Bob Deis has been Stockton city manager for less than a year. Since coming on board last June, Deis has faced numerous challenges, most notably finding a solution to the city’s enormous budget shortfall and looming pension obligations. We sat down with him recently to discuss some of those issues and his plans to revitalize Stockton’s business climate.
Comstock’s: You’ve been here
less than a year. How would you describe Stockton’s fiscal
situation?
Deis: It’s dire. We have to come up with around $27
million in reductions by June 30, and that’s after already
decimating most of the departments. When you have a city with the
second-highest violent crime rate in the state and you eliminate
99 officers, you know there have already been some serious
reductions. And yet we have another $27 million hole for next
year. So we really have only a few options to deal with this,
including further cuts and concessions from employees to help us
reduce personnel costs. The third option is bankruptcy, which I
view no differently than I would in my personal finances — as an
absolute last resort. Even that is not a panacea because all it
really does is hit the pause button, so you can go back and talk
about the other two items.
Comstock’s: How many total
employees do you have?
Deis: Fourteen-hundred, which is about half of what a
normal city of 300,000 would have. So we’re a modest organization
already. But it isn’t just the $27 million: The next year you can
add another $7 million to $8 million, and the year after that is
an additional $5 million. It just gets worse. So we’re trying to
come up with a three-year game plan that doesn’t just kick the
can down the road year after year. Then, assuming we can pull
that off, we still haven’t dealt with the retiree medical
liability. This city has made some very generous health care
commitments to its employees, but it never funded it the way you
do retirement. According to the latest actuary report, we’re
looking at a $544 million unfunded liability. It’s staggering. It
doesn’t have to be addressed in the next six months like the
budget, but it has to be part of the conversation and involves
both current employees and retirees.
Comstock’s: Would you consider
becoming a contract city that hires out essential city services
like police service?
Deis: Because of our size, contracting out the police
department would be very difficult. We have some high crime rates
here, and we would not want to give up the expertise our police
force has acquired. That said, my predecessor has already
contracted out a huge amount of our services, including all the
maintenance for what is a pretty good-sized metro park system.
We’re also seeking to contract out our golf courses and our civic
auditorium, so I’d say we’ve already pretty much squeezed the
blood out of that turnip.
Comstock’s: California is one
of many states that have taken steps to reform their pension
systems. Ours applies only to new hires going forward, but some
states have taken legal action to make some of their changes
retroactive. If those cases are successful, would you consider
taking a similar tack here in Stockton?
Deis: I can’t see myself going there. There are already
too many other issues we’re trying to deal with. That would be
like tossing a lit match into gasoline. The issue is that several
years ago we enhanced these pension plans to the point where they
are not sustainable. So I would tend to argue that we should
focus on new hires but return to the basic formulas in place
before government became the equivalent of drunken sailors. If we
do that, the system could be sustainable again. I’m also still a
proponent of defined benefit plans and would oppose changing to a
defined contribution system for our workers because I think that
is a race to the bottom. Just because the private sector has
changed its model doesn’t mean we have to do the same thing.
Comstock’s: We’ve talked a lot
about employee cuts and concessions. There is certainly a feeling
among some workers that they are bearing a disproportionate
amount of the load here. Some point specifically to a large
salary increase for your position when you came on board and to
your hiring of a new deputy city manager, a position the city
didn’t have before. What’s your response to those concerns?
Deis: It may not happen overnight, but my goal is to get
all of our employees roughly into the same place. What does that
mean? It means we get the Council to agree to a compensation goal
and philosophy and then we apply it to everybody, including me,
the deputies and everyone in the field. But the reality is that
what kicks out of that method is that I’m going to make more than
someone that answers the phones. I won’t argue whether I’m worth
more, but that’s the market. I can say with confidence that if
you look at my peers with like experience in like organizations,
I’m paid less than the average of the labor market.
When it comes to hiring the new deputy city manager, I’ll say this: If the Council wants to accomplish the things they have asked me to accomplish, I need the staff to do it. Our new deputy city manager (former San Joaquin Partnership President and CEO Mike Locke) is now in charge of the four departments that have the greatest impact on our economy. The Council wants to enhance economic investment in this community and to create jobs, and I can’t do that on my own while also balancing the budget and achieving their other goals. I need someone focused on that goal, and the person I hired has 16 years of experience doing nothing but working to bring new employers to this region and encouraging current employers to expand.
Comstock’s: The public these
days generally has a very dim view of government. Is it also part
of your responsibility to ensure that citizens understand how
their government is working?
Deis: Absolutely. You can have the best product in the
world, but if nobody knows about it you are dead in the water. So
I own the responsibility of not necessarily educating people, but
informing them about what the city is really up to. I’ve lived in
Northern California for a number of years, and there is a
perception of Stockton, some of it perpetuated in the media, that
is pretty negative. That angers me. I’ve been immersed in going
out and meeting people here, and they are also really offended at
that. It also plays out in trying to attract employers. It’s my
experience that in a vacuum of information, anecdotal experiences
determine people’s opinions and that negative stuff obviously
attracts the most attention. So one of my jobs is to communicate
what we are doing and to let people know we have a plan.
Comstock’s: Are you seeing any
positive shift in that perception from outside employers?
Deis: Oh, absolutely. I have met several times with many
of the CEOs that drive Stockton’s economy, and the feedback I
have received from them is that this is the best situation for
Stockton in 20 years, particularly in regard to the City
Council/city manager combination. Things are positive, and people
are working together. I’ve told them we’re going to change our
culture and how we interact with business and approach our
regulatory function. There’s going to be a whole new filter on
how we approach making decisions. They love it.
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