsible not to respond.

The title of the column is "It's Time We Let Go of Our Reservations."

He writes:
"SURPLUS SPENDING - as the economy - locally, nationally, globally (take your pick) - continues to fall off the cliff, it was encouraging to me to intercept an e-mail from Councilman Steve Souza to a local resident bragging about how fat and sassy we are in the City of All Things Right and Relevant - noted Souza: 'Almost all of the cities around us would love to have our financial woes instead of their own. We have a 15.2 percent or $5.35 million reserve.' - wow, 5 million here and 5 million there and pretty soon you have a billion -

But, as nice as a reserve is - and I don't care if we're talking about the city of Davis or the local school district - when you start talking about laying people off instead of dipping into the reserve, your priorities are backward - if we're saving our reserve for a rainy day, I'd like to point out that today is that rainy day - it has arrived - anything we can do to preserve the jobs of city and district employees should be priority one - laying anyone off for fiscal reasons when we have a healthy reserve is contrary to what this town should stand for..."
The first question that comes to mind is whether Mr. Dunning ever does research on his columns, would he like talk to the finance directors from either the school district or the city and ask them about their reserves? Would he talk to Souza himself to ask him about his email?

Here's the best explanation of the city's reserve:
"The City maintains a “reserve” much like an individual or household would keep a savings account accessible for an emergency. The City Council has adopted a policy to have a General Fund reserve equal to 15% of the City’s General Fund revenues. This is a contingency reserve for general operations to help mitigate the effects of unanticipated situations such as recession, man-made or natural disasters, variances in financial forecasting, or costs imposed by other governmental agencies. The City does not use the reserve to fund ongoing services..."
Basically the way you maintain a reserve is you pretend like the money does not exist unless such an emergency situation arises. One reason for that is that city's in general cannot take on debt like the federal government can. So if an actual emergency came up, and the city spend its reserve on say employee salaries, then the city would be in deep trouble.

The city developed this reserve policy back in 2006. According to policy, the reserve acts as a "risk management" tool, it provides a buffer against revenue fluctuations inherent in economic cycles, and most importantly the policy prohibits the use of reserve funds for ongoing operating expenditures.

The key to remember is that the reserve is one-time money. Once you use it, the money is gone.

Dunning's column mentions the school district as well. School districts are required by Ed Code to maintain a fund balance reserve every year. That money cannot be touched at all without severe consequences. The district generally maintains its own reserve above and beyond that much the same way as the City does as a risk management tool and a protection against fluctuations and emergency situations.

In the late 1980s, an increasing number of school districts were facing fiscal insolvency. Laws were enacted that created budget standards and increased fiscal oversight for all local education agencies. One of these standards was that local school districts set aside a certain percentage of their budget as a reserve for economic uncertainties. This reserve provides a cushion against unanticipated fiscal needs that may arise and thus reduces the risk of fiscal insolvency and the associated need to borrow and increase district debt.

Failing to meet the reserve requirement does not have a mandated consequence, however, as we know from other discussions, the County Office of Education oversees the finances of all local school districts. If DJUSD were to eat into its required reserve it would increase the likelihood the county superintendent of education intervening into local school district affairs.

DJUSD carried the state-required 3 percent financial reserve, which is just over $2.1 million. However, they cannot touch that reserve. The district also carries its own one percent contingency reserve which comes to about $650,000.

Interestingly enough, the district discussed this very issue on Thursday and the Davis Enterprise covered it in this morning's paper.

Given the fiscal situation in the state, districts are being given greater flexibility with some of these reserves.

But a key point with these reserves is that they are one-time monies. They will get depleted rather quickly given the nature of the economic crisis. As Bruce Colby put it, last year was a crisis, this year is a crisis, 2010-11 will be a crisis, 2011-12 could be a crisis.

Moreover, in general one has to balance the three-year budget using ongoing revenues, not one-time monies.

As Tim Taylor put it:
"From my perspective, you would spend it in a situation where you have an emergency need, something that would not commit you to ongoing year-after-year obligations."
Bottom line here is that using reserves is not going to solve our fiscal problems, and it could make them worse as time goes on. Bob Dunning needs a better understanding of the fiscal policies, rules, regulations, and economic crisis before he makes such irresponsible statements.

Getting back to his column, there is another key point that needs to be addressed.

Here he quotes Councilmember Stephen Souza:
"Almost all of the cities around us would love to have our financial woes instead of their own. We have a 15.2 percent or $5.35 million reserve."
Davis is in better condition that a lot of other cities but it has very little to do with the reserve. I would and have argued that our fiscal policies are just as bad as many other cities--if not worse. And we are going to have to deal with that. Having that reserve just means we can weather an immediate crisis better than other cities. We still have an ongoing structural deficit. We still have an ongoing problem of unmet needs. We still need to fix our unfunded mandates. We still have to fix the pension system. We still have to reign in employee salaries at the top end of the scale.

However, the bottom line is the city of Davis has been hit less hard than other cities with the foreclosure crisis. It has been hit less hard than other cities because its property values have not plummeted as others have. We rely less on sales tax revenues than other cities as well, so while the declining economy is producing a tax revenue fall off, it is not to the point where cities like Roseville who are facing eight figure budget deficits.

The bottom line is that while we have a deficit for the next few years of at least 3 million and as much as five million (and notice if we used the reserves to fix that, they'd be gone after next year), we can probably survive short term by adjusting our spending and tightening our belts.

That is not to suggest that we do not have bigger issues. It is just to suggest at this point the economic crisis is not devastating us like it is many other cities or even Yolo County.

So yes, Councilmember Souza has good reason to express optimism, but it is not because of our reserves. Our reserves would be depleted very quickly in this crisis, if that was their intent.

Dunning has a large amount of influence in this community and his column is undoubtedly the most widely read feature in the Davis Enterprise. With that influence requires a degree of responsibility to research and understand the issues on which he has opined. In this regard, he has failed in his duties by suggesting the city or the school district are being irresponsible by maintaining fund reserves. In both cases, maintaining reserves is either required by law, required by city policy, and necessary and prudent for these entities to whether the uncertainty of such a downturn. It would be the height of irresponsibility for them to use these reserves in an effort to avoid making tough decisions in the coming year.

---David M. Greenwald reporting

Saturday, February 21, 2009

It is Time To End the Two-Thirds Rule

In theory the requirement in California to obtain the consent of two-thirds of the legislature to vote for a budget sounds like an idea that would promote consensus building and bipartisanship. I wish I could say that was in the intent, but it was more mundane. The intent was to prevent tax increases from being enacted. For many years it has accomplished exactly that; however as time has gone on, it has exacted a higher and higher price. It has prevented the type of wholesale structural changes that we need for reform to take place.

It has led to gridlock, forcing budget after budget to be adopted late. It has led to unnecessary delay, wasted time, and worse yet, in a crisis outright paralysis.

An early February Public Policy Institute of California survey showed that for the first time, a majority of Californians supported altering the two-thirds vote requirement to require a 55% vote. That was before our latest drama with the budget.

For years Democrats have wanted to take it on. Now for the first time they are serious about doing so. The only question is how soon they do it and whether or not there is finally the political will for it to succeed.

At the core, were Republicans who seemingly were willing to plunge California into fiscal crisis rather than vote for a tax increase that their own leadership said they had no choice but to support because it was the only way to balance the budget. At which point, at least in the Senate, they got rid of their leadership and elected a more intractable leader.

It was a process that saw one Senator exact a high price in order to finally secure his, the 27th vote in the Senate, and secure the passage of the budget. The price is a constitutional amendment to have an open primary.

Without the two-thirds vote requirement it is clear that the open primary issue would have never come forward. Speaker Karen Bass at the post-budget vote press conference early Thursday morning expressed regret that it came forward in the manner that it did without the kind of public process she would have preferred.
“I will tell you that none of us felt very comfortable with putting a bill forward like the open primary because it was never heard by a committee, there was no public process, that's not the way we like to do business. But the fact of the matter is that just represents one of the many many many difficult choices that we made over these last few weeks.”
She continued:
“If we didn't have the two-thirds requirement to pass the budget tonight's open primary issue would not have even been a concern. We would have passed a budget a long time ago. But you very well know that we needed one more Republican vote in order to pass this budget. And the requirement for that vote was to pass this bill.”
Indeed both Speaker Bass as well as Senate President Pro Tem Darrell Steinberg seem ready to lead the effort to repeal the two-thirds vote requirement.

As Pro Tem Steinberg said:
“The answer in my view is to take this two-thirds supermajority requirement. We are one of three states in the country that allows a small minority of members to hold up the progress.... It doesn't really work for California; it worked this time barely because of the magnitude of the crisis... We need to take the question this two-thirds supermajority to the ballot. I feel even stronger now than I did when I started on December 1.”
Speaker Karen Bass was also ready for the two-thirds requirement to go.
“One of the things I want to be voting on, if not in 09, then 2010, and that's the removal of the 2/3rds vote requirement so that California can be like 47 other states in the union. So the next time when we have a deficit like this we won't go months and months for negotiations.”
The big problem is that two-thirds vote requirement does not produce consensus building, but rather political blackmail, horse trading, quid pro quo, and it often requires the passage of pork in order to secure votes.

To the hold outs get the spoils. Senator Lou Correa is getting an extra $140 million in property tax revenue for Orange County over the next two years and $50 million after that. You see, Orange County happens to have the second lowest per capita property tax revenue in the state. You know who has the lowest? YOLO COUNTY.

However Yolo County is not getting that help, despite a $22 million deficit for 2009-10 in a budget of $66 million. Why is Yolo County not getting that help? Because Senator Lois Wolk and Assemblywoman Mariko Yamada did not blackmail the Democratic leadership and holdout for pork or other promises.

Senator Correa was not alone. Senator Ashburn, one of three Republican votes got a $10,000 tax credit to people who buy new homes.

And of course it is well known about all the things that Senator Maldonado got in exchange for his vote. There is nothing new about this though.

There is concern that the deal cut with Senator Maldonado to enable the budget to be passed sets a bad precedent. That was downplayed to a large degree. Speaker Bass argued that these types of things always happen, although it is more likely to be a specific project or even policy.
“Every year the budget is debated and frankly at the end of every session there's last minute horse trading. Until we get rid of the two-thirds vote requirement we will be doing the same thing.”
Senator Steinberg:
“I don't like it and it was an unpleasant part of the process, but I'll tell you what the answer is. The answer in my view is to take this two-thirds supermajority requirement.”
That movement is already underfoot.

The Courage Campaign has already launched a campaign to end the two-thids vote.
"The rule requiring a 2/3rds vote of the legislature to pass a budget allowed a small cabal of extremist Republicans led by Senator Abel Maldonado to hold the state hostage to their demands, as they have done year after year. As Rachel Maddow explained on her show, this is part of a pattern of Republican obstruction across America."
They are not alone. Word is the Democrats in the legislature have already hired consultants to spearhead the initiative drive.

The League of California Cities recently put out a publication where the focus was on the two-thirds vote requirements. The side in favor of retaining the two-thirds requirement is represented by Assemblyman Roger Niello. At least give him credit, he was one of the three in the Assembly to vote for the bill.

John Laird, an Assemblymember and former League of California Cities board member writes for the opposing side.

One of the problems hanging over the process is the fact that Republicans who vote for these budgets put themselves in electoral jeopardy:
"After a 2001 budget in which four Assembly Republicans joined all Democrats in approving a budget, for various reasons not one of those Republican legislators returned after the next election. That experience hangs over every budget."
Indeed this time we saw a conservative blogger put Republicans heads on the pike, threats from Rush Limbaugh, and the very real possibility of recall for Assemblyman Anthony Adams.

The Redlands Daily Facts reports:
Sen. Robert Dutton on Friday asked state Assemblyman Anthony Adams to resign as chairman of the San Bernardino County Republican Party after Adams voted in favor of nearly $13 million in temporary tax hikes.


"Anthony Adams has called Senate Republicans `recalcitrant' because they won't support a budget proposal that raises taxes on hard-working California families by more than $13 billion," Dutton, R-Rancho Cucamonga, said in a prepared statement Friday. "It's clear that Assemblyman Adams doesn't represent the core values of the Republican Party and I am calling on him to immediately resign as chair of the San Bernardino Republican Party."
As the Sacramento Bee reported in the Capitol Alerts, he knows this is probably the end of his political career :
Republican Assemblyman Anthony Adams cast his "aye" budget vote at dawn today with full knowledge that, as he has said, "this will probably be the end of a political career for me."


"I think it's important that people know that my caucus is supportive -- that I'm not making any decision lightly," Adams said on his way into a GOP member's office Wednesday. "I'm also not making a decision outside the realm of our caucus. I'm not out there by myself or trying to engage in something that does not have the support of my caucus."
The Bee article continues:
A recall effort against him is already afoot.

The 38-year old lawmaker has been in anti-tax advocates' crosshairs ever since a Sacramento Bee story on Jan. 22 and an appearance later that day on the John and Ken radio show in Southern California. The shock jocks were blasting Republicans, including Adams, for telling The Bee that taxes were on the table in budget talks.

"I dare with the full knowledge that this will probably be the end of a political career for me," Adams told the radio duo. "But the fact of the matter is California is in a place where they need people who are willing to sacrifice their own personal agenda for what's right."
The radio hosts responded by posting an image of Adams' decapitated head on a stick on their Web site.
Truth be told, Anthony Adams is much closer to a hero in the budget battle than Abel Maldonado ever was. He never tried to hijack the process or hold the state for ransom. Instead, he did what he believed he needed to do to protect the state of California and exercise his constitutional duties as an elected official. For that he is probably looking at the end of his political career.

This weekend it is reported that at the Republican's state convention that the six Republican lawmakers will face the possibility of censure by their own political party.

Who would want to subject themselves to that? Who will do so in the future the next time a budget fight comes down and the legislators have to grapple with unpleasant choices? This is not done. There is a possibility that the May revise will be bring even worse news.

The movement is already afoot to repeal the two-thirds vote requirement. On February 18k, 2009, a ballot initiative was already circulating with the California Secretary of State's webpage to do exactly that.

In fact there are two of them.

The language of the first:
"STATE BUDGET. REPEAL OF TWO-THIRDS LEGISLATIVE VOTE REQUIREMENT. INITIATIVE CONSTITUTIONAL AMENDMENT. Lowers the legislative vote requirement necessary to pass the state budget, and spending bills related to the budget, from sixty-seven percent (two-thirds) to fifty five percent. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Unknown changes in the content of the annual state budget. Fiscal impact would depend on the composition and actions of future Legislatures. (08-0022.)"
The second one would retain the two-thirds vote requirement for raising property taxes but remove it for the budget.
STATE BUDGET. TAXES. REPEAL OF TWO-THIRDS LEGISLATIVE VOTE REQUIREMENT. INITIATIVE CONSTITUTIONAL AMENDMENT. Lowers the legislative vote requirement necessary to pass the state budget, spending bills related to the budget, and budget-related tax increases, from sixty-seven percent (two-thirds) to fifty-five percent. Retains sixty-seven percent (two-thirds) vote requirement for property tax increases. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Unknown state fiscal impacts from lowering the legislative vote requirement for spending and tax increases related to the budget. In some cases, the content of the annual state budget could change and/or state tax revenues could increase. Fiscal impact would depend on the composition and actions of future Legislatures. (08-0023.)
As this process shows us quite clearly, we need to change the system for so many ways. First, in an emergency we get a watered down budget that often does not fix the problems.

Second, it leads to delay. Had we passed this back in September of last year, the tax measures could have gone on the November ballot rather than this year's May ballot, and the state could have saved the multimillion dollar cost of a special election. Moreover, the delay cost the state billions of dollars, it costs people jobs, it delayed infrastructure projects that will cost money as well.

Third, it leads to political blackmail. It encouraged holdouts to extort prices for their votes. It gave them perks and rewards for holdout and but the people in districts where the legislators did not hold out often need the help just as badly. The process is inherently unfair.

Fourth, it leads to death threats to politicians, usually Republicans, whose career are now threatened for doing the responsible thing.

And just for good measure, Assemblyman Laird mentions another drawback to the two-thirds process.
"As I write this, the budget is almost two months late. The Democratic legislative committees and the governor have long since proposed balanced budgets with some new taxes, none of which include borrowing.

If by the time you read this, there is borrowing in the budget, it is not what the governor or a majority of the Legislature wanted. It will be the two-thirds requirement that will have leveraged it in so the budget process can conclude. To add insult to injury, often the very interests that leverage borrowing into the budget won’t actually vote for the budget — leaving it to the rest of us to approve a budget that includes things we find distasteful.

It’s said the two-thirds requirement protects fiscal responsibility. I think the opposite is true. We got where we are now with the two-thirds requirement. This is no way to run the government of the eighth largest economy in the world. This needs to be changed. There’s a reason 47 other states do not do this — and that their budgets are adopted on time."
Laird is exactly correct. We do not have fiscal responsibility. We did not pass a responsible budget in September of 2008 and we did not pass one now. We have more borrowing, added pork, we have not fixed the state's structural problems, we have special measures on the ballot, etc. Nothing even resembling fiscal responsibility occurred due to this process.

There is always talk of ending the two-thirds requirement, this time, it appears that there just might be the political will to do it.

---David M. Greenwald reporting

Friday, February 20, 2009

DJUSD Looks at State Budget Impact

DTA Stakes Out Position Against Salary Cuts

For the first time, DJUSD last night began working with real budget numbers rather than rough approximations. The bottom line is that California education took a pretty hard hit and unfortunately, they did not get the kind of full categorical flexibility that they were hoping for. In the coming days and weeks, we will examine some of these numbers more thoroughly.

Right now, we will just offer a brief summary of the district's budget picture and focus on some interesting responses from DTA and the community regarding the issue of the Davis High School Football Field and Track Renovation as well DTA's believed preference to take the 20 RFK's rather than a salary reduction.

But first a brief look at the budget climate at least right now. The state decided not to cut the number of school days. So the 180 day school remains in effect. The school district could have saved $250,000 for each day that was cut from the schedule, but that did not make it to the final budget.

Nor for all effective purposes was flexibility in the text books categorical funding. That would have been a way to save over $800,000 by forgoing updated English and Math text books. But again, that is not to be.

Finally, the speculation is that the state is going to soak up all of the federal stimulus money in order to balance their own budget. There was at one point speculation that DJUSD could get one to two million from that pot, but that is believed to be off the table as well.

There is some categorical flexibility, but that flexibility is off-set by nearly one million in categorical fund reductions. Moreover, there are decreased penalties for going over the 20:1 ratio for class size, but it is not a full flexibility either.

In short, the district is going to have to find a way to reduce its deficit and the most likely to occur either through salary cuts to employees or through pink slips.


What is becoming interesting at this point is where the teachers and DTA stand in terms of what the district ought to be doing. Several came up and spoke during public comment expressing displeasure at the district's decision to fund the construction of the new DHS football stadium.

This has become a source of great criticism within the community. Indeed in the Davis Enterprise yesterday appeared two letters criticizing the building of the new stadium.

The most pointed read:
"'Teachers asked to take 2.5% pay cut' along with a higher headline citing the school board's decision to proceed with a $4 million plan to upgrade the football stadium. What a travesty!

Obviously, a stadium is more important than classrooms and teachers and student learning."
Coupled with the criticism during public comment, Superintendent James Hammond responded in perhaps his most heated manner yet attempting to explain once again the funding issue.

What the district needs to understand on this point is that they are not only losing this public relations battle, they are getting killed by it. In terms of the facts, the district is right, the funding sources are different, funds that are available for construction cannot be used for instruction.

Guess what? The public is not going to understand that. They see multimillion dollar upgrades to a football stadium and at the same time the district is contemplating about cutting teacher positions or asking them to take salary cuts, and the public is going to be suspicious of the school district.

The district now puts itself into a bad position. They either have to try to explain this to the public, which will be difficult and perhaps not fruitful. Or they can allow these beliefs to fester. There is no election at this point in time, but people do not forget these kinds of things.

From the teachers standpoint, DTA President Ingrim Salim laid it on the line last night.
"I want to address the stadium question because it is out there. I think what you should all be aware of is that certainly there is different pots of money and many of us can grasp that, but not all of us does. That’s just confusing. It’s going to be really hard to mitigate the effects of the confusion.

The second piece from the DTA standpoint is that while probably from the community standpoint they supported the stadium, certainly within the teaching community, they really wanted to see Emerson renovated. There’s not a way to fix that perception either."
The teacher issue thus is somewhat different. They understand the funding differences, at least in theory, but they believe that the priority should have been Emerson rather than the high school.

The district has a difficult position here because they are correct on two essential points. As mentioned before the funding. And the second problem is that the current situation is untenable. You have a serious safety risk, and that is a liability to the district.

However, the timing of this could not have been worse.


Ingrid Salim's follow up comments were just as interesting. As she laid out for the district the likely but not official DTA position on salary cuts. Basically they would rather take the 20 position cuts rather than a reduction of salary.

Here is her lengthy statement from last night:
"Last year we did have reserves and yet we RFK’d 114 people. So people are just suspicious even though I can look at the budget numbers and see what happened as a result of last year and now we’re not being quite so conservative. But last year there was money in reserves that weren’t applied immediate to personnel. So we RFK’d people, we didn’t end up laying off, and we backfilled. We filled back in with DSF money… But we didn’t use those reserves right away. So that might give some understand about why people keep questioning about are there reserves and are suspicious that there might be. I personally don’t question that, I think we’re using them differently than we did before. That’s just the background of where that suspicion comes from.

The last piece of that is that it’s just real hard to correct misinformation that gets out. Whenever people are defensive and afraid for jobs and for money or whatever they certainly spin things. We can do our best job to try to correct misinformation but it’s just a battle. So just to know that. We can civilly disagree but the battle of misinformation will still be there. And perceptions are very hard to fight.

The other dicey piece is that you asked both unions to consider salary cuts and where w are is a combination of all of these perceptions. The reality is that we would have to have all of our membership voting or over half of them… Our union will be doing a survey to see where people are in terms of what they want to do.

But the undercurrent that we’re getting if we’re really talking about 20 jobs, and last year it was 114 and we weren’t talking about a salary cut, that probably the majority of the people say that’s okay. It’s okay to cut 20 jobs. Basically that’s programs that probably need to be tightened anyway if we’re going to have sustainable education with a smaller budget. The bulk of people that we’re hearing and getting information from, and like I said we don’t have a formal hearing to say that for sure, but that’s sort of the sense we’re getting…

We’re certainly going to ask, we’re certainly going to push forward with this concept, and there are people who say no, let’s take a cut for everyone. But that’s kind of what’s out there right now.

The final part is that there are places where we’d say it would be okay to increase class size, for instance at the 9/ 10. I’m not speaking for DTA, I’m just saying things that we might say. The 9/10 English and Math to [a class size of] 24 instead of 22. That’s not a huge impact on class size reduction. That would be preferable to something like considering a salary cut.

We do worry about the logistics of putting into place something like a salary cut or anything like that, because of the exit strategy—when do you change it? What happens to retirees? And all those little tiny things that just seem huge and overwhelming.

We will start that process next Tuesday [petitioning our members]. We’re pretty comfortable about where things are right now in terms of going forward. We’re going to be going over the budget pretty closely ourselves, finetooth combing, trying to find other ways to meet this deficit."
From my standpoint, the position laid out by Ms. Salim makes a good deal of sense from the teacher's standpoint. Salary cuts are problematic for a number of reasons including the difficulty of making ends meet during tough economic times.

Furthermore two other essential points were raise. First, the sheer number, if it is indeed 20, one would think the likelihood of anyone losing their job was pretty small. For one thing you have attrition through retirements and through people moving.

Second, she makes the point, a point that was made on this blog at times, that if we want to have a sustainable education on a smaller budget, and a smaller budget is the reality right now, then tightening up the programs is probably a way to do it.

The part that somewhat surprised me is that the teachers support a slight increase of class size at the 9/ 10 level, a level given full flexibility by the state, from 22 to 24. She argued that was not a huge impact on class size reduction but was preferable to taking a salary cut.

The bottom line here is that a salary cut would have to be negotiated with the DTA through the collective bargaining process. This was a strong and public signal that DTA is not there right now.

The school district has an ongoing perception problem in dealing with the DHS stadium repair. They had better get on top of that issue or it could backfire on them in the future.

---David M. Greenwald reporting

Word To The Wise: The Foreclosure Nightmare Part 2

Wake Up and Smell the Coffee!--PART 2

By E.A. Roberts

Part 1 was published Thursday February 19, 2009

Where Do We Go From Here?

1. Stop encouraging the policy of lending money to folks who do not have the wherewithal to repay.
• Disallow subprime loans, in which borrowers clearly do not have the resources to make payments.

• Use government subsidized “affordable housing” strategies to place low income consumers in homes, rather than pawning off the responsibility to the private sector, which is largely unregulated.

• Encourage people to live within their means.

• Disallow gimmicks by private enterprise that addict consumers to spending.

• Government should set a good example to consumers by balancing its own budget.

• Government cannot keep bailing out private enterprise, which is becoming all too common an occurrence.
2. There must be more government oversight and regulation from the beginning, rather than after the fact, of the following:
• Lending standards

o Proof of employment should be obligatory;
o Sufficient income required;
o Adequate down payment necessary
• Bank/lending institution practices

o Exorbitant executive compensations/perks should be disallowed;
o Compensation should be tied to economic health of company;
o Expensive retreats for non-business purposes should be disallowed.
• Sale of securities

o What type of things can be sold as securities and how can they be sold?
- Ban subprime loans for sale as securities;
- Ban bundling of different types of securities.
o Insist on and enforce an objective credit rating of securities.
3. Make originator of loan accountable for any default - institute tracing system if mortgage is sold as security.

4. Crack down on predatory lending practices.
• Ban Adjustable Rate Mortgages altogether;

• Make sure customer is fully informed as to each and every term of a loan;

• Have strict guidelines for loan refinancing;

• Limit what lending institutions can charge in fees and interest;

• Punish lending institutions that do no conform their behavior to the law
5. End the political and ideological rigidity and polarization that has taken hold in this country. We need to get back to pragmatic policies instituted for the good of the country. Blaming one party or the other is fruitless. There is plenty of blame to go around on both sides of the aisle, in private enterprise, and in regard to consumers.
• Push to obtain minority votes is polarizing this nation;

• Protecting business at all costs is destroying this country;

• Campaign contribution methods are corrupting our political process.
6. Encourage lending institutions to do the right thing, by not giving them any bailout money unless they agree to all of the following:

• Recapitalization of the banking system;

• Restructure mortgages by -
o Eliminating Adjustable Rate Mortgages;
o To avoid foreclosures, restructure existing mortgages -
- From ARMs to fixed rate mortgages;
- Extending time due;
- Decreasing interest rates.

• Limit executive compensation/perks.

• No lavish parties at the company’s expense.

It is predicted that this nation should be done with subprime loan foreclosures in the first quarter of 2009. I am not sure I agree with that statement. There is no doubt the housing market will be flooded with bank owned homes - from one quarter to one third of all homes for sale will be bank owned. This occurrence could push down housing prices even more, perpetuating a vicious cycle, but it could also attract bargain hunters (and speculators).

Borrowers can escape negative equity by dropping their house keys in the bank mailbox and walking away - except they still may be held responsible for any loss the bank takes on the eventual sale of the house at auction. But abandoned homes are a plague on the neighborhood. They often fall into disrepair, and offer an attraction to looters and squatters, dragging down property values of the entire street. Housing market deflation can produce overshooting on the economy’s downside.

Lenders could forgive part of the mortgage or renegotiate the terms of the loan a) from an adjustable rate mortgage to a fixed rate one, b) keep the teaser rate for an extended period, c) increase the length of the loan and/or decrease the interest rate. But because subprime loans have been bundled in a pool with other mortgages sold to a diversified group of investors, the packaging process puts the borrower and lender a labyrinth of a distance away from each other. So the ability to renegotiate has become nearly impossible. Subprime loans packaged into securities skyrocketed from 32% in 1994 to 81% in 2006.

The solution to the “distance” dilemma might be to give the legal right to change the terms of mortgage loans, or forgive part of them, to servicers who collect payments on behalf of creditors. Another idea floating out there is for Fannie Mae and Freddie Mac, the government sponsored enterprises whose loose lending policies (prompted by Congress) helped get us into this mess, could buy/guarantee any existing home mortgage at a fixed discount from current principal, e.g. 15%, with the understanding the new mortgage would be supported by federal credit guarantees, with interest rates reduced to perhaps 5% with the payment schedule lengthened. Once these mortgages become liquid/tradable, it would improve the liquidity of the entire financial system, or so the hope goes.

Lesson to be learned: Don’t borrow more than you can afford. Save, save, save. Diversify your investments. Don’t trust everything you read or hear. Bring a good healthy bit of skepticism to the table. Know that not a single person is immune from financial ruin no matter how careful one is. Make sure to keep up with the news, and keep involved in the political system, especially the local scene. Locally is where you can exert the most control on what goes on with your tax dollars.

Part 1 was published Thursday February 19, 2009

Elaine Roberts Musser is an attorney who concentrates her efforts on elder law and aging issues, especially in regard to consumer affairs. If you have a comment or particular question or topic you would like to see addressed in this column, please make your observations at the end of this article in the comment section.