More Good Reasons to Vote NO on Davis Measure Q – Part 2

Mismanagement of City Finances by the Davis City Council

by the No on Measure Q Campaign Committee

Introduction and Background

This article is the second in a series presented by the No on Measure Q campaign committee about the new tax measure. The first article (see here) provided three good reasons for citizens to vote No on Measure Q  including a decided lack of transparency and disclosures by the City Council in bringing the measure to a vote   This 2^nd article discusses the mismanagement of city finances by the current administration, which is attempting to get their financial house in order by encouraging citizens to approve forking over millions of dollars annually rather than addressing the root causes of the city’s financial problems. The best way to describe this effort is that it is a “Bailout of financial and operational mismanagement!

About Measure Q

If passed on the November ballot, Davis Measure Q would double the extra sales tax from 1% to 2% imposed by the City of Davis on all goods purchased or used within the City except for some food and medicines. Based on the expected $11 million per year generated by the new tax and a Davis population of about 66,000, this works out to to be an approximately $165/year tax for every man, woman, and child in Davis. And like the previous two ½ percentage point sales and use tax hikes, this tax is permanent.  It doesn’t matter if the City’s financial condition substantially changes for the better in the future, this tax never goes away!   

Reason 4 –  The City Council suspended paying down $42 million of unfunded employee benefits.

The City has a massive $42 million debt for unfunded employee healthcare benefits. The City’s former Finance and Budget Commission made addressing this debt a central theme of many of its publicly-noticed meetings. This debt is simply  kicking the can down the road for our children to pay. The Davis Enterprise’s columnist Rich Rifkin has written about it often enough. Rising pension costs are a very real issue. Progress was made for many years until this last year when the City Council decided to suspend payments. To bail the Council out of its terrible fiscal mismanagement, the City Council is asking us to approve doubling the local extra sales tax by 1%.  But instead of using these new tax revenues to pay down the unfunded employee benefit debt and address the backlog of road repairs, the City Council says the new tax revenue will go toward providing “essential services” plus “new services and programs”.

This is like splurging on your credit card instead of paying off growing credit card debt. Taxpayers should vote NO on this new sales tax measure until the City Council puts in place independent financial oversight controls and creates a solid financial plan.

Reason 5 – The City has allowed its General Fund Reserve to shrink to 7.5% from the desired 15%

The City normally keeps a minimum 15% general fund reserve as a matter of sound fiscal policy. Last year the City let this reserve shrink to 7.5%.  What happens if the city has an emergency with so small a reserve?

The last thing to do in a financial crisis is to keep spending on nonessential projects when the city’s reserve is sinking badly, as if there weren't a care in the world. Ignoring a fiscal crisis, instead of addressing it, will almost certainly cause things to get worse.  Instead of exercising restraint, the City Council is trying to bail itself out of its financial hole of its own making, by getting taxpayers to approve Measure Q. It will add an additional 1% increase in the sales tax on top of the extra 1% we already approved.

Rather than using the $11 million in new tax proceeds to build up the reserves again, unbelievably they plan to spend the proposed new tax revenue on unspecified new programs and services! 

Continually increasing taxes to create new programs is unsustainable economic policy.  Taxpayers have to rein in profligate spending by refusing to approve any increase in taxes as long as the City Council abdicates its responsibility to be better stewards of our money.

Reason 6 – The City Council has squandered many millions of dollars on “Nice-to-Have” projects Instead of maintaining what It already has.

In 2022, the City Council authorized the purchase of a brand new ladder truck and equipment for the City’s Fire Department for millions of dollars, even though the City has access to UC Davis’ ladder truck about a mile away. And there are only a few Davis buildings high enough to even need a ladder truck and these are already fully equipped with sprinklers. 

Even worse, the City also has to spend more than $1 million per year to hire additional firefighters and incur other costs to operate the truck. They also needed to spend $600,000 more to expand the downtown fire station to accommodate this larger truck.

Further, the City Council authorized spending over $1,500,000 refurbishing the 3 perfectly functional kitchens in the City’s three fire stations. And the list of wasteful spending goes on. Voters should reject Measure Q until there are checks and balances in place to limit our Councils’ wasteful and profligate spending!

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Summary and Conclusion

The Davis City Council has squandered millions of the public’s money pursuing “nice-to-have”, but unnecessary projects and acquisitions. These expenditures were at the expense of suspending paying down the City’s $42 million debt of unfunded pension obligations owed by the city, and not maintaining the desired General Fund Reserve level of 15%. This City Council does not deserve our money until they get their financial priorities straight and implement rigid internal financial controls to ensure their financial priorities are in place and followed.

Our next article will discuss additional reasons why voters should reject Measure Q including the City Council’s failure to properly maintain City assets.

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PLEASE VOTE NO ON MEASURE Q – QUIT WASTING OUR TAXES!

www.NoOnDavisMeasureQ.com