Prior to Guardiola and Jose, there wasn't a huge difference in quality between both squads. No coincidence that both teams finished on 66 pts in 2016.
When people say that City had a much better squad, they think only of City star players. Jose is right, City had more star players in KDB, Silva and Aguero (the latter was injury prone though, let's not forget that).
But people forget about the non-star players. And it's a horror show for City: Hart, Caballero, Sagna, Zabaleta, Demichelis, Kolarov, Fernando, Navas, Bony, Iheanacho, Toure (already way past it). Otamendi and Sterling were quite poor in 2015/16 and Kompany was already a sicknote.
For a club with City's financial resources and huge ambitions, their squad at the time was largely average. No surprise then that their results steeply declined from 2014 to 2016: 86 pts, 79 pts, 66 pts. Given their money power, their football directors were incredibly incompetent.