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

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

Read My Lips... No New Taxes?

City Needs To Solve Its Fiscal Problems First Before Going to the Taxpayers for a Renewal of Existing Taxes

At the risk of sounding somewhat well... Republican, there is something to this at least from the standpoint of local government. It is really not that I am opposed to new taxes, it is that there needs to be some incentive for the city to negotiate hard this with the various bargaining units. Let us back up a few steps first here.

The city is facing an interesting dilemma. There is a long term structural problem facing the city with the scope of city contracts and the nature of pensions. There is a shorter term problem with the city's budget that has less to do with the long term structural problem than it does a short-term revenue problem resulting primarily from the recession and the loss of tax revenue.

If done correctly, the city can use the short term problem to give them the leverage to fix the longer term problem. However, that remains one gigantic "if." The temptation is going to be for the bargaining units to attempt simply to hold off on the tough decisions until the economy improves. So many of them will likely push to simply extend the current contract. The city must fight hard against that urge.

At last week's city council meeting, it became 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.

In order to get the sales tax on the ballot for a vote in June of 2010, they would need to have it ready by January 2010. To me that gives the city nearly one year to get their house in order. Because if they do not get their house in order, for the first time in my life I will not only oppose a new tax (which I did previously with the Parks tax), but I will actively work against the tax. I will get a group of citizens together, we will walk precincts, we will raise money, and we will run a campaign opposing a new sales tax.

In other words, the city will have to run a tax against organized and financed opposition.

Honestly, I do not want to do this for a variety of reasons. First and foremost, despite rumors to the contrary, I simply have better things to do with my time. Moreover, I actually believe there are vital services that the city offers and will not be able to do if they do not have that tax revenue. Frankly the services I would least like to see cut will be the ones that go if the tax revenue disappears.

On the other hand, we need changes and we need to give the city leverage to make those changes. Right now the residents of the city of Davis, many of them do not realize the peril that their city is in. Although as I talk to more and more people at Farmer's Market, it becomes clear that many are aware of these problems.

The city needs to negotiate hard on behalf on the citizens to fix these structural problems that loom.

First, it needs to be made clear, city employees are not the targets of this. The real concern is the rise of top-end salaries. If you look at the list of 100K jobs for the city of Davis, most of them are public safety employees and most of those are in exactly one department--fire.

The city needs to hold the line on the top end salaries. City Manager Bill Emlen showed good faith by not taking a raise, we need a wage freeze across the board for top end employees.

Second, we need to change the way we finance our pensions. We get another opportunity here with the problems that PERS is facing and the fact that city's are going to need to cover a higher percentage of the yearly contributions because the fund is running a deficit due to drops in the Stock Market and some bad investments.

The city needs employees, especially those on the top end, particularly those getting 2.5% at 55 and 3% at 50 to contribute to their retirement pensions. If we do that, we do not need a two-tier system that most public employees and their unions deem unfair. And if we do that, the city will face much less risk in the future from the rising costs of these pensions.

Third, and this falls mainly on the fire department, we need to change the way we deliver these services. We are one of the few municipalities that uses four-men teams to fight fires. And we don't often fight fires. The vast majority of the calls are for medical emergencies. Why are we sending in four-men fire fighting teams for medical emergencies? If you ask the fire department, in part, it's because if they get another call, they need all of their equipment and manpower. But the result of this practice is inefficiencies and a waste of money.

I'm not going to try to come up with the answer. That is for the fire department and city staff to do. However, that is a lot of money for not as much service as we are led to believe.

In addition, there has long been a push for a fourth fire station. That is something that we can look into when we fix the staffing situation. I think an innovative approach here can save the city money and also enable the fire department to get the tools they think they need to be effective.

But in order to be effective these other things have to be solved first. We have a window of opportunity. Everyone is going to have to give this year. We have a chance to fix some of these problems because of the unfortunate situation with the economy.

If the city knows that the public will not support a tax measure without fixing our fiscal health, the city will have the leverage it needs to get a more favorable agreement from the various bargaining groups.

Once again, I want to reiterate this. People have used this opportunity to attack all city employees. The majority of city employees are making $60K or less--which is not a whole lot given the cost of living in this city. The problems are really on the top end. In better times, I would be absolutely supportive of the average city employee getting a pay raise. Unfortunately these are not good times. However, these employees are not part of the larger structural problem. They do not deserve to be attacked or disparaged in this process.

The bottom line again is that the city has the opportunity to hold the line and fix some of its longer term fiscal problems as it tries to deal with its shorter term budget deficit. Hopefully they will use this time wisely.

---David M. Greenwald reporting

City Needs to Press For Restructuring City Employee Contracts During Economic Crisis

Last night the Davis Enterprise had an interesting article on the status of city countrols for the department heads. The city has put on hold the new contract for department heads.

'We just decided to put it on hold while we deal with the budget issues,' said Human Resources Administrator Melissa Chaney. 'There's nothing pending right now.'

That means the seven people heading up the city's departments are operating under the old contract signed in 2005. Under that contract, the city budgets about $1,478,000 for salaries, health benefits, unemployment, workman's compensation and other items for the city's top employees.

'Right now, we're just trying to figure out where we are with the budget and what ramifications are with the current budget and the current fiscal situation,' Chaney said.

More interesting is that several of the bargaining units in Davis have to renegotiate their contracts this year. The city is facing a $1.5 million shortfall this year and up to $3 or $4 million for next year.

The retirement benefit issue has been a heavy topic of conversation on the Vanguard in recent months. The Enterprise article mentions Antioch has gone to a two-tier system which has dropped the formula from 2.7% at 55 for current employees to 2.5% at 55.

The other possibility is that the employees themselves are asked to contribute more to their retirement than they presently do. That is probably going to have to occur as the CalPers system which had been superfunded during the early part of this decade is now running in a deep hole with the struggles of the markets and other problems.

The two-tier system is generally strongly opposed to by public employee unions, so increased contributions for all might be the way to go.

One pressure that the current city management staff and the council are going to have to fight is going to be the pressure placed on them by the bargaining groups to simply extend the current contracts for a few years until fiscal times are better. That would enable employee groups to wait out the current economic downturn and essentially punt on the tough issues.

Instead the city needs to take advantage of this crisis to fix the structural problems with the compensation system--particularly retirement pensions.

The city is going to need to be tough in negotiations this time because there are not only current bargaining issues of a looming budget deficit for the city, but there are structural problems that will end up further stressing the city's fiscal condition.

As the Vanguard reported last summer, employee salaries rose 50% from 2000 to 2008. Total compensation to employees went from $27 million to $49 million over that period. However, retirement pensions fueled by the increase of the pensions to 3% at 50 for public safety have risen nearly six fold over that time. It is that factor that will further strain the city, especially as it has employees retire at 50 and 55 meaning the city may end up paying pensions for decades after retirement.

Is the city prepared to drag out these negotiations until they solve the problems in the contracts?

Looming ominously is a quote from HR Administrator Melissa Chaney:

"We haven't sat down with any of the bargaining groups. We would probably be looking at sitting down with them at this time of year, we just haven't done it yet."

One of the big questions is the extent to which the bargaining process can have transparency. Bargaining itself occurs behind closed doors. However, the city is looking into ways to make the process more transparent.

Under past conditions, the bargaining took place behind closed doors, a contract agreement was reached and the item was placed on the consent calendar for approval by the city council. That means that unless someone pulled the item off the consent calendar there would be no public discussion of the contract and the only time the council saw it would be at the end of the process.

Some possible changes include a status report to the council on the bargaining process given through out negotiations. Having a public presentation at some point along the way about the contract. Requiring the council to approve contracts like they do city ordinances--a full public hearing on the first reading and then a second reading.

One of the important ideas here is to sufficiently put public scrutiny into the process that both sides realize and recognize they have to defend the contract that they have arrived at. What has happened in the past is that the agreement is made behind closed doors and then the city staff become de facto advocates for the contract. That has produced some extraordinarily generous contracts over the last eight years and has allowed city employees to reap huge benefits at the expense of taxpayers and other projects.

The city in addition to the budget deficit in the general fund also is running about $13 million short on a variety of projects--often repairs and infrastructure upgrades--they have referred to these as unmet needs. Part of the reason for the unmet needs is an increasing portion of the general fund goes to city employees.

The city is facing very serious issues and it will be vital that the public be engaged in this process as they are really the only oversight the city has on contracts to public employees. The Vanguard will continue to press for ways to make this process more open and transparent in hopes that the interests of the taxpayers and citizens of Davis are represented in the process.

---David M. Greenwald reporting

Analysis: Further Examining Davis' Financial Situation

One of the issues came up last week with regards to the Budget discussion, was that of sales tax revenue. As a result, I wanted to look at total revenue for Davis per capita in comparison to other cities in region.

Assistant City Manager Paul Navazio provided me with that data, the only downside to it is that it is 2006 data from the State Controller's report. The upside is that it has a pretty good list of comparison cities, so it provides a pretty good picture and frankly I am not certain that much has changed in terms of rank order.



As one can see from the first slide here, the city of Davis is near the bottom in general fund revenue of the comparison cities. What is interesting is that cities like Vacaville, Chico, and Fairfield that have tremendously expanded their sales tax base in recent years by building a number of strip malls with big box stores, are almost identical in terms of general fund revenue (granted we are not looking at sales tax alone). Councilmember Greenwald's point is not far off that Vacaville does not have a tremendous difference.

Some have suggested that if we simply had a larger tax base, we would be in better financial shape right now. The problem is that larger tax base would mean more expenditures by the city. And once the economy reduces the revenue, the cities have found themselves in a deficit. And yes, I understand that cities should exercise greater degrees of fiscal responsibility, but the fact is they do not. Cities with greater revenue in fact are facing larger problems with the economic downturn.



The second point is really what I was trying to get at last week. Yes, Davis has lower sales tax revenues that other locales, but Davis is actually in a lot better shape that many other cities in terms of budget deficit.

Part of the reason for that is that more general fund revenue also means more general fund expenditures.

Now the expenditure data comes with a large caveat as Paul Navazio explained in his email to me. Basically no two cities are identical for purposes of this type of comparison. Some cities, for example, provide library services, paramedic transport, public health, etc. Very few cities operate there own water and sewer utility, whereas Roseville operates its own electric utility, some cities operate their own Housing Authority, etc. Navazio removed capital program expenditures, that will reduce the expenditures for some cities, for some reason Roseville is coming to mind, but it enables us to better gauge spending on comparable terms.

Based on these data, I make two more general points. First, with regards to city employee salaries--and the biggest concern there is going to be both retirement and rising health costs. Davis has seen as we have presented in the past a meteoric rise in employee salaries over just the eight years in this decade. Total compensation to city employees rose from just over $27 million in 2000-01 to just under $50 million in 2007-08, which is an increase of $21.7 million over an eight year period.

At the same time, tax revenues have not kept up. That is a big concern.

Part of that has been driven by the need to compete with neighboring communities for quality employees. That is indeed a concern and it is one that we need to take into consideration. In fact, as Paul Navazio showed in October, Davis is in fact in better condition than it's neighbors in terms of city salaries. The problem is that we have still seen a large rise.

Last week the Davis Enterprise surprisingly called for greater transparency in the salary contract process. They in fact, questioned the practice of using recent labor agreements from other nearby communities as benchmarks to help determine Davis' wages and benefits in an effort to remain competitive.

"Unfortunately, some of our neighbors have been overly generous and, like lemmings, we have followed them over the cliff's edge."

That's actually a pretty good description and so I respectfully have to disagree with the conclusions the city made back in October that simply because we are somewhat better off than our neighbors is not a rationale to continue the same policies that will lead more cities to bankruptcy such as Vallejo has faced.

A final point, I want to make here is that I actually agree that we should expand our sales tax revenue. I see that as a longer term solution to the city's budget. That is a prime reason I now oppose residential development on a 100 acre parcel of land that is currently zone for light industrial uses. It is the largest remaining parcel within the city limits so zoned and it would be a mistake to take that out of the market.

One of the things we are learning is that the Lewis Properties much like the owners of Westlake, never really marketed the property for business uses. The result is that while they claim there has been no interest, they have not actually tested that theory, and in fact, if that site were to be marketed there seems to evidence that there is some considerable interest just as there are grocers who apparently want to come to Westlake.

While there are considerable differences between Davis and San Luis Obispo, one of the things I have looked at is their model for economic development. In terms of residential development, San Luis Obispo has almost not grown since 1990. I think the population in 1990 was around 42,000 and now it's around 44,000. What they have done is develop their economic base. I would like to see some of that in Davis.

As I have stated in the past, I am generally opposed to the kind of big box retail companies like Target or Wal Mart. In part, I think they are inefficient producers of tax revenue, often taking more resources out of a location than they bring in. Moreover, from a long term perspective, their policies are not sustainable. We need to move in a different direction.

I think as Councilmembers Sue Greenwald and Stephen Souza expressed pretty eloquently at the previous council meeting during the discussion on Lewis-Cannery, there is a huge and growing green technology industry. Davis is primly situated to take advantage of that. As Councilmember Greenwald suggested, we have missed out on past booms such as the dot.com one. We should not miss out on the green technology boom.

I would also like to see us expand some into retail, but I would prefer smaller and more sustainable types of business other than big box.

If we are smart and innovative, we can make a lot of the kinds of changes that we want without sacrificing the character of our community. Obviously there are some on this blog who do not give a darn about that and in fact want to get rid of that. One wonders why they have chosen to live if here if they dispise it so much. However, I think these people are in the very small minority of the populace in Davis who have repeatedly voted to continue relatively slow growth and strongly environmental principles. Many of these people are the same who derided Measure W and we found out that those people were in the very small minority of Davis residents. For much of Davis, the challenge is how to expand our base without sacrificing what makes Davis, Davis. How do we grow without becoming like Fairfield and Vacaville.

---David M. Greenwald reporting

City Council Workshop Examines City Employee Salaries

Last night, the city of Davis held an Employee Compensation Workshop which walked the Davis City Council through the current city employee contract environment and make comparisons between the employee compensation plans for Davis in comparison with other communities.

A few general observations for and then I will get into some specific findings and criticisms of those findings and the presentation.

First, it was interesting but at several points, City Finance Director Paul Navazio clearly paid homage to the Vanguard and efforts by the Vanguard. At one point he made reference to what he described as the attention the arbitrary salary designation of $100,000 has drawn. Although interestingly enough, he cited the amount of employees who drew that compensation without factoring in overtime.

Later he alluded to the call for more transparency and correctly offered up efforts and workshops such as this as a means to provide the public with more transparency and accountability.

At the same time, and as we will see when we get into more detail, he infers that Davis' city compensation is considerably less than comparable cities (how comparable these other cities are can be subject to some dispute as we will see). And suggests at one point that one goal might be to bring up the salaries closer to market rate, although at the same time he suggested that was an illusive and moving target. Other data certainly called into question any suggestion that Davis needs to raise the rate of compensation in most categories.

Overall, I think it was a good and informative presentation that itself took nearly two hours and the entire session lasted well over three hours and well past midnight.

I am going to now go through some of the specific findings and make some comments about them. I will stress that I cannot do this presentation justice and that if you are interested in the topic, I recommend you watch a recording of the council meeting either on streaming video or a replay on Channel 16.



First, he broke down each designation by salary, health, retirement, and other compensation. So you come up with a total compensation package for a department head being around $200,000, $162,000 for a division manager, etc. There are a couple of interesting notes here.

First, there is no factoring in of overtime for either police and fire. We know that the average overtime for a firefighter for instance is something on the neighborhood of $30,000. The average overtime for a police officer is considerably less than that. So that will bump up the total compensation package for public safety officers.

A second problem was raised by Councilmember Sue Greenwald last night. That is that the typical fire fighter described here is step 1. However, as we learned when Councilmember Greenwald asked this of Paul Navazio, there are only 8 firefighters in step one but 22 firefighters in step 2, so why is step 1 considered "typical?" In other words, the designation understates the actual compensation that a typical Davis firefighter is receiving. That said, the difference between step 1 and step 2 is only about $4000 per year.





Then as we have discussed the retirement benefits plan. Conceivably with a 3% at 50, someone could receive between 75% and 90% of their highest base salary. I think the last chart really understates the amount that such employees can make.



And that does not include the additional retirement health benefits.



Here is a key finding. You will notice a very different recruitment environment for police officers versus firefighters. And that is something that is worth exploring. A key point here though is that Davis firefighters have always had at least 100 qualified applicants. There has not been a recruitment or retention problem in this regard.



The same is true for general employees, the city has generally identified between 12 and 30 qualified applicants and has rarely had trouble filling the positions.



Here is where there has been a problem. The specialized fields--information technology, engineers, and management positions. The city receives few qualfied candidates and the ability to draw those candidates is more impacted by the position's relation to the market compensation. In other words, many of these positions people could get jobs in the private sector and make more or they could make more in other jurisdictions.

However, for the most part, the city of Davis does not have trouble filling its positions for fire and for general employees. There seems to be more difficulty with police and with some of the specialized fields.



It is interesting that in most comparisons last night, Paul Navazio used the all-funds metric which put employee compensation at around 40% as opposed to just looking at the general fund, where employee compensation runs at 74%. I am not certain of the rationale for all-funds over general fund. For instance, in a school district you would look at general fund.



Here you have the comparison of employees salaries to the total salary over time. Again, it is a comparison between all-funds rather than the general fund. It shows a relatively steady ratio, but this graphic missed the explosion of growth in salaries in this decade where salaries more than double in the last eight years or so. A general criticism for a lot of these graphs is that by going back to 1990 rather than 2000, you miss some of the explosion of salaries.



Here again if you start at 2000-01, you see a huge growth in total personnel costs since that year.



This slide shows that if the city fully funded retirement benefits the amount of payment would go way up until about 2022, or the next 14 years, however after that point, the city would save a huge amount of money over the costs to pay-as-you go, which is what they do now.





Now we get into some of the comparative data, and this is where it starts to get problematic. I am not sure how comparable these cities really are. But the data shows that Davis have relatively low salaries and percentage of the all funds budget compared to these other cities, several of which are much larger than Davis.

Where Davis gets helped in these comparisons is first the relatively low cost for the city manager, which is somewhat misleading to use the city manager to office assistant as a metric. City Manager in most cases is the not the highest compensated employee. Councilmember Heystek joked that Bill Emlen would use this as a bargaining chip, but there is something to that. The relatively low compensation to the city manager definitely helps the ratio.

But here again we are stuck one several points. First, most cities have experienced large growth of public sector employee salaries. Davis is not alone and is not exemplorary in that position. The question is really whether Davis can afford to continue the growth in employee compensation that we saw in the last decade. And also whether Davis needs to--and it appears from the retention and recruitment rates that in most areas it does not. So these types of comparisons miss two key points.

One, Davis does not need to be at the top of the market to attract quality candidates to most positions.

Two, everyone is going to be struggling if the public sector salaries continue to increase. The fact that Davis is relatively modest in this regard does not mean we should increase our salaries, it means if we can hold the line on salaries, we will be in better position than these other cities.



This is a critical time, as you can see, almost every position except for the department heads is coming up for renewal in the next two years. Will we continue to give huge and generous salary increases or will we begin to hold the line.

That is the key. Now Mayor Pro Tem Don Saylor used his time to make this point--he reflected on the relatively low percentage of pay and the very high satisfaction rating given to the city by residents in an opinion survey from last year. He suggested this reflected an exemplary job on both ends.

I disagree with his interpretation of the survey data. In fact, I wonder if the survey data is all that meaningful. I suspect that most people do not have a lot of direct experience with city services. People know this: they live in a middle class to upper middle class community. That means most people are well off or relatively comfortable. There is not a lot of poverty, crime, there are not huge glaring problems with infrastructure, though there are certainly some problems that come up. So most people probably do not think or experience directly city services.

Now if we do not address some of the unmet needs of this city, those ratings will go down. We do put good money into parks and they reflect that.

Those who have more direct dealings with city employees have a more mixed view. I would certainly be more critical of certain aspects of the city and the management of the city based on my more extensive dealings. So it is tempting to read a lot into that, but I am not sure we should.

The fire department provides generally good service but fire calls are rare. The police provide generally good service, there has been a segment of the population that has some complaints about it, but that is a relatively small percentage, and so most people would rate it high, but again, we have a relatively low crime city.

In other words, given those characteristics I am not surprised to see high rates of satisfaction, I would guess in similar communities to Davis, you would see similar rates of satisfaction.

For me though, the focus on employee compensation has to do with resources and not job performance. The idea that we can keep up with the market or that we should does not strike me as a wise move. As it is, I think public employee salaries--particularly high end salaries have grown too rapidly in the last decade.

I would have like to have seen a segmented graphic showing the growth of the different types of employees' salaries over the last decade. I think that would be very telling.

Again, the key will be the city's ability to slow down growth of salaries because retirement cannot be reduced, salaries cannot be reduced either, all we can do is slow down the rate of growth and let inflation bring back salaries into a more manageable range.

---Doug Paul Davis reporting

City Saves Money By Plugging a Hole in "Extra Duty" Police Program

In August 5, 2008, the Vanguard examined the 100K Club of Davis and looked in particular at the amount of overtime each department received.



On August 14, 2008 the Vanguard acting on a tip examined an aspect of the overtime given to the police department. We learned of an "extra duty" program that is sometimes given to police officers in their time off. For instance it could be for various groups event who contract with the city, it could be for patrolling apartment complexes for four hours at a time when they have had problems with parties. Some officers like to pick up the extra work, some do not.

The groups who request the extra duty officer get sent an invoice and the officer gets paid time and a half. The city accounts for this under program number 5619--everything listed under 5619 is being paid by sources other than city money.

It turns out, roughly $70,000 of that $627,000 in overtime is not paid for by the city but rather by these private groups.

At the time, we were told that this money was paid for by these private groups to the city. The belief was that it was not costing the city anything to administer these programs.

That belief turns out to not be true. But to the credit of the city in this case, they have re-negotiated this portion of the MOU with the police department in order to plug this hole and make it revenue neutral. This past week, it appeared as a consent item on the agenda.

The staff report begins as follows:

"For years, the City of Davis has contracted with local businesses within the city to supply sworn Police personnel to provide private security. Previously employees electing to participate in the extra duty employment program were paid at time and a half their normal rate."

Here's the key point however:

"Unfortunately, the rate the City charges the local businesses did not cover the cost of the program."

It goes on:

"Currently the City charges businesses $66.50 per hour to provide sworn Police services. The cost to the City has been higher than the priced charged due to the combined cost of salary and benefits at time and one-half of the employees providing the services. In the past two fiscal years the Police Department had to absorb approximately $23,000 to cover deficit this program has caused."

So this program actually cost the city a net $23,000 over two years to cover something that should have been cost neutral.

Again to the credit of the city in this case, they have plugged this hole.

"Staff met with Police and Finance staff and members of DPOA to try to come to an agreement that would stay within the fee currently charged and to fairly compensate the sworn Police personnel performing the work. An agreement was reached to pay all sworn Police personnel at step 5 of the Police Officer Salary with Longevity and Advanced Certification pay. This rate of pay should keep the program cost neutral to the City, without having to raise the current rate charged to the public."

The Vanguard believes that there are problems dozens of programs like this that should be cost neutral to the city, but are not for various reasons. This is a simple way for the city to save money--find these problems and fix the holes to make them as a close to cost neutral as possible. No one loses in these types of exchanges. In this case, the city will save an additional $11,500 per year. That might not be a huge amount by itself, but if they find a number of them, it will begin to add up. The Vanguard applauds the city for spotting this problem and fixing it.

---Doug Paul Davis reporting

Lessons to Be Learned From Vallejo's Bankruptcy

Some have openly wondered why the sudden focus on the salaries of public employees in both Davis as well as in the county. In truth, it is a combination of factors that stem from the alarm of what happened in Vallejo to the burning question: can it happen here. Over the course of the summer, we have looked at this question from a variety of different angles. Perhaps most concerning was the seeming lack of concern from two of the victors in last spring's Davis City Council election about the looming and impending problem of Davis' fiscal stability.

These candidates argue that Davis has a balanced budget and it has a 15% reserve. At the same time, we see signs that all is not quite as well. The reports about the city's unmet needs is alarming. Basic repairs are being left undone which means that when they finally are tackled, their costs will likely have gone up. A simple view of the budget picture is that employees salaries have gone up far faster than tax revenues. The amount city has spent on pensions have increased five-fold over the course of just this decade. The city council at every budget workshop has looked toward the creation of new taxes. And finally, the most extreme cost to residents may be a water rate hike that was so explosive the Mayor would not even let a councilmember complete her questioning of a consultant.

With all that as context, we now look at Vallejo briefly as a guideline. Vallejo is not where we are right now, a clear view of that will emerge in a minute. The question is whether Vallejo is where we are going to end up. As we look at this analysis, I think the picture will become very clear as to why we have spent so much time looking at the issue of Davis' fiscal situation this summer.

The 100K of Vallejo

The Woodland Journal has provided us with these figures from a public records request they made from the city of Vallejo.

As you look at these salaries, remember that Vallejo is not even twice the size of Davis. It has a population of 116,000. The median income of Vallejo is $47,000 whereas Davis' is $65,000. The median housing price is also considerably less than Davis at $344,000. That is the context behind these numbers that show rather than 61 city employees in Davis making over $100,000 per year, a stunning, 292 city employees in Vallejo making over $100,000 per year.

• 100K Club of Vallejo--Click here to see the full list

Of this list, public safety and in Vallejo's case both police and fire, absolutely dominate the list. Of the 292 city employees making over $100,000 per year, 246 are in public safety--148 police and 98 fire.

As the pie chart shows, over half of the employees are in police and another 35% are in fire.

In addition to overtime, there were also payouts for holiday pay that are not shown on the chart above. It is not clear what holiday pay entails but in some cases it is a huge amount of money. The top wage earner received $232,000 for holiday pay, the second highest wage earner received nearly $200,000 for it.

Lessons to be learned

Some will take from this demonstration some solace that Davis is not in the condition that Vallejo was before filing for bankruptcy. That is 100% correct. However, the concern is that Davis like many cities in California is heading in that direction. The tale of Vallejo is a cautionary one for the rest of California cities to avoid their pitfalls.

Peter Scheer is the executive director of the California First Amendment Coalition. He was a guest on Vanguard Radio back in June.

In May, he wrote a column on how Vallejo's bankruptcy might have been avoided that appeared in the Huffington Post.

Mr. Scheer writes:

"To the familiar litany of causes--falling sales tax revenue, the home mortgage crisis leading to collapsing home prices and lower real estate taxes--there needs to be added one more: Too much government secrecy."

He continues:

Vallejo is broke, and other cities and counties may be close behind, because their personnel costs--salary and benefits for current employees and retirees--are higher than they can afford. While decisions at the state level are partly to blame, ultimate responsibility for the mismatch of revenue and expenses rests with local elected officials who, meeting in secret, have managed to avoid public discussion of the true cost and fiscal impact of the pay deals that they have approved.

If no one is watching, it's easy for public officials to give generous pay and benefit increases without having a clue how to pay for them. That's not so easy to do in a public session, where voters demand to know how much taxes will have to be raised, and how much other expenses cut, in order to make good on the promised increases in compensation. Such resistance is called political accountability, and it obviously depends on public access to the meetings in which elected representatives make their decisions.

Although in theory legislative bodies in California must operate in the "sunshine," the Brown Act, the state's open-meetings law, carves out a huge exception for negotiations with public employee unions. The combined effect of this exception, and separate provisions of the labor code, is to close the door, pull down the shades and turn off the lights on virtually all decisions relating to employee compensation and other terms of union contracts ("collective bargaining agreements").

Negotiating positions are determined in secret, negotiations themselves are conducted in secret, and negotiated contracts are ratified in secret. By the time the public gets to see the compensation provisions of a new union contract, it is already a done deal--indeed, any effort to change the terms likely would be a breach of the contract.

This cozy arrangement is very much in the unions' interest, since transparency would risk public opposition, and very much in politicians' interest, since they get to be generous with public funds without having to be responsible for them. Only one party is screwed: the public.

Finally a cautionary tale for public employee unions across California:

"For unions, bankruptcy court is a potentially costly defeat. The judge has the power not only to protect the city from its creditors, but also to void the union contract and, in that way, force city employees to accept a pay package in keeping with the city's capacity to pay.

The union has none of the leverage with the judge that it had with Vallejo's elected officials. It can't lobby the judge or give him campaign contributions, obviously. Having overplayed its hand, the union now finds itself in the uncomfortable position of having to justify, in a public forum, its claims to the city's limited, and declining, resources."

I agree with Peter Scheer 100%. There is familiarity in the Vallejo situation to our current situation. We are not where Vallejo is. Hopefully we can learn from these lessons. However, there is zero doubt in my mind that we are heading there. All of the trends are pointing to this.

Finally though this is a story about transparency. People have criticized the Vanguard for perhaps focusing too much attention on the firefighters of Davis. Honestly, I have nothing against the firefighters. On a personal level, I like their union chief. I enjoyed myself last summer when I did a ride-along with the department. I learned a lot and they were extremely accommodating to me. This is not personal. This is about public policy and from that standpoint, the city must step in because if Davis goes bankrupt, the firefighters stand to lose as much as anyone else.

People have also criticized the Vanguard for reporting on government practices when there was no clear problem. What I think they fail to recognize is that we need to know what is going on with our government regardless of whether they are behaving appropriately or misusing public funds. Both are important to report on, to know about, and to follow.

Peter Scheer hits the nail on the head in his column. We need transparency in government and for the public to be aware of what the contract are and what the consequences of these contract will be not only this year but down the line. And we have the same problem here that existed in Vallejo. A particular public employee union has tremendous leverage over the current council because of the work they did on behalf of two councilmembers this last cycle to see that they were reelected. The amount of money put in by that union was far more than any other single interest.

As Mr. Scheer points out, when the bankruptcy court comes in, the union will not have the kind of leverage over the judge that they had over the city and the judge has the power to void contracts. I would hate to see Davis come down to that and we can avoid with fiscal responsibility in the next four years. This is crucial time, because the contracts are coming due and negotiations will begin soon. The public needs to watch this situation very closely to ensure that their interests and not just the interests of the public employees unions are represented in the process.

---Doug Paul Davis reporting

Did Fire Mascot "Sparky" Receive Overtime Pay from City Taxpayers?

The City Apparently Does Not Know the Answer

A few weeks ago in response to the initial wave of reports on city finances, the Vanguard received a tip that as part of the Davis Fire Department Public Education Program, the fire fighter who dressed as "Sparky" received overtime pay.

A phone conversation at that time with Davis City Manager Bill Emlen confirmed that this was indeed a distinct possibility. Thus the Vanguard fired off a public records request to find out in exact terms, what the fire mascot received in terms of overtime pay. Even by the standards of this city, the Vanguard is shocked and stunned by what it found.

The Public Education program, according to the city:

"is contained within the Fire Prevention Division of the Davis Fire Department budget. The Fire Prevention Division includes fire safety inspections, fire investigations, plan review, public education, weed abatement, youth fire diversion, water supply and permits. The scope of the Public Education program emphasizes citizen education regarding fire safety, to reduce the chance of fires in places of assembly, residences and in the business community."

Some of the activities include:

• Annual Fire Department open house in October
• Fire safety presentations
• Disaster preparedness presentations
• Pre-school presentations
• Third grade class presentations
• Career days at local junior and senior high schools
• Fire extinguisher operation presentations and drills
• Station tours
• Fraternity and Sorority fire safety talks
• Neighborhood Night Out
• Special events (approximately 20 annually)

However, when asked for budget items related to the funding of the Public Education Program, the Vanguard was stunned to find out that the city does not separately account for the program. Rather it contains the Public Education Program within the budget for the Fire Prevention Division, a grouping that also contains fire investigations, weed abatement, and the youth fire diversion.


Last year, the city spent $371,238 on such programs, a not so modest budget including $229,505 in salaries and another $19,491 in overtime.

When asked for the city to itemize "expenditures to the firefighter for work performed as the mascot 'Sparky,'" again the city had no answer.

"The Fire Department does not have any records responsive to your request because expenditures to a Firefighter for work performed as the Mascot “Sparky” are not recorded as working as “Sparky,” but as a public education event."

However, the city was able to tell the Vanguard:

"The mascot “Sparky” is typically used approximately 3-5 times a year. The events are: Farmers market twice a year (February and October) four hours each; Open House in October four hours; and possibly one or two additional City events for two to four hours."

This led to the conclusion that "Sparky" probably involved in about 20 hours of work.

The Vanguard asked if these payments constitute overtime pay. The response was illusive at best.

"Again, the Fire Department does not have any records responsive to your request because such time is recorded as public education time. That said, the Fire Department tries to limit overtime pay when feasible for public education events. Firefighters on overtime are only used when no one else is available."

When asked over the phone, Bill Emlen seemed fairly sure that the firefighter who dressed up as "Sparky" was given overtime pay. And even if "Sparky" was not directly given overtime pay, it seems likely that a firefighter who worked these extra shifts would eventually be given overtime pay because of the additional hours.

The Vanguard can approximate the amount of money the city might be paying the firefighter to dress up as "Sparky" in public events.

We know the average firefighter received $88,555.01 in base salary. Averaging that over a 40 hour work week gives us an approximate total of $42.57 per hour. That means that overtime pay at a time and a half would be roughly $63.86 per hour for a total over 20 hours of $1277.24 of cost to the Davis taxpayers. That is not over $1200 of money going to help fight fires, it is money going to a man dressed up in a dog suit.

You might ask why a fire department volunteer could not perform that task for no cost? Are you telling me that they could not get an individual to volunteer for a few hours at a time to dress up as "Sparky"? It seems inconceivable to me that there is a possibility that the city paid a firefighter overtime wages to dress up as "Sparky"--whether those are direct overtime wages or those hours would eventually push their regular duty into overtime is appalling to me.

But frankly I am not sure what is more appalling--the use of taxpayer money or the fact that the city cannot directly account for that use of taxpayer money?

This public records request was not a very complicated request. The city was not able to itemize those expenditures. They have no idea how much the fire department is spending on public education as opposed to some of the other fire prevention programs. They have no idea how much overtime they are paying for these support programs. That is appalling and it is completely irresponsible.

The people who run this city have very little idea how the taxpayers money is being spent and amazingly they have admitted as much in their response to the Vanguard's public records request.

The only reasonable explanation I can think of is that the city does not want to know specifically how this money is being spent because then they have plausible deniability. They cannot be held accountable for what they do not know--and they know money is being misspent.

Any responsible agency should be embarrassed that they cannot breakdown exactly how taxpayer money is being spent by departments under their control. This definitely makes one wonder how many other times this is the case as well, in how many other city departments.

I implore the city council to hold the city manager's office and the city finance department responsible for the amount of money that the city spends on various programs so that the city council and the public can no exactly where the city's tax money goes and whether or not it is being spent wisely.

---Doug Paul Davis reporting

Closing the Circle: Examining City Employee Contributions in 2008 City Council Elections

In my field of study, Political Science, researchers often work with intricate and complex mathematical models to determine the link between campaign contributions and public policy. The search for influence was often muddled by preexisting partisan and philosophical ties between interest groups and public policy makers. Part of the complexity also arises from the large number of contrary interests pressing policy makers in seemingly opposite directions. In some ways, the pattern in local politics seems much more simple.

As Rich Rifkin pointed out in several columns leading up to the 2008 city council election, there is really only one group of public employees that was active in the council elections--the firefighters. Indeed in our examination of the Form 460 (Campaign Statements from the City Council Candidates), we find only a few very small contributions from city employees who are not firefighters. A Davis Police Officer and head of the Davis Police Officer Association made small contributions to incumbents Stephen Souza and Don Saylor, and the union itself made only a $100 contribution to candidate Sydney Vergis.

Compare that to the enormity of the contributions from the Davis Professional Firefighters Local 3494 and you see any influence is quickly dwarfed.

In the chart below you will see contributions by Local 3494 members cross-referenced with their 100K Club ranking. In the image below you only see top 20 members of the 100K Club. If you click on the link below you can see the entire list along with their city of residence. Thanks to Rich Rifkin for help with some of the data, along with yet another public records request from the city of Davis.

• CLICK HERE for the full list of Campaign Contributions by Local 3494 Members

The direct contributions total $12,000 to exactly three candidates--Incumbents Stephen Souza and Don Saylor and challenger Sydney Vergis. They are contributed in increments of $100 per Davis campaign finance regulations that limit individual contributions to $100 per person, per campaign cycle. The members of the Local 3494 union have found a way to bundle the money in an effort to increase their influence. This is part of the complaint against them in the Yolo County Grand Jury report.

As we know however from the campaign, direct contributions are not the end of the story. Independent Expenditure Committees in Davis must report their activity in the California Form 496 and their committee is required to fill out Form 450. Unlike direct contributions, there is no limitation in terms of their spending activities. Thus as we know, the Davis Firefighters launched two different IEs in favor of their preferred candidates. According to their filing from May 12, 2008, the Davis Firefighters spent $6070.46 on the Print and Design of the brochure featured in the link above. For the entire six month period ending on June 30, 2008, they report $8245.63 which includes expenditures on a door hanger they report as $373.03 per candidate.

The combination of direct contributions and independent expenditures totals over $20,000 for the period. A reported spending that actually seems a bit on the low side.

Nevertheless, this expenditure is in fact unique for city employees in Davis. No other group of employees have organized in this manner to attempt to influence the city council election outcome. And from past elections, we know that this is not unique.

The question now comes to what exactly this influence buys the Davis Professional Firefighters. Here we revisit our findings from the 100K Club of Davis article.

As we see from these charts, the Davis Firefighters emerge as the "top dawgs" in terms of both base salary and salary plus overtime...



The first chart shows that the Davis Fire Department makes the highest average base salary of any Davis city department outpacing the City Manager's Office by a good $15,000 and outpacing their fellow public safety department, the police, by over $20,000.



However, that advantage increases tremendously when overtime salaries are factored in. Even, given the fact that roughly 17% of the overtime salaries are reimbursed by the state of California, these statistics show that by far, the Davis Firefighters are the best paid workers in the city. And again, it is not even close.



Here you can see their overall slice of the pie, just looking at base salaries.

And what we discovered yesterday is that even with respect to other locales in the county, the city of Davis' employee scales are skewed.



Where does that leave us? Unfortunately it leaves us right where we started--an unsustainable situation for the city of Davis where the rising cost of employee salaries are threatening to throw the city's budget out of whack.



So we end this circle where we began--the Davis tax revenue has not kept up with the rising cost of employee salaries. We spent a good deal of time this spring talking about pensions--the cost of pensions for the city of Davis was just $900,000 in 2000-01, this year it's almost $6 million. And the bubble of retirements with the current 3% at 50 arrangement have not hit yet.

What is the cost of these rising expenditures, one needs to look no further than the front page of yesterday's Davis Enterprise for the answer. In there was an article about the inability to repair some of the Davis bikeways because the city lacks the funding. This by itself is a safety hazard. People talk about the fact that the fire department is responsible for protecting lives--there is no doubt that is true, even if the actual number of fires is fairly low compared to other service calls. However, as I have stated before it is unclear to me that we are less safe paying folks a strong wage of say $70,000 compared to a wage of $109K. It is less clear to me that we are more safe now, unable to pay for crucial road and other infrastructure repairs than we would be paying the firefighters a bit less, and keeping the overtime under control.

What the city calls unmet needs is really a budget deficit. It is a deficit between what the city needs to spend and what it can spend. And unmet needs are insidious. Failure to make repairs now, means more expensive repairs later. Failure to make repairs now means possible safety concerns down the line. The pattern here is quite clear. The residents of Davis who are concerned about taxation, need to watch this much more closely. The residents here concerned about quality of services need to watch this more closely as well. At some point, the city will need to figure out a way to finance this and it means taxation, development, and possibly cutback on services.

Stay tuned to future Vanguard articles as we explore other aspects of the city council finance records.

---Doug Paul Davis reporting

Vanguard Report: Re-Examining Davis Police Overtime

Last week, the Vanguard ran a story on Davis' 100K and it included data on employee overtime salaries.

source: city of Davis Finance Department

As you can see on the chart, breaking down overtime by Division, the Fire Department has the vast majority of the overtime with $1 million of the $1.93 million total. And public safety accounts for $1.68 million of that total or roughly 87 percent.

According to a tip last week, we learned of a an "extra duty" program that is sometimes given to police officers in their time off. For instance it could be for various groups event who contract with the city, it could be for patrolling apartment complexes for four hours at a time when they have had problems with parties. Some officers like to pick up the extra work, some do not.

The groups who request the extra duty officer get sent an invoice and the officer gets paid time and a half. The city accounts for this under program number 5619--everything listed under 5619 is being paid by sources other than city money.

It turns out, roughly $70,000 of that $627,000 in overtime is not paid for by the city but rather by these private groups.

Of the officers on our 100K of Davis list, the following officers received 5619 money:

Douglas Bates received $22,338.36 of his $56,959.39 OT from 5619
Glen Glasgow received $1,612.86 of $21,487.22 OT from 5619
Darren Pytel received all of his $1426.12 OT from 5619
Paul Doroshov received $734.57 of his $20,765.48 OT from 5619
Scott Smith received $14,426 of his $37,333.13 OT from 5619

For the full listing of all 5619 expenditures, please click here.

---Doug Paul Davis reporting

100K Club of Davis

PARTIAL LIST--Click here for the full listing

The Vanguard introduces the 100K Club of Davis. A listing of those Davis city employees who earned in 2007 over $100,000 in salary and overtime. This list does not include benefits in it. Once again these records were obtained via a Public Records Act request from the city of Davis.

One of the striking features of the 100K Club of Davis is that the city employee who earned the most money last year was not City Manager Bill Emlen but rather Fire Captain Richard Moore on the strength of over $77,000 in overtime wages. The only other non-public safety official in the top 10 was Parks and Community Services Director Donna Silva.

In all there are 61 members of the 100K Club of Davis from 2007. 48 of those were public safety employees. Of those 38 were firefighters.

This fact becomes more startling as we breakdown the top average salaries by department.

Here we see that the Fire Department has the top average base salary at $88,555 followed by the City Manager's office. The Police Department by contrast is fourth and just higher than the average city salary. Parks and Finance are the two lowest compensated departments in the city followed by the Public Works Department.

However, this graph does not tell the full story. The real story emerges when overtime wages are factored in.

Here we see the full magnitude of the current salary system. The Police Department benefits somewhat by the overtime system however, nothing compared to the Fire Department. With overtime factored in the average employee in the Fire Department out earns the next highest the department, the City Manager's Office, by over $35,000. The Fire Department makes just under 50% more than the next highest department in the city. And, the average worker for the city does not benefit much from overtime rules. The average wage only moves from $63.1 to $67.9K when overtime is factored in.

In all, the city paid out just under $2 million in overtime wages in 2007. One of the open questions is whether and at what point it is more cost effective to simply hire more employees rather than paying for the current employees time and a half to work overtime. Factored into that equation is the difference between overtime pay from regular wages versus the amount the city would have to pay in additional benefits and retirement to additional employees. However, on the surface, it would appear the city might be able to hire an additional 10 to 15 employees for what they are paying overtime.

This is the second in a series of Vanguard reports on the fiscal state of affairs for the city of Davis.

---Doug Paul Davis reporting

Vanguard Report: City of Davis Employee Salaries Rise Far Faster Than Tax Revenue

Through a public records request to the City of Davis, the Vanguard has obtained data that show from fiscal year 2000-01 through 2007-08 that city employee salaries rose far faster than the city's tax revenue.

Total compensation to city employees rose from just over $27 million in 2000-01 to just under $50 million in 2007-08, which is an increase of $21.7 million over an eight year period. At the same time, tax revenues only increased by $6.2 million from $18.3 million to $25.2 million.



While employee salaries increased by 50% of this time period, benefits nearly doubled, and retirement pensions increased by over five fold. Retirement pensions rose from $900,000 in 2000-01 to $5.8 million.

A large amount of these increases have come to upper management within the city rather than the rank and file employees. On Tuesday the Vanguard plans to breakdown the city's 100K Club--those city employees who earned over $100,000 in 2007, almost all of whom are upper level management employees for the city of Davis.



These numbers call into question the city's long term fiscal health. While the council majority of Mayor Ruth Asmundson, and Councilmembers Stephen Souza and Don Saylor have maintained that they have balanced the budget with the requisite reserves, critics have pointed out that this comes from an unusually large amount of unmet needs. These, unmet city needs, such as road repairs and other projects have been put on hold and will likely cost the city more in the future.

To this point, the council majority has dismissed criticism that the fiscal climate is not nearly as rosy as it appears.

During the last city council election Councilmembers Stephen Souza and Don Saylor repeatedly claimed that the city had a balanced budget with a 15% reserve each year of their tenure. At the same time, the council has tacitly acknowledged the problem with discussions of possible sales tax increases, 911 service call tax, and possibly a public safety tax in addition to the recently passed Parks Tax from 2006.

Councilmember Lamar Heystek told the Vanguard:

"It is clear that year after year, tax revenue is becoming less and less sufficient to address rapidly growing employee expenses. In order for the City to improve its financial picture, we must take steps to control the costs of our highest-paid personnel so that the disparity between tax revenue and employee expenses does not continue to escalate."

One possible implication painted by this budget picture is that the city use employee salaries and their impact on the budget as rationale to find new ways to generate revenue in order to balance the budget.

As mentioned previously, new taxes are already being weighed by the council. However, for those concerned about the specter of new growth pressures, this might be part of the impetus behind the increased employee salaries. The city will look to generate additional revenue and that means possibly additional commercial development and more likely additional housing in an attempt to get short-term gains from development deals and longer-term gains from an increased tax-base. However, as previously pointed out, that only goes so far. With additional housing, comes also the additional need for services, which figure to be ever-the-more-costly with the high price of employees and their benefits and pensions.

This sets the stage for a potential tax-hike coupled with the need for more business. But there is a note of caution here as well. The new Target store for instance, is projected to bring in a rather lucrative $600,000; however, this is a drop in the barrel compared to the huge totals for salaries and pensions that the city is facing in the future.

Even more ominous, is the fact that many of the employees' contracts are up in 2009. As we shall see on Tuesday, a large number of those contracts go to public safety employees, in particular firefighters who donated huge amounts to Stephen Souza and Don Saylor's reelection campaigns. That likely means that Stephen Souza and Don Saylor will be in no position to say, “no” to future lucrative contracts.

Stay tuned this week for upcoming reports on the City of Davis' fiscal state of affairs.

---Doug Paul Davis reporting