Davis in 250 Words (Part 8)

What measures would you take in order to contain city costs - please consider in your answer: employee compensation, city infrastructure including roads, city services including police and fire.

​Davis has no financial buffer after the longest period of continuous economic growth in modern history. That is poor planning. Going forward, we need automatic smoothing mechanisms to prepare for recessionary periods. Here are the first four short-term steps I would have taken six months ago to ensure a balanced pandemic budget.
 
First, implement robust campaigns to incentivize local spending. A large portion of our community saw little change to their income. What did change were their habits. Had we immediately put funds towards creating outdoor spaces and promoting the survival of local establishments, Davisites would have formed different pandemic habits than they have now.
 
Second, levels of service should not decrease, but the delivery of these services can shift to more fiscally responsible options. For example, reporting crimes like bicycle theft should be done online with necessary accommodation available. Another example of excessive response would be the five police officers, EMS, and fire truck I witnessed respond to address a single person downtown.
 
Third, consultants go first. The city needs to better utilize our knowledgeable community members who are willing to offer their expertise.
 
Fourth, pause research projects. As a researcher, I understand the importance of gaining knowledge to inform decisions going forward. However, if we cannot find grants to fund these at this time, they may need to wait.
 
Long-term is a different story where much of the budget is tied up in pensions and benefits. The first three steps apply, but here are my other long-term suggestions.

1. Automatic mechanisms for setting funds aside in expansionary periods. My current suggestion would be that all general fund revenue increases in excess of 3% from one year to the next be earmarked for recession spending as determined by a US Recession Probability (Chauvet 1998) exceeding 20% in a given month. Beginning with the 2012-13 fiscal year through 2017-18, this would have set aside around $15 million (data).
2. When budgets are proposed, we see a previous year or two of actual data, estimates for the current year, and proposals for the upcoming year. This is not enough information. We should see the previous five years of actual data, estimates for the current year all with proposed budgets for those years. We need to make informed decisions.
3. Create new non-cyclical sourced of funding which promote city goals. For example, an annual parking space fee on property. This would incentivize existing space dedicated to private vehicles to consider alternative uses and new construction to limit the amount of parking. In turn, this would create an incentive to choose alternatives which would decrease congestion and emissions. Additionally, this funding source would not vary based on economic conditions.
4. Counter-cyclical revenue such as a vacancy tax on non-residential properties would also assist. I first heard vacancy taxes suggested by Connor Gorman and was immediately on board. This would encourage property owners to sell, redevelop, or decrease rent in underutilized buildings as well as bring in additional funds in times when sales tax revenue is lower.
5. “Future growth assumes 30 housing units...annually.” (2-3 FY2020/21 Adopted Budget) Seriously, 30 housing units? We need more development than this. The housing market is never going to approach a healthy vacancy rate if we continue this way. Creating an environment where redevelopment is encouraged is essential for increasing revenue as well as improving the housing market. Right now, I would suggest form-based code throughout the city.
6. Current non-utility FTE is 411. 100 of those are in the police department. Almost half of those 100 employees brought in six figures in 2019. We need less police officers and more mental health professionals and social workers. This is more about the level of service than it is about budgeting. Budgeting is an added benefit. If you ask professionals to deal with mental health crises, addiction, homelessness, etc. rather than force police officers to do these jobs, it will take less of people. 
7. Get overtime under control in the Fire Department. It should not be acceptable for a department to pay $1.65 million in overtime in a year (2019). 

This is just a start. Over the next year, I plan to go through each department's budget in great detail, speaking to the department head and at least 10% of the total employees in the department, and identify five suggestions from an outsider's perspective to increase efficiency. As an economist, efficiency is a passion.

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