Budget | District 6

WeePeeCeePee

The water treatment plant in Alviso will soon be able to make wastewater potable. Robert Dawson photo.

Last week, the City Council moved forward with an Environmental Impact Report (EIR) for the water pollution control plant often referred to verbally as “weepeeceepee” (WPCP). The plant and the land are jointly owned by San Jose and the City of Santa Clara.

There are competing interests on what to do with the area surrounding the plant. Some would like all of open space land preserved for natural habitat for the burrowing owl and other animals. Others would like to the area devoted to large parks with trail connectivity. Still others look to this as an area where San Jose could add office and retail opportunities to increase the tax base.

A permanent decision will most likely not be made until the EIR is completed in a couple years. However, what we do know now is that we must spend some money on updating the WPCP so that it continues to work and comply with federal regulations.

Perhaps with such a great land mass, there might be something for everyone? Would it be possible to have land for jobs, open space and a park? Do we try to please everyone or choose one option and stick with it?

Speakers from Alviso spoke about their concerns regarding added traffic to their area and shared concerns that any new retail would take away from the limited existing retail that is currently in Alviso.

This area is also where the advanced water treatment plant is being built that will take waste water and turn into clean potable water. Actually, this water will be cleaner than current tap water and certainly bottled water. This simple fact is important in the education process of consumers in water consumption. It is expected to open in June 2012.

Staff shared an extensive power point at the council meeting that I have placed on my council website as I have done with other staff presentations for you to view. The presentation is more visual and perhaps easier to understand than a long report so I encourage you to click on this link: City of San Jose District 6 Staff Presentations. From there, click on Water Pollution Control Plant Master Plan: April 19, 2011 to view and learn more. This power point is the bulk of this weeks blog. Appreciate any comments you can provide from what you discern on the power point presentation.

On another topic, the District 1 and 3 budget meetings had comments from actual residents this week. To summarize, people wanted the council to fix the structural budget problem so we can restore services in the future. A woman at the District 3 meeting, who is a volunteer at a community center, said she and her neighbors understand that the City has no money and to “Just do your best and God bless.”

Also posted in City Council, Politics, Water Pollution | Comments closed

Paint Over Walls Or Paradigms?

Graffiti abatement in San Jose costs the Parks & Rec department $1.7 million per year. Local residents occasionally chip in to help.

I attended the District 5 (D5) community budget meeting last week—it was the third D5 community budget meeting I’ve attended. Approximately 50 people were there, with the majority being city employees. Many of the speakers shared emotional testimonials.

One speaker stood out to me. She shared how cutting of library hours from 4.5 days to three days a week would cause a large burden to her neighborhood. She teaches music at the Hillview Library and is close to the youth who rely on the existing library. She said keeping library hours open in her neighborhood was important since she feels her neighborhood has a higher need than other areas.

This theme was prevalent. Another woman brought up that since D5 has a higher crime rate, then why not keep D5 libraries open and close District 10 (D10) libraries since crime is low there? I have asked the same question before. Should library hours be based on need? How do we determine the need? Crime stats? Census date by race and income?

Another person was concerned about the police layoffs and how they need more police in D5. Truth is we do allocate more police to D5 than D10, for example. Since there are more calls for service in D5 than D10 our police force plans accordingly.

Another felt D5 had not gotten its fair share of capital projects compared to other districts. This one would take some research but I think it is fair to say between the Redevelopment Agency spending through the Strong Neighborhoods Initiative ($105 million for a third of San Jose), Fire Station 2, Mayfair Community Center, Alum Rock Library, Hillview Library, Mexican Heritage Plaza, to name some projects, the last 10-15 years was better for D5 than the previous period of historical neglect.

The other major issue of the night was the option of outsourcing to save money and retain a city service. The one that got the most discussion was outsourcing the anti-graffiti painting currently performed by city employees. It was felt that the painting of walls was too important to outsource and instead should only be done city employees. Currently it costs $1.7 million to do this service and the Parks Recreation Neighborhood Services (PRNS) Department (which runs this program) estimates it could be done for $1.1 million which equates to $600,000 in savings by keeping the service but providing it a different way.

The employees who perform this work have shown up at each budget meeting to speak against the outsourcing. This service is really needed in D5; I witnessed to and from the meeting that there was substantial tagging. The sheer amount of tagging I witnessed gave the appearance that the City does not offer this service today. Speakers at the meeting felt that city staff would work harder than a private contractor. One option might be to outsource half of the city to a private contractor and the other half to city employees and judge it in a year. However, this would not generate the total savings needed to balance the department budget and thus provide this service.

The savings in outsourcing park maintenance looks even higher. The current cost for only maintaining small parks under two acres and park bathrooms is $4.1 million where if it was outsourced it is estimated to be only $1.3 million for a savings of $2.8 million.

I understand that some people will lose their current job through outsourcing and may go to work for the private contractor earning less, but the City’s responsibility is to provide services for 950,000 residents. The employees who may lose their job did nothing wrong, it’s just a sign of the times that the City needs to re-look how it can continue services and save money. The City saved $4 million last year outsourcing janitorial at the Airport and City Hall and everything is just as clean.

Last week, at the District 7 (D7) budget meeting, a career Navy veteran advocated for opening the Seven Trees library, which is completed but not yet open. However he went on to say that there should be immediate changes to the pension system. He mentioned how he receives a 30 percent pension for 25 years serving our country in the military.

Also posted in District 5, Outsourcing, Politics | Comments closed

A Tap on the Shoulder

The citywide Community Budget meetings started last week with the city manager and other city department heads in attendance to answer questions. Ten public meetings will be held with one meeting in each Council district.

This first meeting was held in District 2 with approximately 100 people in attendance. From my perspective of recognizing faces, listening to questions and subsequent applause, approximately 80 percent of those in attendance were city employees. The high ratio of employees is understandable, since most employees would attend a meeting if their employer was discussing layoffs.

Government has a much softer and proactive approach to layoffs than the private sector. For example, I was laid off twice myself due to market downturns and in both cases I did not have advanced notification that I would be let go. Instead, I, like many, got a tap on the shoulder from HR and a two-week severance check. Although it is stressful to know that layoffs are looming, at least one can plan accordingly rather than having the HR shoulder-tap, which, unfortunately happens often in private sector.

The mayor spoke at the meeting and answered questions from the audience. After he finished, Ed Shikada, our assistant city manager, walked through a presentation of the budget deficit and some of the alternative cuts that might be selected by the city manager in arriving at a balanced budget. The presentation was followed by Q and A. This week there will be meetings in District 5 and 7.

There was a survey card that was distributed at the end of the meeting that asked a few questions. I put the five questions on the internet for you to answer in case you are unable to attend the nine remaining meetings: 2011 San Jose citywide Community Budget meetings.

Also, last week San Jose welcomed a new clean tech company to North San Jose. Wrightspeed Inc., designs digital drive systems to replace conventional power trains for commercial vehicles. Trucks that have Wrightspeed drive systems installed do not consume as much fuel, providing cost savings to the vehicle fleet. California spends $150 million a day on fuel, placing the state in third place globally for consumption of fuel, behind the United States as a whole and China.

Why would Wrightspeed, which started in Burlingame, move its 20-plus employees, mostly engineers, to San Jose? The company moved to San Jose because of our Office of Economic Development. Wrighstpeed was part of the Clean Tech Open that the City of San Jose sponsored (marketing). A connection was made by staff at the event (sales), who kept in touch with Wrightspeed.

When it came to looking for a new building, our staff facilitated a search and found a building within our Enterprise Zone which makes Wrightspeed eligible for state tax credits on hiring new employees. (Gov. Brown has proposed eliminating Enterprise Zones). In addition, San Jose has a foreign trade zone which allows Wrightspeed to import sub assemblies from Europe without tariffs, to put into their end product. Wrightspeed will also generate sales tax for the city of San Jose since they sell a physical object.

It is important to always be focused on growing our economic pie but it does not always happen if a city does not have a sales team.

Also posted in District 5, Politics | Comments closed

Comments on Firefighters Contract

San Jose’s Fire Station 6 was put on the chopping block in 2008.

Last week the council took up the firefighters union contract with more than 100 firefighters in attendance. I thought I would share why I voted no.
First, I think it is clear that if you have worked in city government over the years that things are drastically changing due to structural budget deficits. Second, if you are new to working in city government, you will most likely not have the same career as those before you.
I remember when I was a candidate for city council and meeting with the fire union. We covered a variety of topics but I always remember this question: “How would you help us with city management on wage and benefit negotiations.” I recall saying that I would attend the union negotiations myself. They were quite happy and said that was a great response. However, the firefighters union did not inform me then of the reality that labor negotiations are not open to council members.

I appreciated the 10 percent concession and was surprised that it did not go through binding arbitration. I believe the new interim president of the union is a sincere person.

Even with the 10 percent and after vacancies and retirements, we will still lay off more than 30 firefighters. However, the larger item which remains is minimum staffing for fire engines. I have brought up the minimum staffing issue in council meetings, committee meetings and budget meetings.

The LAFCO report on all Santa Clara County fire departments shows that San Jose is the only city in the county that has four firefighters on an engine. Also looking at the same report it shows we have an over 25-to-1 ratio in calls for medical vs. fire.
I believe we should lower the amount of medical calls when council approves the ambulance contract with the County. County government, by state law, controls the ambulance contracts. We should stop having our fire fighters respond to calls that are not necessary, like those at the county jail, since they already have medical personnel at the jail. In addition, low priority alpha and bravo medical calls should be left to ambulances.

Other cities as mentioned above are able to make do with three on an engine. We may want four on an engine and we may even want five, but we cannot afford it. This does not mean every engine would have three instead of four, as not all stations are equally busy, and therefore it provides the flexibility to keep stations open. Residents are not so concerned if there are three or four on a engine, but they do care if the station is open or closed.

Because of minimum staffing requirements in the recently accepted fire contract and the unavoidable layoffs, we would close fire stations.

Back in 2008, when Station 6 was a line item to be sold in the city budget with zero notification to residents, I initiated the policy passed by the Council that mandates mailed notification to residents and two evening public meetings with the presentation of data for the primary service area when fire stations are proposed to be closed. Most importantly, it does not allow a station closure to be included in the budget prior to the prescribed outreach. Before this policy fire stations could be sold/closed with no notice.
So like the Communications Hill neighborhood, which now has a closed fire station, other fire stations somewhere in San Jose will need to be closed due to minimum staffing. It is unfair to residents that we close stations when they can remain open with one less person to maintain response times based on distance.

If the council does not want to see fire engines taken out of service than we will need to makes cuts elsewhere. The most likely place for those cuts will be our police department, with the laying off of police officers.
We do not have a minimum staffing requirement applied to police cars for police officers. If police run short on a shift they do not say “let’s stop patrolling in Almaden or Berryessa.” We do not have minimum staffing for our libraries. We do not have minimum staffing for our planning department to process an application for development.
This comes down to what is most important for San Jose in 2011 with the limited taxpayer dollars that are available to allocate. For me the answer is simple. It is police. Police enforce the social contract. No one else does.

The social contract allows individuals to be free from harm and intimidation.

The social contract allows the weak to be protected.

We cannot do everything. In fact we can’t even do both…police or fire. So we have to choose.
This fire union contract makes the fire department the number-one priority in the city budget by maintaining minimum staffing on fire engines. I cannot say this is my number-one priority nor my residents’ number-one priority when we provide multiple services to residents.
With that said, I vote against funding charities even when they are great organizations; they are not in the city charter. In addition to voting against the Hayes Mansion, golf courses, million dollar IT projects gone wrong or championing $1.475 million in cost avoidance on a current IT project. I voted against $1.3 million on golf nets, rezoning industrial land to residential, affordable housing that does not pay property tax. And I support outsourcing of services like janitorial to save money for core services.
I think it is wrong for myself as an elected official to make promises to every group or specific union when the reality is restricted resources do not allow promises to be kept.

Also posted in City Council, Politics | Comments closed

Where to Draw the Line?

The 2010 Census data came out and the good news, from my perspective, is the population of San Jose is not one million people but instead 945,942. However, I am told there is under-counting as some residents do not want to be counted. Our population growth rate has slowed to 5.7 percent as opposed to 37 percent in the 1970’s. The average people per household city wide is 3.14, however the average number of people per household in District 5 is 4.5.

This census data will be used by the Redistricting Advisory Commission to make suggestions to the City Council on how the council district boundaries should be redrawn. Each Councilmember appointed a district resident to the commission and the Mayor appointed the chair. The goal is to have the Council districts relatively even in population by plus or minus 5 percent. The commission may take major boundaries into consideration like freeways or railroad lines, as well as non-physical boundaries like school attendance areas. The commission is having a public meeting tonight (March 14) at 6:30pm at City Hall to the discuss the data.

The council district populations as of the 2010 Census are as follows:
District 1: 88,645
District 2: 92,314
District 3: 93,896
District 4: 102,976
District 5: 90,863
District 6: 100,236
District 7: 97,868
District 8: 101,108
District 9: 88,853
District 10: 89,183

Council District 1,9 and 10 will expand boundaries to gain population while districts 4,6 and 8 will contract to lose population. For example, District 4 would need to shed an area that contains 3,652 residents while District 1 needs to expand the district to gain 1,219 residents. Whether it is expansion or contraction some residents will get a new councilperson. I have found for some residents this is a big deal and for others it does not matter. Would it matter to you?

The 2010 Census also tracks data on race and uses terms like White and Hispanic. District 9 had the highest White population. While District 4 had the highest Asian population and District 5 the highest Hispanic population. Districts 2 and 6 tied for the highest African American population.

Should the redistricting commission recommend that Council district boundaries are changed to achieve nearly equal distribution by race?

Mayor Reed came out with the Budget Message for the Council on Friday, March 11. If you want to read more than what can be covered by the media follow that link.

The Mayor’s budget message is quite serious in the challenges we face. As we look at the devastation in Japan I believe it is important to not drain our limited financial reserves in case of a natural disaster in San Jose.

Also posted in City Council, Redistricting | Comments closed

Broad Support for Performance Evaluations

After much discussion at the City Council meeting last week the Council voted in favor of having city staff study performance as a criteria when it comes to employee layoffs.

The review will determine if the City should include job performance when considering layoffs, or keep the current system in place, which is based solely on seniority. Due to budget shortfalls, the City has eliminated “vacant positions,” which were budgeted with the intention of hiring someone to fill them. Elimination of those positions generated savings, since the savings came from no longer budgeting for the positions.

As a result, the City is forced to do layoffs, based on seniority only. For example, you may have someone on the job for nine years who is under performing yet someone who has been on the job for six years and is a great worker. The person who has been with the City for nine years will “bump” the better performing employee, in the same or different department.

In some situations the person going into the new position does not have the skill set to do the job. This causes disruption to that department and disruption to the client (residents, business,etc). For example someone who has never stepped foot in the water pollution control plant now has a job at the plant, which requires a special skill. Skill sets and domain expertise are lost when people bump to other departments based only on seniority.

There are two points which I think get overlooked in this debate. One: My proposal does not eliminate seniority as a measurement but instead adds performance as a factor. Whether performance will be 10 percent or 20 percent of the total criteria remains to be seen. We may eventually also decide to include education and certification as well. We need some way other than months on the job to make a informed decision.

The other item being overlooked is that performance should be considered when getting a raise or a promotion—not just the current situation of layoffs. Today, salary step increases are rewarded only based on seniority. Adding performance as a criteria should also be considered.
In addition, city staff will study the current evaluation process, which has not always been followed. Some say that evaluations do not matter since the current system is only based on seniority. I would personally be interested in a affordable software evaluation solution so that HR can track all evaluations in real time, and that there is a standard format with the option of allowing some customization of questions for specialty jobs.

I am surprised that this issue was not resolved in prior decades and that there is strong opposition from the leadership of public employee unions. Several city employees in different departments have mentioned to me that it is disappointing to work with someone who does not carry their weight. This is about civil service rules and not about unions, however there will be a lengthy meet-and-confer discussion with the 11 unions. In comparison, the numerous building trade unions do not have seniority and bumping. Union trade members are hired and fired based on work performance.

Seniority is being raised also in Los Angeles, where the ACLU has won in court against the school district, by Mayor Antonio Villaraigosa, a former teachers union organizer. “We cannot continue to automatically guarantee lifetime employment to all teachers,” Mayor Villaraigosa said, “nor can we make decisions about assignments, transfers and layoffs solely on the basis of seniority. Tenure and seniority must be reformed or we will be left with only one option: eliminating it entirely.” If a former union organizer and now Democratic Mayor of California’s biggest city can support performance evaluations, plus 79 percent of San Jose residents, so to should the San Jose City Council.

Congratulations to Arizona-based Microchip Inc, a veteran semiconductor company. They recently located their Silicon Valley office to San Jose from Sunnyvale filling up 100,000 square feet in North San Jose.

Saturday, the Willow Glen Rams defeated the Burlingame Panthers for the division two boys varsity soccer championship. It was first championship soccer win for Willow Glen. Congratulations to Julio Morales who scored two of the three goals.

Ten seats remain unclaimed for tonight’s 6:30pm showing of “The Olmstead Legacy” at City Hall. Please email me to hold a seat(s) atPierluigi.Oliverio@SanJoseCA.gov

http://www.theolmstedlegacy.com/

Also posted in City Council, Politics, Unions | Comments closed

What Should the City Do With Sick Leave Payouts?

Sick leave payouts are part of the City of San Jose budget deficit problem. These payouts do not discriminate; every employee including management accrues sick leave, and if employed with the City long enough, will be eligible for sick leave payout when they retiree. One exception is that councilmembers do not accrue sick leave.

The City of San Jose has paid over $28 million over the last two years for sick leave payouts. Upon retirement, the City pays out those sick leave hours at the current base pay plus other premium pay(s). Unfortunately, the Council/City failed to design a system that would track sick leave at the pay rate it was accrued. The City cannot go back and retroactively change the structure so that all employees sick leave is adjusted to the specific pay that their sick leave was accrued at. In hindsight the sick leave structure should have been one that pays out sick leave on the rate it was actually earned with a maximum cap but this was not how the past Council set it up.

Two years ago, I called for capping sick leave pay outs to no more than $100,000 but there was little support to change the existing system. Any change to sick leave payouts then or now would require the City of San Jose to go through the Meet and Confer process with the unions. The Meet and Confer process can take as long as a year.

$28 million is a significant amount of money; more than the annual citywide library budget and quarter of our budget deficit. In my view, we need to change the benefits on sick leave just as we will on pensions for new employees. It should be eliminated for new employees so that it is like the private sector, a use it or lose it benefit for those that are actually sick.

So now what do we do with everyone that was promised to be paid on their accumulated sick leave hours? There are different options, however, any change goes to the “Meet and Confer” process with the 11 Unions.

One option is to cap the amount of the payout to say no more than $100,000, or $80,000, pick your number. The other is to phase out sick leave over a number of years where the payout is reduced X percentage each year until the benefit is eliminated. Another option would be that the City pays out over time.

If the City must pay out another $14 million in sick leave this year that means we do not have $14 million to employ police or librarians to provide services to residents. Paying out another $14 million in sick leave would cause an undue burden to our residents. So instead of paying out $14 million in one lump sum I would suggest we pay it out over 10 years or roll it into the employees’ pensions. This would leave us with money on hand to keep city employees employed. Then, in the next budget year we would know the amount of the sick leave payout from the prior year and make subsequent budget cuts in the next fiscal years. However, we will have the same fiscal liability every year unless we change the current system.

Government is known for making promises it cannot keep. People and businesses downsize or use bankruptcy to reorganize their debt and obligations. If The City is avoiding the “B” word then we must figure out a way to keep San Jose afloat, since we will continue to have $50 million increases in the pension system each year that is paid directly by the taxpayer.

Clearly if a person is about to retire, then they are getting out at a lucrative time and probably do not care about concessions. However, if you are an employee with less seniority (since merit is not a factor today) you may be more inclined to accept concessions to keep income coming in as being laid off is a 100 percent pay cut. Only time will tell but it will all hit the fan in the next few months.

Congratulations to the Association of Legal Professionals of The City of San Jose for being the first collective bargaining group to conduct their negotiations as public meetings. I attended and was enlightened to watch as a member of the public last Thursday.

Joint Venture Silicon Valley held their annual State of Silicon Valley 2011 last Friday at the San Jose Convention Center. Much of the time was spent on how cities and counties will have hard times the next five years due to rising pension costs and decreased revenues. The outlook was grim and the notion of never recovering and delivering services the same way was discussed. Therefore they advocated outsourcing and consolidating services among cities to cut out duplicate administrative positions.

Also posted in Unions | Comments closed

Be My Budget Valentine

The Budget Valentine will be visiting with the Council today at 1:30pm. The Council is having a public study session that will be streamed on the Internet and broadcast on Channel 26. This meeting will include discussion of what cuts will be required based on the budget shortfall.

The budget is assuming that each union agrees to 10 percent total compensation cut. Last year, 25 percent of the workforce took 10 percent total compensation cuts for one year. The current ask of 10 percent is not in addition to the cut from last year, but rather maintains the 10 percent cuts another year for those who took it. The budget is also asking the remaining 75 percent of employees who did not take a 10 percent cut last year to please do their part and take the same cut the others have.

I have thought that a pay freeze for five years or more would be a way to cap spending, but increased pension payments and slow incremental property tax receipts do not allow for this option.

Service-delivery model changes will be discussed as a way to maintain services for residents since layoffs will be sizable. It will challenge the values of providing services to residents versus the current delivery model.

Even if the assumption that the entire workforce takes a 10 percent total compensation cut, the City will still have a huge deficit and therefore sizable reductions in service, thus layoffs. An alternative to the 10 percent total compensation pay cut would be additional layoffs. There is no easy way out and the impacts will be stark. We will also discuss options on the increasing taxpayer contributions to the pension funds and legal options on pension reform.

The last portion of the meeting is something I have asked for several times. This is where the Council must prioritize/rank ordinances. Ordinances originate from Councilmembers, City Departments and State/Federal regulation. Implementing ordinances in many instances will involve the city attorney, planning department, office of economic development, public works, department of transportation and so on. Each ordinance takes time and effort to implement thus what we call “workload.” I believe ordinances should be prioritized to what could bring in revenue to the City and then what may stimulate economic activity. Quality of life ordinances may have to be put on hold. Some of the choices are:

• Landscape Ordinance to reduce water consumption
• Habitat Conservation Plan
• Sign Code
• Electronic Signs
• Bail Bonds Zoning
• Distinctive Neighborhoods for preserving neighborhood character
• Green Building for home additions and alterations
• Lighting on Private Property
• Off-Sale Alcohol Process
• Fence Heights
• Tree Removal Process
• City Landmark Criteria
• Regulate Check Cashing
• Medical Cannabis
• Zoning for Housing around Transit
• Outdoor Events in public places
• Towed Car Regulation
• Condominium/Apartment Conversion
• Social Host-Liability for adults that allow minors to drink alcohol
• City-County Collaboration
• Smoking Outdoors
• Excessive Police Force
• Expansion of Parking Meters
• Taxicab Vehicle Regulation

Which ordinances are most important to you?

Finally, you may have heard that San Jose is eligible for a $15 million (over two years) Federal Grant from Federal Emergency Management Agency (FEMA) to rehire firefighters who were laid off last year when an agreement could not be reached on concessions. The grant sounds good; however, there is a significant string attached to your federal tax dollars.

If the grant is accepted then there would be zero layoffs in the fire department for the next two years. As I mentioned above, the deficit, even with 10 percent concession, is huge and accepting this grant would force the City to lay off, in an out-of-proportion scale, police officers, librarians, attorneys, planning staff, public works staff, community center staff, transportation staff,etc…

In addition the taxpayer contributions to the pensions will grow again next year which may cause even more layoffs outside of the fire department the secnd year of the grant. A concession from the Fire Union to not impact police for example would be much higher than 10 percent and would be in the 15 percent to 20 percent range. A concession of this size is highly unlikely, but never say never.

A FEMA grant with these stringent terms should be rejected Monday unless terms can be changed by the Feds. The Federal COPS grant Council accepted did not have these restrictions.

I highly recommend that you watch the budget study session today at 1:30pm and share your thoughts afterwards.

Watch the San Jose City Council study session on the 2011 budget here.
View the San Jose City Council Budget Study Session Agenda here.

Posted in Budget | Comments closed

2011 Community Budget Survey Results

As you may remember, two weeks ago I shared that the City of San Jose contracted with a public opinion organization to conduct a telephone poll of 1,000 residents. These residents were asked survey questions from Jan. 13 to Jan .17. In comparison to my web survey, the City did a “scientific survey” which means they called men and women from all council districts, different age groups, ethnically diverse, homeowners and renters who are likely voters. The company responsible is instructed to get a group that mirrors San Jose.

Here are the results from the 2011 City of San Jose budget web survey.

As I have shared in previous blogs, the surveys that I conduct are not scientific. They can be taken by anyone, and passed on through e-mail, therefore allowing anyone who has access to a computer to take it. The only control is the the survey can only be completed once on a computer. So, for example, if you have one computer in your household and one person completed the survey on that computer, then the survey can not be taken again.

Sharing surveys, especially those that are about budgets and policy, is commonplace. Each week I receive several emails offline by actual residents about my blog. Residents shared they like to see what questions are being asked on the phone survey and to consider the choices themselves.

I edited the survey so that it did not have so much “city speak” in it. I also deleted and added to the format. For example, I omitted a question that I found confusing regarding transferring $1.5 million from municipal water to the general fund. I also modified a word that read “non-profits” and I wrote “charity/non-profits” since I have found people are unclear when they only hear non-profit.

On questions about retirement age, the survey did not offer the current retirement age as an option so I added that. Plus I added the Social Security retirement age. The library tax question did not share the existing parcel tax cost so I added that. On the question of reducing the number of firefighters assigned to “certain” stations—“certain” stations translates to the least calls for service so I swapped in word “slowest.” On ending overtime pay for fire battalion chiefs and police captains, I found most people don’t know what these ranks mean, so I swapped out the titles and put in the word “management” as they are managers. My goal was to make the survey east to understand for residents.

With all this said, can I or you or anyone else for that matter learn anything from the survey? Can we extrapolate anything from it? Well, that will be up to you to judge. Here are some results from the scientific poll:

80 percent support giving raises based on performance rather than seniority.

79 percent support slowing the pace of City employee pay raises.

79 percent support making decision on layoffs based on employee performance
rather than seniority.

73 percent support eliminating the traditional pension plan and replacing it with a 401K.

73 percent support limiting the amount of union business that union leaders can conduct while on City time.

69 percent support lowering the maximum level of annual pension benefits employees can receive.

65 percent support ending the policy of paying employees for a portion of their unused sick leave.

67 percent feel it is acceptable to reduce days and hours of operation at community centers.

61 percent feel it is acceptable to reduce the number of days the libraries are open.

The Mayor held the 5th Annual Neighborhood Association and Youth Commission Priority Session this past Saturday. Great turnout but unfortunately not equal attendance from all parts of San Jose. This yearInnovation Games donated their services (free) which consisted of 25 collaborators to facilitate each table into discussing and making choices about the budget.

Participants were given play money and trade offs the Council will have to make. To eliminate a program, 100 percent of the table participants had to agree. To continue funding a program participants had allocate their play money—however it required buy-in from other table participants. City department heads were in attendance to answer specific questions from participants. Nearly all of the comments I heard Saturday were favorable from participants. Congratulations to our Mayor for incorporating more public input on the budget.

Posted in Budget | Comments closed

2011 City of San Jose Community Budget Survey

The City of San Jose contracted with a public opinion organization to conduct a telephone poll of 1,000 San Jose residents. Residents will be asked survey questions about the budget and city services from Jan 13 to Jan 17.

The results of the phone survey will be shared in February. Please note I received a draft of the survey and some of the questions have been edited.

Since only 1,000 people will get a call out of one million residents, I wanted to provide an opportunity for you to partake in the survey via the internet.

http://www.surveymonkey.com/s/RG9LCPN

This survey closes Jan 30.
If you appreciate urban parks than consider attending the San Jose premiere of The Olmstead Legacy film. March 7 at City Hall. For more info click here:http://tinyurl.com/OlmstedLegacy

Also posted in Parks, Politics | Comments closed

Civil Service Rules

The City of San Jose has adopted Civil Service Rules that state what is and what is not allowed in regards to employment. The City Charter allows for changes to Civil Service Rules by a Council vote, and does not necessarily require a city-wide election.

SECTION 1103. Civil Service Rules; Manner of Adoption.

Civil Service Rules for the Classified Service shall be adopted, and may from time to time be repealed or amended, by ordinance of the Council. Upon adoption, Civil Service Rules shall have the force and effect of law.

The Council may adopt, repeal or amend any Civil Service Rule for the Classified Service, provided it first receives from the Civil Service Commission a report or recommendation with respect to the proposed new Rule, if a new Rule is proposed to be adopted, or with respect to the proposed repeal or amendment of an existing Rule if an existing Rule is proposed to be repealed or amended; provided, however, that if the Civil Service Commission refuses or fails to submit to the Council a report or recommendation on any proposed new Rule, or proposed repeal or amendment of any existing Rule, within ninety (90) days from and after the date the Council requests such a report or recommendation, the Council may adopt such new Rule or repeal or amend such existing Rule, without first receiving a report or recommendation thereon from the Civil Service Commission.

The years ahead for local government will be tough, as property tax revenues will continue to be low and the true costs of pensions are revealed. If layoffs are inevitable, then let’s examine the current system of layoffs by seniority.

The current method means we lose some of the most productive people and create a large age gap if/when we are in the position to hire down the road. Instead, perhaps we should look to see if there is an alternative that might involve employee performance as well as seniority. Maybe only lay off employees who are evaluated as “needing improvement” before laying off productive employees with less seniority. Or if two employees have nearly equal seniority, leave some allowance for merit—such as education, training, evaluations and certifications—to be used in the final determination.

Also, we should explore allowing those that are closer to retirement the ability to choose on their own accord to retire early in a way that would still provide the savings to balance the budget. Employees with more seniority are paid more than those with less seniority, so a change may allow fewer layoffs of city employees that provide services to residents.

I believe the Civil Service Commission, chaired by Bill Brill, business representative for IBEW union Local 425, should review and give their recommendation to the City Council in 90 days per the City Charter.

Thanks to Friends of the San Jose Rose Garden who hosted a great volunteer event on Saturday. Many unpaid volunteers braved the cold to help keep the park looking great. Special thanks to Terry Reilly, Beverly Rose Hopper and Myles Tobin for the heavy lifting.

Click this link for a short video of Saturday’s volunteer event at the San Jose Rose Garden.

Also posted in City Council, Politics | Comments closed

Synchronized Swimming

Last year, the council was faced with cutting the aquatics program down from ten pools to two due to the budget deficit. Stuck between a rock and a hard place the council invoked the “Unique Service Purchase” clause.

4.12.235 Unique services purchases.
The procurement authority may initiate a procurement for unique professional or other services where the procurement authority determines that an unusual or unique situation exists that make the application of the requirements for competitive procurement of a services agreement contrary to the public interest. Any special procurement under this section shall be made with such competition as is practicable under the circumstance. A written determination of the basis for the procurement and for the selection of the particular contractor shall be included by the Procurement authority in the department files.

Simply stated, this allows city staff the flexibility to outsource. In this case, the aquatics program was outsourced to both non-profit and for-profit groups. This simple action allowed the city to open seven additional pools for a total of nine pools instead of two that were budgeted.

At the Dec. 14 council meeting, staff reported back to the council on the results of the aquatics program. Residents gave the program high marks, with 91 percent rating the service as positive. In addition 1,000 more swimmers used the pools this summer over last summer. Staff said that outsourcing of the pools was “seamless.”

I think it is great we were able to give residents services they enjoy but without the traditional cost.

The City continues to cover maintenance and utility costs, however with multi-year contracts I believe we can get most of these costs covered as well, and even extend the swim season. This is a positive example that outsourcing can provide services to residents. This is a positive example that outsourcing can provide services to residents.

Congratulations to Maxim Semiconductor for purchasing a building in North San Jose. They will soon be relocating their 1,200 employees and corporate headquarters to San Jose. The City of San Jose through the Office of Economic Development offered $500,000 in business assistance programs. Luckily the City of San Jose was prudent and has a little money put aside for economic development.

Also posted in Outsourcing, Politics | Comments closed

Tax Base Erosion Night

It is that time of year again, with lobbyists circling City Hall in preparation for the General Plan hearings.

With the leadership of Mayor Reed, modifications to our General Plan (GP) have been reduced to once a year, for the most part. At the GP hearings, applicants make their case as to why current land-use designations should be changed to allow for the applicant to build what they want, regardless of how the land is currently zoned.

These “conversion” requests are typically for land that is industrial/commercial to housing. Or it could be extending the urban growth boundary to allow for more suburban sprawl. By the way, San Jose currently has over 21,000 units of housing approved and entitled on land zoned residential that has not started construction.

With more conversions of our industrial, commercial and retail land, we are pecking away the tax base a little at a time, which narrows our future options down the road.

Either you view San Jose as a dead city with little chance of economic growth (so go ahead and convert each proposal put before you because it doesn’t matter), or you have the view that there is future potential for San Jose to bring more small business and large business. I feel San Jose has not reached it’s potential but will be severely handicapped if we allow death by a thousand cuts when it comes to land use. San Jose will be fighting for a smaller piece of the economic pie in the United States as globalization continues and our national debt reels out of control. San Jose should control it’s destiny by standing firm in not changing land-use designations to housing.

At the budget hearings on Nov. 18, I shared that I would have a very difficult time asking employees for wage concessions if the Council cannot hold the line on the conversion of employment land. Seems only fair: If you are going to ask someone for money to pay your utility bill, don’t leave the furnace on all day when you’re at work. The Council has had to tell residents and employees “no” this fiscal year because of past decisions. I cannot and will not jeopardize more city jobs that provide services with conversions that hurt our future tax base.

In one of my first votes on the City Council, I voted to rezone industrial land to housing. I later wrote about my regrets regarding this vote.

One of the proposed exceptions that the Council denied in May 2008 on a 6-5 vote is back again with a different lobbyist. The same property owner also owns land where the proposed baseball stadium would be located. I met with the property owner representatives who said if the City would rezone this piece of land then they would consider selling the other piece of land to the City for baseball. I believe each rezoning should be judged on its own merits and not tied to a quid pro quo. I wrote about this property the last time it came to Council.

Exceptions to our General Plan (tax base erosion) will be heard Tuesday, Dec. 7, not before 7:15pm. I would be impressed if more than one person, whether it be city employees or San Jose residents, would speak at the Council meeting and simply say, “hold the line—please do not convert our future tax base.”

Congratulations to the Willow Glen Rams winning the CCS Division 2 Football championship over Sequoia of Redwood City. An incredible season that rallied the school and neighborhood. The star quarterback is the son of my classmate and friend from Willow Glen High. Sadly, my friend passed away from cancer several years ago however his son is the spitting image of his father, which makes it a very special victory.

Also posted in City Council, General Plan, Politics, zoning | Comments closed

Budget Planning for 2011-2012

Last Thursday, the council had a study session for San Jose’s 2010-2011 budget. The public meeting received little media attention. Perhaps, since the holidays are near, we only want to hear the good news…and next years budget is far from good. There is no dispute on the data—just the direction we shall choose to balance the budget.
Here is a link to the 88 page presentation given to Council by the budget office. (Click on “2011-12 Organizational & Budget Planning” to view the presentation.)

The Council was challenged by the grim financial data and gave direction to continue with the 10 percent total compensation cuts that was requested last year. This is not an additional 10 percent but rather a request to keep the current 10 percent concession that was already agreed to by some of the labor unions. The 10 percent concession that several of the unions agreed to last year were “one time only,” meaning only for this fiscal year (2010-2011) and not ongoing. The three largest unions did not accept the 10 percent reduction last year and one actually got a raise.

If the Council chose not to ask for 10 percent pay cuts and spare public safety we would layoff two of every five non-sworn positions. So two out of five librarians, attorneys, IT staff, finance, auditors, code enforcement, planning department, public works, department of transportation, economic development, community center staff, etc….This would result in 81 percent of the budget allocated to public safety. If however 10 percent total compensation cuts were achieved then 72 percent of the budget would be allocated to public safety. (Slide 32)

Outsourcing is back on the table as a way to reduce costs and keep other city departments from having more layoffs. Last year we outsourced janitorial services which resulted in a $4 million savings and the facilities are just as clean.

I made several statements from the dais that included:
• not converting employment land to housing
• eliminating discretionary funding of charities with Healthy Neighborhood Venture Funds
• not raising fees so we become uncompetitive with our neighboring cities,
• keep the jobs/revenue team in place for companies locating to San Jose,
• Council should be limited to how many memos (flavor of the day) for new policies they can submit in a year
• rank current staff workload on what is most important (selling Hayes mansion and getting out of golf business)
• allow for union negotiations to be done in public
• instead of closing fire stations or laying off police officers reduce staffing at the slower fire stations to the same staffing levels as our neighboring cities
• finalize a new retirement system for new employees
• new facilities not be opened with full staffing
• outsourcing park maintenance or look at outsourcing by attrition where we hire private contractors as people retire
• look at new revenues once Council makes the hard decisions
• over time look at taxes that have positive environmental results and not only focused on property owners like parcel taxes instead look at solid waste dumping fee and the utility tax (water, electricity & gas)

We are suffering from severe financial duress; however, we do have options, as I have shared above. Perseverance and goodwill are not dependent on budget numbers, therefore “this too shall pass.”

Also posted in City Council, Unions | Comments closed

Arbitrator: Retired Judge or Out-of-Town Labor Lawyer?

At first glance, modifying binding arbitration back in July was not my first choice over new pensions for new employees. I support the Mayor on fiscal issues, so voting in favor of Measure V and giving residents the opportunity to support this measure is consistent with my line of thinking.

In a nutshell, Measure V would put limits on outside arbitrators. During the course of the campaign I have become more and more supportive of this measure. There are two primary reasons why it is important, neither of which are getting much publicity. One, the passage of Measure V will mandate that binding arbitration for public safety unions would be held as public meetings. Public meetings that the taxpayer could attend and see how tax dollars are allocated.

As it stands today, even Councilmembers that you elect are not allowed to attend these meetings.

Second, Measure V would require that the current out-of-town labor lawyer acting as arbitrator be replaced with a retired judge. Most people share the belief that a judge is more fair than a lawyer. Not every judge is perfect, however, I would pick a retired judge instead of an out-of-town labor lawyer to make a final financial decision under binding arbitration.

I have known many of our public safety professionals for more than 30 years. They are good people who do good work. However, the status quo of pay and benefits increasing faster then revenue actually results in less police and less firefighters for residents. The City has a legal obligation to pay pensions and does not have money left over to hire more police or firefighters.

I would suggest moving forward that the critics of Measure V explain the value of how the current closed-door binding arbitration process overseen by an out-of-town labor lawyer is better than Mayor Reed’s suggestions that would control costs and let taxpayers in the room. Instead, those against Measure V are attempting to mislead the voting public by sending out materials that are incorrect and contradictory as reported in a Mercury News article on Sept. 12 and again on Oct. 22.

As a side note, it was announced at the council meeting last week that the city paid out $14.6 million in accrued sick leave to retirees in July. It is a record breaking year that beat last year’s all time record of $11.7 million. Next year the potential sick leave pay out could be as high as $21 million which is equal to this years entire city wide library budget.

Also expected property tax revenues next fiscal year will be approximately $194 million while payments for pensions will be approximately $250 million! Perhaps we all write “reform pensions to hire cops” on our check this year to the Tax Collector or better yet: Vote yes on Measures V & W.

Also posted in Measure V, Measure W, Politics, Unions | Comments closed

Worst Roads, but Great Pensions

Last week, Council dove into a study session about street paving. As you may have heard, San Jose came in last on a national survey on road conditions. This survey was done prior to the $12 million in federal stimulus money that was allocated to San Jose for road paving this summer.

San Jose’s cost to maintain roads is high due to our suburban sprawl. Total lane miles in San Jose is double that of San Francisco, which came in second for worst roads.

San Jose has 2,370 miles of road (60 feet wide) that would stretch from here to Detroit! (Could you imagine if we continued on the notion to build out Coyote Valley and increase our road network plus the sidewalks, sewers, street lights and signalized intersections?) Those 2,370 miles of road are split between 1,570 miles of neighborhood streets and 800 miles of major streets. State and federal grants for street paving (if you get them) typically only apply to the major streets and not the majority of neighborhood 25-mph streets where we live.

Staff presented us with the dilemma that as streets wear down they are more expensive to repair. For example, to “reseal” a street in good condition may cost $35K-$70K per mile, however if a street is in poor condition the price rises to $200K-$800K a mile. Complete rebuilding of a street is the most expensive at approximately $1.8 million per mile! So transportation engineers do their best to with the limited dollars to try and keep streets from falling into poor condition.

Some streets are being left behind since they are so expensive to repair. So, thus a trade off: Do we fix one mile of a terrible street or instead 10 miles of streets that are in fair condition? Well, if you live on those 10 miles of streets it is great; however those on the one mile of terrible street are left behind.

Inevitably, the decision to repair, rebuild, etc., always turns to money. The city has lowered it’s road repair budget at the same time as other department budgets were being trimmed. As the structural budget deficit took hold and the portion of the pie chart for road paving got smaller, other portions of the pie chart, such as pensions, got bigger. One proposal on how to pay for the deferred maintenance backlog (streets only) of $250 million (which may swell to $1 billion by 2020) was an annual parcel tax of approximately $300.

A comparison is that many households pay $480 a year for basic cable TV or $600 for high speed Internet, so paying $300 for streets each year would be just be considered another household expense. The other factoid cited in favor of a parcel tax was that the annual cost for car repair due to poor roads is $700 a year.

Of course this $300 parcel tax was preliminary, and other parcel taxes may arise based on different properties, or a Council decision to charge a big-box store more since their store generates many car trips. Cities alone do not have the ability to raise gas taxes so parcel taxes, sales taxes or utility taxes are the main ways to raise revenue for ongoing expenses. Gas taxes make those who drive on roads pay for them; however some of the biggest culprits for wear and tear on streets—buses, garbage vehicles and commercial delivery trucks—are exempt by state and federal law from paying a fee to cities for the damage they cause.

One of my questions at the study session was: “Since the city council policy exempts affordable housing from paying construction taxes which go towards road paving, how much money have we lost and/or could have had in the coffers for street paving from affordable housing?” Unfortunately, staff did not have the answer readily available. I am aware that the city has lost approximately $80-$90 million for our parks with a similar exemption for affordable housing developers. My back-of-the-envelope calculation is we have lost out on approximately $30 million that could have gone to road maintenance.

I think it is important that we know these things since a council policy has cost implications. If we raise your taxes for road repair but then make exemptions for something else, then maybe the tax should be called an affordable housing tax instead of tax for roads or parks.

Here is a link to the staff presentation on road repair. Click on Pavement Maintenance (Street Paving) Study Session Presentation-October 12, 2010

Also posted in City Council, Politics, Roads | Comments closed

Can We Learn From the Fall of Rome?

The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance. Cicero, 55 BCE

The San Jose convention center was visited by experts on the National Debt last Friday, Sept. 23. This was part of the Fiscal Solutions Tour comprised of both Democrats and Republicans, with budget expertise organized by the Concord Coalition. The speakers former titles included: the Comptroller General of the United States, head the General Accounting Office (GAO), head of the Congressional Budget Office, Public Trustee of the Social Security and Medicare program to name a few.

Unfortunately, the Power Point presentation stopped working after the first few slides, which was a shame since the slides were very informative and gave background information on the enormity of the problem we face. I showed their documentary film IOUSA at City Hall in May 2009 to show parallels with our own budget in San Jose.

The presenters shared some eye-opening items on Friday. One was that there is no Social Security trust fund. No money stashed away in a “lockbox” to pay obligations. Instead, there is a file cabinet in Virginia with a long list of IOU’s, since the government has the spent the money. This year Social Security is paying out more in benefits then it takes in.

Another revelation was that this year we will spend $202 billion just on interest on the national debt, which is more than the wars in Afghanistan and Iraq. By 2019, nearly all federal revenue will go to paying interest on the national debt and entitlement programs like Social Security, Medicare and Medicaid, leaving a sliver for military, food safety, science, etc.. Not mentioned was the sleeping giant of $3-5 trillion in unfunded pensions from local and state governments nationally.

One may hope the federal government will bail out state and local governments from their pension obligations, however, it would require borrowing even more debt from foreign countries or raising income taxes to benefit one group in society instead of other priorities Americans may have. The more the United States borrows from other countries limits our liberty, as you must be nice to your lenders (foreign governments) even if they are wrong.

Whatever level of government, hard decisions must be made or citizens will feel the consequences of punting. When asked, “How we solve this problem?” Fiscal Solutions’ David Walker said: “It depends if elected officials are willing to risk their jobs” … “elected officials don’t get re-elected by raising taxes and cutting spending. Instead they get re-elected for not raising taxes and increasing spending.” The presenters offered solutions ranging from budget reform, defense spending, health care reform and yes raising taxes strategically.

Click on this link to view an online video that briefly lays out the problem and provides their proposed solutions. http://blip.tv/file/4048954

Finally, a big thank you to the San Jose police officers who donated their time Saturday morning for the Willow Glen High School homecoming parade. Thank you Lt. Ta, Sgt. Montonye, Sgt. Moody, Sgt. Lira, Officer Ramirez and Officer Herbs.

Also posted in Fiscal Solutions Tour, Politics | Comments closed

From Last Place to First

As most of you are most likely aware from the front page article in the San Jose Mercury News on August 12, The San Jose Municipal Rose Garden was selected as America’s Best Rose Garden. What an incredible achievement! Congratulations and thanks to all involved including the paid park maintenance city staff and the non paid volunteers.

The rebirth of the Rose Garden could not have been done by only park maintenance staff or only by volunteers. It is the combination of both that allows for this fantastic achievement. And the leadership of Beverly Rose Hopper and Terry Reilly.

Just over three years ago, I walked through the Rose Garden park with numerous concerned neighbors and saw the decline and devastation. I knew then that our City did not have the resources to pay for staff to care for the park, nor would a band-aid approach allow the park to reach its potential. I also knew the City was behind the times with it’s volunteer policy. Instead, I proposed a pilot for outsourcing park maintenance. That caused the unions to assemble and defend the status quo.

Bringing up the topic of outsourcing allowed for the larger message to get out that this park and other parks need attention, especially with our structural budget deficit. Although outsourcing park maintenance, even as a pilot, was not approved in May 2007, I did push for and was successful in having council support amending the City’s volunteer policy in October 2007.

I remember asking several times then-Vice Mayor Dave Cortese to accept my friendly amendments to allow more flexibility in the volunteer policy, including a stipulation that corporations be allowed to have their employees donate time at San Jose parks on their community service days. This change allowed 250 Google employees and 150 Recology employees to volunteer in the Rose Garden this summer, for example.

The Municipal Rose Garden is a city landmark and now a national one. Volunteers include residents of San Jose and people from all of over the county. The volunteers are doers and not talkers, as they enjoy giving back to the larger community. I think they serve as an example of the JFK quote (with a twist): “Ask not what your city government can do for you, but what you can do for the community you call home.”

Municipal governments will continue to shrink as revenues will be constrained as pension costs rise. Therefore—now more then ever—residents could provide small increments of their time improving their local park, trail, traffic medians etc… Waiting on government will be taking longer then ever before.

However, residents may ask a fair question as to why cities do not do more to provide services at a lower cost. As the Wall Street Journal reported recently, San Jose will be saving approximately $4 million a year by outsourcing janitorial. The $4 million in savings was substantial enough to garner national attention and is the trend nationally.

I am very proud to live in a city where doers start with a dead vine and do not give up. As a result of the conviction from the Rose Garden volunteers, the City of San Jose Rose Garden is Number One!

Also posted in Parks, Politics, Unions | Comments closed

Pension Reform: Speak Now or Forever Hold Your Peace

The Rules Committee allowed my memo on Pension Reform to go before the City Council Tuesday, Aug. 3, to be considered as a ballot measure for San Jose voters this November. At the Rules Committee meeting, members of the public were few compared to the number of paid lobbyists that were in the audience.

I have a supplemental memo coming out today which will ask the Council to adopt the language below:

“To provide fiscal stability, control costs and maintain City services to residents, shall the Charter be amended to allow the Council, by ordinance and subject to the requirements of applicable law, to exclude any officer or employee hired on or after the ordinance’s effective date from any retirement plan or benefit of any plan?” (For example, this means we could exclude new employees from the 250% pension match.)

I have been a Councilmember for over three years and pensions have only increased in cost for residents of San Jose. The ability for the Council to have the flexibility and the option to negotiate a 2nd Tier would be a positive step for everyone involved, union members and taxpayers alike. Only through developing a new fair pension for new employees can we get to a point of trying to balance the structural budget deficit. However, during my three-plus years on the Council, discussions of 2nd tier always get postponed. “Kicking the can” is the easy thing to do, but San Jose can no longer pretend that our problems will go away.

Many of the union speakers at the Rules Committee last Wednesday mentioned that there needs to be dialogue, a process and time to discuss 2nd Tier. Actually my proposal does just that since changing the charter means we will still have dialogue and negotiations with the unions as obligated by law. A union lobbyist said Pension Reform would waste money since a second election would be needed once a 2nd Tier was agreed upon. Not so. As stated by the city attorney on Wednesday only one election would be needed since the 2nd Tier would then be implemented by ordinance which only requires a vote of the city council. The cost to the City to have Pension Reform on the ballot now is less expensive then a special election advocated by others.

Another union speaker was critical since my pension reform proposal did not mandate a specific 2nd Tier. This instead gives the Council flexibility in decision making as actuarial studies need to be completed as well as negotiation with our unions. Also, this allows the Council in future years to have the flexibility in adopting changes to a 3rd Tier should city revenues continue to deteriorate.

A letter submitted by a lobbyist for the union talked about needing two to four years to negotiate a 2nd Tier. This would be problematic—we should conclude negotiations within one year. Delay misses the opportunity to stop the bleeding. Another union speaker claimed the city is not hiring when that is not so. The City must hire to replace retiring employees. In fact 35 percent of the workforce is retiring in the next four years and it is important to lock in those cost savings. If we do not, each new employee carries 60 years of fiscal pension liability (30 in their career and 30 in retirement).

With all due respect, I believe the union leadership is missing the point. If we do not provide new pensions for new employees then the alternative will be to lower wages significantly and/or layoff employees. Laying off employees will affect residents. If the pension costs had not soared by $60 million this last year then we would not not be closing fire stations, libraries, postponing police academies and laying off other city workers.

The criticism I have heard from non-union people is that my proposal is not draconian enough and that the pension plans should be blown up. To them I paraphrase Voltaire: “Do not let the perfect be the enemy of the good.” Failing to act now will only lead to more obligations we cannot afford . Otherwise, do nothing and we will have more layoffs. Again, the increase in pension costs of $60 million dollars this year led to the layoff of city employees who provide services.

The ball has been teed up for the public. Speak now or forever hold your peace. Aug. 3 at 3:30pm. No need for a babysitter—City Hall is open to children. Bring a book or some knitting needles or both. If it is your first time to a Council meeting you may find you enjoy watching your city government in action.

The results of last week’s survey on November ballot measures, with 129 respondents, are viewable by clicking this link.

Also posted in City Council, Politics, Unions | Comments closed

Potential City Ballot Measures

On Tuesday, Aug. 3, the City Council will decide on five possible ballot measures that would go before San Jose voters in November. So far, the Council has budgeted money to place two items on the ballot; therefore the council must choose two of the five. However a group known as Baseball San Jose has offered to pay for the cost of putting the Downtown Baseball Stadium question on the ballot, so three ballot measure may go before voters.

Below is each proposal in alphabetical order:

Baseball Stadium
(This will be considered at the Rules Committee on Wednesday, July 28 at 2pm. The Rules Committee would need to support placing this item on the Tuesday, Aug. 3 City Council agenda.)

Ballot Language:
Shall the San Jose Downtown Ballpark and Jobs Measure be approved to authorize, but not require, the use of Redevelopment Agency funds, with no new taxes, to acquire and clear a site for a baseball stadium, fund related off-site improvements, and lease the site for a professional baseball team where the team would pay all on-site construction costs, operation and maintenance costs, generating new tax revenues for City operations?
Binding Arbitration
(This will be considered at the Rules Committee on Wednesday, July 28 at 2pm. The Rules Committee would need to support placing this item on the Tuesday, Aug. 3 City Council agenda.)

Ballot Language:
To provide fiscal stability, control costs, and help maintain the level of services being provided to residents, shall the Charter be amended to require outside arbitrators to base awards to City employees primarily on the City’s ability to pay and to prohibit creation of unfunded liabilities, increasing police and firefighters’ compensation more than the.rate granted to other bargaining units or more than the rate of increase in General Fund
revenues, and granting retroactive benefits?
Tax Medical Cannabis
(Already on the Tuesday, Aug. 3 City Council Agenda.)

Ballot Language:
In order to provide funding for essential City services such as police, fire, emergency response,street maintenance, pothole repair, parks, libraries and youth and senior programs, shall an ordinance be adopted to impose a tax at the rate of 10% of gross receipts on marijuana businesses in San Jose, subject to existing independent financial audits, with all revenue controlled by the city.
Pension Reform
http://www.sanjoseca.gov/district6/documents/7-19-2010PensionReformVoterApprovalMemo.pdf

(This will be considered at the Rules Committee on Wednesday, July 28 at 2pm. The Rules Committee would need to support placing this item on the Tuesday, Aug. 3 City Council agenda.)

My proposal is to change the city charter language so the city can offer new employees some degree of lower pension the taxpayer can afford. Current employees and retirees will continue under the current pension system and will not be affected in anyway. Pension reform includes public safety, non-public safety, city management, RDA and Councilmembers. Official ballot language will be provided by the city attorney.
Sales Tax
(Already on the Tuesday, August 3rd City Council Agenda)

Ballot Language:
In order to provide funding for essential City services such as police, fire, emergency response, street maintenance, pothole repair, parks, libraries, and youth and senior programs, shall an ordinance be adopted to enact a one-quarter percent tax on retail transactions in San Jose, subject to existing independent financial audits, with all revenue controlled by the City?
Rules committee members are:

Chuck.Reed@SanJoseCA.gov
Judy.Chirco@SanJoseCA.gov
Pete.Constant@SanJoseCA.gov
Nancy.Pyle@SanJoseCA.gov
Madison.Nguyen@SanJoseCA.gov

I think it is important that major issues should go before voters to validate Council direction or let the Council know something different.

In addition to the city of San Jose proposed ballot measures, there will be at least two other countywide ballot measures that raise approximately $14 million each. One is from VTA for $10 per vehicle annual fee for road repair. The other is a $29 parcel tax per property by the County of Santa Clara to fund children’s health insurance. Are these items what you would choose to fund with new tax revenue?

Since the City will most likely choose two of the proposed ballot measures (baseball proposal excluded) due to budgetary constraints, which do you believe are most important to be placed on the ballot if any? For me, I believe the most important two are Pension Reform and Taxing Medical Cannabis.

Here is a link to a brief survey on the November Ballot Measures that I will share later on San Jose Inside.

Also posted in City Council, Politics | Comments closed

Pension Reform Now!

My memo below will be discussed, next Wednesday, July 28 at 2pm at the Rules Committee which includes Mayor Reed, Vice-Mayor Judy Chirco, Councilmember Nancy Pyle and Councilmember Pete Constant. This is a public meeting.

Recommendation
Direct City Attorney to prepare legally binding ballot language for a ballot measure to be considered at the August 3, 2010 Council meeting for the November 2010 election allowing residents of San Jose to vote on changing the City charter by removing charter language regarding “minimum benefit” and “contributions/ cost sharing” in regards to pensions (Sections 1504 and 1505). Removing this language would allow the flexibility to negotiate a 2nd Tier pension for new employees whose hiring date is after January 1, 2011. This proposal would not change current legally vested benefits for existing employees.
Background:
Public pensions costs are soaring and forcing our City to reduce essential services to residents. In fiscal year (2009-2010) the cost of pensions was $138 million. In fiscal year 2010-2011 the amount jumped to $200 million. (The $62 million increase is double the citywide Library budget). In fiscal year 2011-2012 that number will grow to $240-250 million ( $240-250 million is approximately the annual Police budget) and could balloon to $350 million by 2015-2016 ($350 million is double the citywide Fire Department budget or more than the annual property tax and sales tax revenues)

The average private sector employer match is 3% for a 401K in the USA. In comparison, the City of San Jose as an employer matches at an 8 to 3 ratio or 250%. Individuals with retirement plans like a 401k, IRA and SEP IRA bear 100% of the investment risk. However San Jose employees do not have this risk and are guaranteed a net return of approximately 8% which means the gross return must hit 9%. The average combined return on the retirement funds for the last 10 years has only been 4.4% thus the taxpayer makes up the difference; this fiscal year alone it was $52 million. Therefore, since the taxpayers are responsible for paying the difference in pensions, I believe that residents should have the right to vote on whether or not they want to continue to pay sums such as $52 million in a single fiscal year.

It is imperative that the 2nd Tier pension be put on the 2010 ballot for the following reasons:

1). The City should give voters the opportunity to vote on the pension system. To not allow the voters the chance to vote on this issue is undemocratic. Some may say that we should just handle this “in house” and create a committee to look into alternatives and/or have closed meetings with the unions to try and negotiate an agreement. Closed door meetings would not be transparent and we do not know how many years it will take to negotiate or if a consensus of any kind can be reached by a committee or negotiations. Additionally, any recommendation that may come out of negotiations or a recommendation by a committee would need to be voted on in a citywide election anyway. We need to take advantage of the November 2010 election to know whether or not the residents of San Jose support a 2nd Tier retirement system for NEW employees. Delay will result in missing out on the numerous “Baby Boomer” retirements that will take place and be filled by new employees.

2). A 2nd Tier provides flexible options. The 2nd Tier may have a 1 to 1 match instead of 8-3 or it may have a 1 to 2 instead of 8-3 or it may be simply a new system like a 401K with a generous match from taxpayers of some reasonable percentage. Actuarial studies must be completed and presented prior to making a final decision. Retirement contributions from new employees and the city shall be put in an escrow account until a new 2nd Tier pension plan has been selected.

3). Reforming the pension system now will allow the city to balance the structural budget deficit and over time hire additional police officers, extend libraries hours and pave more roads in San Jose. If this is not addressed the rapid growth of the pensions will force our city to make additional cuts to essential city services or layoff more employees. Delay of pension reform may force our City into bankruptcy and raise taxes significantly. Even with higher taxes the new revenue is unlikely to keep pace with pension growth. This proposal maintains the benefits for retired and existing employees.

If the City Charter is not changed to allow the option for 2nd Tier system, the City will face continued severe financial duress.The current pension system is absolutely unsustainable and threatens the quality of life for San Joseans. Let the voters vote!

Also posted in Politics, Unions | Comments closed

Prioritizing Services That Touch Residents

Hope your Fourth of July holiday was fantastic. On June 29, prior to the holiday the Council made the final vote for a balanced budget. More than 20 people spoke at the Council meeting and all but one advocated that the Council not outsource janitorial services but rather keep the janitorial staff employed, since they provide an incredibly valuable service. You would have thought janitorial was listed in the city charter by the speakers’ comments.

All but one of the speakers advocating for the janitors were affiliated with a labor union or religious congregation. The religious leaders ranged from Methodist to Lutheran to Jewish to Presbyterian. I understand the brotherhood and sisterhood concept of labor unions uniting to advocate for spending taxpayer money to help another union member. I also understand the calls for social justice from the clergy. However I wonder if the janitor at the church or temple makes approximately $55K a year plus a 250 percent pension match and free lifetime medical (minus co-payments) for themselves plus spouse/partner. My guess is no.

The Council was called, “shameful” and criticized for “picking on the most vulnerable.” There were undertones of racism, since the majority of janitors are not caucasian.

The notion that janitors make the least amount of money is incorrect, as I have stated for months. A recreation leader in our parks and community centers makes in salary only $38,001 and a senior recreation leader makes $54,496. A library clerk makes $50,897 in salary only while a senior janitor makes $54,787 in salary only.

So since all three of these positions come from the same pot of money and around the same dollar amount, then it is a trade-off. If the Council chose to not lay off and outsource the janitors we would have to make those same cuts elsewhere to lay off staff that work in our community centers, or lay off staff that work in our libraries.

I chose and will choose to keep services that actually touch the million-plus residents of San Jose over services that do not add value for our residents. The ability to have a community center or library open is more valuable to our residents then who cleans City Hall. The new janitorial staff will be paid like janitors at Cisco and Apple but possibly more with the city of San Jose’s living wage requirement.

A big thanks you to the Alameda Business Association and Larry Clark for another great Rose, White & Blue Parade on Sunday! Congratulations to Cleveland Ave for winning 1st prize in the parade (three years in a row) for their creative float.

Finally, as an observer early this morning it was quite a sight to see six out of 35 stations working on suppressing the fire at Trace Elementary. Thank you to our Fire Department—fortunately there were no major injuries.

Also posted in Parks, Politics, Unions | Comments closed

Final-Final

The final-final vote for the budget is tomorrow, to enact appropriations. Much work goes on behind the scenes with our budget office. Each time a change is made it is an arduous effort to balance the books and calculate the impact on the budget.

If there is a compensation cut in a private sector, it is simply a reduction off the top of base pay — that is easy to calculate. However, when we have unique requests from labor unions that require municipal code changes or legal interpretations of the city charter, it gets complicated.

Quickly, there is a ripple effect that creates work for the budget office, finance department, City Attorney, retirement department and office of employee relations.

This is why I believe labor negotiations as public meetings would be best, because information can be shared early on and we’ll know the ramifications of different options.

Part of the pain of the budget office is that our city uses 20-year-old financial software. When you are dealing with a $3 billion budget with many different types of funds and unique requests, much of the process becomes manual. This is time consuming and increases the chances of error.

Installing new financial software is no easy task and is at least a $10-15 million line item (Interestingly, $14.3 million is the projected payout this year for accrued sick leave).

When we talk about core services, we may think of sewers and streets. Nonetheless, there is the need to make things work on the back end.

Considering San Jose’s structural deficit, it will be quite a challenge to figure out how to pay for this financial system. Open source software can be looked at as an alternative, but we are talking about managing a complex multibillion dollar budget. So, I am inclined to choose a solution that has a track record.

There are so many needs in San Jose that competing for limited funds and resources has become a trading game. Some will say that public safety, for example, is so important we should spend the reserves to avoid cuts. I acknowledge this argument. I’m open to draining the reserves and then — when the State of California takes more money from cities or the tax revenues dip — we simply start laying off people with a two week notice.

However, it is not a choice I would make. Why spend all the reserves while we still fund charities with $10 million in Healthy Neighborhoods Venture Funds (HNVF)? I mean, if public safety is really so important and people are saying that “people will die” because of the budget cuts this year, why continue to do things that are discretionary with general fund dollars?

The HNVF money is not legally restricted like RDA funds or capital funds. All it takes is six votes to redirect this money.

I am not sure why city employees do not support the HNVF money, to be used for themselves and their colleagues. I think that our employees are worth keeping and worth using the HNVF money to keep them employed.

This might be another disconnect between the city employees and the larger labor union movement that supports the HNVF status quo over their own membership’s employment. We cannot be everything to everyone during tough fiscal times.

Some say we are heading into another financial storm. The Federal Reserve and the federal government still have the foot on the gas. But, the economy is sputtering. We had terrible housing numbers last week, and a weakened consumer spending outlook, thus revising GDP growth down last quarter.

Sovereign debt in Europe and Japan continues to be a worry. Japan is going to limit bond spending which seems like the lifeblood of government. The Fed is saying that they may have no rate hikes utill 2012, in an effort to spur activity as financial conditions have become more volatile as the banking sector in Europe is having issues. Cries for austerity abound regarding our huge national debt, so it is unlikely we’ll get more federal stimulus dollars. The Fed stopped buying more mortgage-backed securities last quarter.

The USA may have Japan-disease, where we have a lost decade of slow growth plus high unemployment. After the early ‘80s recession, the economy in the USA grew at 7 percent and 9 percent five quarters in a row. Last quarter, the economy grew at 2.7 percent barely, which barely kept pace with new entrants into the job market. The government sector is leveraging to the hilt, but the private sector is deleveraging even with ultra-low rates.

Most of the tools have been used by the Fed to boost the economy, and there are not many bullets if there is a double dip recession.

To read more about the “Broken State of America,” check out the cover article of Time magazine this week:
http://www.time.com/time/nation/article/0,8599,1997284,00.html

So, considering all of these macroeconomic factors, would you spend down the reserves (which is a total of 2.5 weeks of payroll) the City of San Jose has on hand? Would you personally spend your own savings down to zero if you had other alternatives?

Come out and enjoy the Rose, White and Blue Parade on July 4th. Sponsored in part by the San Jose Redevelopment Agency and The Alameda Business Association.
http://www.rosewhiteblueparade.com/index.htm

Also posted in City Attorney, Healthy N'Hood Venture Funds, Pierluigi Oliverio, Politics | Comments closed

Drama and Trauma

The two city council meetings held last week regarding the budget and labor negotiations demonstrated the need to make all labor negotiations public. If you are interested, you can click on this link and see for yourself the drama and trauma that took place that still does not have closure. This week’s meeting, June 22, will hopefully close this chapter.

I am and have been a proponent of conducting labor negotiations as a public meeting. Unfortunately, when the vote was taken last year to open up labor talks, the vote was a 9-2 against changing the process with only Councilmember Constant and I voting in favor. The process that exists is broken or to say the least, it is severely flawed. The current process of labor negotiations as private meetings hurts those it is meant to help: the employees and taxpayers.

Employees have no choice but to join their respective labor union and are dependent upon having someone else represent them at the bargaining table. It is up to those labor union representatives to inform their membership about the status and timely updates can be a challenge to a large unions. At the same time, Councilmembers are informed by the Office of Employee Relations (OER). However, councilmembers cannot really update residents of what is happening with labor negotiations and their tax dollars since these meetings are private instead of public. In addition the Council only gets one side of the story.

At both Council meetings last week, we saw the drama unfold of broken promises, innuendo, conspiracy theory, stories of personal financial hardship, co-opting of religious clergy and the reading of prepared statements. Behind the smokescreen of this drama were the real people feeling the pain and getting hurt, the employees and residents of San Jose. Both of these groups had to undergo the trauma of being tossed around in public with no one being able to share the full story. As I said at the meeting, 99 percent of city employees do a great job and are real people not faceless bureaucrats.

These city employees protect our safety, our property, our water, our young people, etc. However when you interject labor unions and secret meetings then it can lead to demonizing city employees when this is not fair. The blame should be on the current process which is maintained by both the labor unions and the city of San Jose management.

The taxpayer ultimately has the most at stake since they are the single largest group in San Jose yet they are the least powerful. The taxpayer has a right to know early on how much we have and what we can afford. Only through this dialogue can there be the opportunity for everyone to be on the same page and understand that if we as a city want more services or the same services we might have to pay more for it. On the other hand, if everyone is on the same page then structural change can be demanded so services are delivered more efficiently.

I am hopeful that the June 22 meeting is peaceful and we accomplish our duties civilly.

On a happier note, I am hosting the raising of the Rainbow flag at City Hall at 1PM, Tuesday, June 22 in celebration of the accomplishments and contributions of the Lesbian Gay Bisexual Transgender (LBGT) community in San Jose.

Also posted in City Council, Politics, Unions | Comments closed

Cannabis, Arizona, Fire, Golf and Google

Monday: Medical Cannabis Outreach Meeting
The first outreach meeting regarding medical cannabis collectives was held Monday night at City Hall. Even though the meeting was held late in the process, it was well attended with over 150 people. There were two main groups present: residents and collective patients. Not one person spoke against compassionate use of medical marijuana in San Jose, however, both groups agreed that the locations should be away from schools, parks, daycare centers, etc. Last October, when I initially brought this issue to the Rules Committee, I advocated that we restrict where collectives can locate and include setbacks from locations like schools, etc.
A gentleman in a wheelchair brought up the point that attorneys’ offices are located next to houses and schools in San Jose and that those attorneys have clients who visit their offices that may be violent criminals, so how come we don’t regulate where attorneys can locate?

City staff proposed a “lottery system” to award a permit for collectives. Not one of the 150 people present supported this idea. Some shared that a lottery system is ludicrous because it sets up an irresponsible process to possibly award collectives that do not follow state law and may not have solid responsible procedures in place.

Tuesday: City Council Meeting
The longest agenda item was the issue about boycotting Arizona because of their illegal immigration law. After several hours of discussion, and testimony, I voted no. I did not make extended comments because I did not think that this matter should have been on the Council agenda. On any given day the other 49 states could pass a law that I/you/we may not agree with. As a city, we do not have the bandwidth to meddle in what other states feel is right for them. This is why we choose where we live. I wrote a blog related to this topic more than two years ago stating my views that you may read here.

Wednesday: Closing of Fire Station Council Policy
I met with the fire chief on the last-minute proposal to close Fire House 7 in this year’s budget. I met with city management a few months ago and asked the question “Did the managers budget include closing any fire houses?” The response back was “no.” They shared, instead, that they were going to move forward with “dynamic deployment,” which would include moving and eliminating fire engines from stations that have two vehicles. I was told that the chief, assistant chief and a member of the city manager’s office would have a follow-up meeting with me. We did and again I was told that no fire house was going to be closed.

Then, on May 28, a management budget memo (MBA#39) came out that said that an elimination of an engine was going to occur. Actually, it’s the closure of Fire House 7. No one from the management office nor the fire department had the gumption to call me; thus my request for an additional meeting.

This budget memo violates the city-wide policy on fire station closures which Mayor Reed, Vice Mayor Chirco and I championed two years ago. The Council policy states that changing the make-up of a fire house—whether it be consolidation, closure or relocation—requires a policy discussion prior to being a budget discussion, and must be accompanied by a community outreach process.

The policy focuses on using data as the basis for changing the structure of our fire houses and ensures that the community in the affected service is notified and part of the process instead of being told after the fact. Closing of fire stations based on data and outreach may occur next fiscal year but not this fiscal year. I wrote about this policy back in September 2008.

Thursday: Neighborhood Services Committee Meeting
We discussed selling the city subsidized Rancho del Pueblo nine-hole golf course. I suggested we sell the entire 30-acre parcel to create a housing/retail village and create 1-2 soccer fields for open space as well. I believe there is higher demand for soccer fields then golf. We would take the money from the land sale and pay off the mortgage for Rancho del Pueblo 100 percent and pay down the mortgage on Los Lagos Golf course by approximately $12 million based on medium density housing. The more density we allow the more money and open space we can get.

Friday: San Jose Municipal Rose Garden
More than 200 Google volunteers came out to paint, mulch, fertilize, rake and deadhead at the Historic Rose Garden Municipal Park. In 2007, I pushed for a policy that would allow volunteers from private companies to work in our parks when their respective companies have a community service day. I remember asking again and again for the council to allow this change and the persistence paid off. None of the Google employees were interested in switching careers but they thought the park was a real gem. I wrote about this policy change 2.5 years ago.

Please vote for our San Jose Rose Garden Park to be considered America’s Best Rose Garden.

Also posted in City Council, Medical Marijuana, Parks | Comments closed

Support Our Mayor

It is the City of San Jose’s process that City Manager Debra Figone puts forth a budget proposal in May. Then, after that is released, councilmembers make their budget proposals to Mayor Chuck Reed.

When the Councilmembers make written suggestions of their “budget wants,” they also need to include what funding source within the city will be affected (some written suggestions from councilmembers are done in collaboration with labor unions).

Then, the Mayor takes into consideration the City Manager’s budget proposal and the Councilmember’s suggestions, and comes up with a final budget. Of course, a mayor could put together their own budget without this input, but it is customary that the mayor takes other perspectives into consideration.

As a result, Mayor Reed’s budget message was released on Friday.

Every San Jose mayor must put forth a balanced budget to be voted on by the City Council. The mayor is one of 11 votes. So, just like any agenda item that comes before the Council, six votes are needed to pass or deny the item at hand.

Mayor Reed’s current budget proposal does some delicate balancing of top priorities using the limited funds we have. For some, there may be nothing to like because it is such a thin budget. However, what are the alternatives? There is no other proposal that has this level of detail, accuracy or is this candid with the challenges we face as a city.

We know both from scientific surveys done by the city and by my non-scientific web surveys that San Jose residents want to see concessions from city employees rather then cutting services.
There has been a lot of talk about 10 percent concessions.

Anything less than a 10 percent concession will result in more layoffs and therefore more service cuts to residents. Where we end up is a mystery. Still, there is little time left. What is done or not done prior to passing the current budget may implode any chance for future revenue opportunities in November.

The council may vote to drain all of the reserves and punt a portion of the problem down a short road. I do not support that option.

San Jose has some the smallest reserves when compared to other California cities. San Jose has a 3 percent reserve that only covers 2.5 weeks of payroll. Los Angeles has a 5 percent reserve, San Diego and Anaheim have a 7 percent reserve, and Long Beach has a 10 percent reserve.

I invite everyone to read Mayor Reed’s budget message if you have a stake in San Jose. It is imperative for people to understand the challenges before all of us.

Here is a link to the Mayor’s official budget message.

Here is a link to my “Budget Trade-Offs” survey which includes with over 1,000 participants.

Here is a link to my written budget proposal to the Mayor. It suggests reducing items not in the city charter and instead funding core services like police and libraries.

If people support the Mayor, I ask them to please send an email to the entire San Jose city council by clicking on this link.

The public hearing on this budget is June 14 at 7pm, and will go until late. The vote on the Mayor’s budget is June 15 at approximately 3pm.

Also posted in Chuck Reed, Debra Figone, Pierluigi Oliverio, Politics | Comments closed

2010 Budget Trade-Offs Survey Results

Hello Readers,

As you may know, I created a budget web survey which I shared with you on May 10. The survey was open to everyone and closed yesterday afternoon. More than 1,000 people participated with more than 400 written comments.

Thank you for participating.

Here is a link to the results:

2010 Budget Trade-Offs Survey Results.

Enjoy the balance of your three day weekend while being mindful of our fallen soldiers for whom this holiday was created.

Also posted in Politics | Comments closed

Walk in Their Shoes

The Good News: The City has a counter offer from seven out of 11 unions to take a temporary reduction in compensation (by paying more of their pension contribution temporarily on a pre-tax basis). The Not So Good News: The offer is equivalent to $14.6 million of the $118 million deficit, thus layoffs and service cuts are inevitable.

The “Not So Good News” reminds me of what Bob Brownstein said at the meeting I attended about the budget deficit hosted by the labor unions last month: “Layoffs are unavoidable since the deficit is so large.”

First, I want to thank those unions that made a counter offer to the Council direction. The Council directed the city manager to ask for a 5 percent ongoing pay/compensation reduction and another 5 percent in one-time reductions for a total of 10 percent. Although the offer from the unions is only a temporary reduction and is less then 10 percent, it is still an offer which should be respected.

I think it is important to look at this current situation from the union’s point of view. Unions have their own internal power structure. There is the union business agent and other hierarchy that need to satisfy their membership while at the same time managing the unions overarching goals.

The membership is divided within a union; there are those would wish to not be represented by the union but they have no choice. Other union members object to the larger policies the union hierarchy may support and these policies may have nothing to do with the workers that are represented. Beyond that, there is more division between union members that have seniority and those who are new on the job.

I think it is an extreme challenge to be a union boss at this time. You have public opinion that has plummeted in viewing labor unions more negative then positive; falling union membership in this country to approximately 12 percent (or in other words 88 percent of Americans are not in a union), government revenues declining, residents resistant to tax increases and a membership body that is divided and oftentimes upset.

With this said, I think it is a big deal that labor unions made the city of San Jose a counter offer. I believe the union leadership has taken a lot of punches internally just for making a concession.

The concessions offered (although thoughtful) are not enough and the City will still have significant layoffs and service cuts to residents of San Jose. One-time cuts push the problem out to future years as past city budgets have done. Pushing off discussions regarding new pension benefits for new employees is problematic. Also, draining reserves at a time when we see falling property valuations in Santa Clara County which will result in lower property tax revenue for cities, instability of the economy, our “pick-pocket” state legislature that constantly takes money from cities are all reasons why draining the economic uncertainty reserve now as suggested by the unions is risky.

If concessions are not easily understood by the general public, then the public may continue to distrust both unions and city government (Another reason we need to have these negotiations held as public meetings). This distrust may not allow for any potential increases in taxes that may have merit for city services. For example the city of Campbell raised their sales tax to pay for city services. San Jose may indeed look at a November ballot measure to raise taxes like Campbell.

Therefore, I would encourage discussions at the negotiation table to see where the gap can be bridged between the Council’s goal of $49 million in concessions from these seven unions and the present offer of $14.6 million in temporary savings.

On a separate and happier note, hats off to the Willow Glen High school varsity baseball team and Coach Mike Reilly with an incredible record of 27 consecutive wins.

The 2010 San Jose Budget Trade-Offs Survey closes this week.

Also posted in Politics, Unions | Comments closed

Survey: Budget Deficit Tradeoffs

This year, the San Jose City Council is forced to make drastic cuts. Unfortunately, the city of San Jose has had a deficit for the last decade even before the Great Recession. In fact, even without the recession, San Jose’s financial obligations are significantly higher then revenues coming into the city.

As a result current elected officials are left with trade offs often having to pit necessary services against each other. This year the deficit is $118 million. This is more then the entire library, transportation, planning, code enforcement, information technology, city attorney and public works departments combined.

The purpose of the survey is to gauge your thoughts about what means the most to you knowing that difficult decisions are going to be made and for you to share your thoughts on how the city can save and make money.

For example, there are alternative cost savings ideas that I support like second-tier pensions for new employees the taxpayer can afford, selling the Hayes Mansion, selling one of three golf courses, requiring affordable housing to pay property taxes, outsourcing cleaning/maintenance to save money, capping accrued sick leave payouts, to name a few. These will take longer to implement, however. If our City would have considered these items when I first discussed them, we would benefit from the cost-savings today.

This survey covers choices that must be made by June 4. The Council and all non-union personnel have taken a 10 percent pay cut and have requested that all of the 11 employee labor unions do the same so we can bypass massive layoffs—thus we would be able to provide expected services to residents. A 10 percent pay cut from all employees will help; however we would still be left with an approximate $60 million deficit.

The survey closes May 30 at noon. Survey results will be published on May 31 on SanJoseInside.com

CLICK HERE TO TAKE THE SAN JOSE CITY BUDGET SURVEY.

Also posted in City Council, Politics, Unions | Comments closed

The Center of our City Center

Last week I attended evening budget meetings in Districts 3 and 5. The center of our city (District 3) had a high turnout from residents who find great value in community centers. Particularly, the Gardner and Washington Community Centers. Both facilities provide a place to go and where residents can be positively impacted. Classmates and friends of mine from Willow Glen High grew up in the Gardner area, formerly known as “Barrio Horseshoe.” It was a problematic neighborhood with many gang issues.

My friends in Gardner managed to stay out of the gangs because their parents would physically discipline them if they hung out with people involved in gangs, and kept them busy with chores and work. David Pandori and Cindy Chavez both worked hard to make improvements in the Gardner neighborhood and should be complimented for turning that neighborhood around with the help of passionate residents like Rudy Martinez. Also, praise to my colleague Sam Liccardo for continuing the Pandori/Chavez legacy in Gardner.

The other facility is the Washington Youth Center located in the neighborhood around Washington Elementary and Sacred Heart church. This is another area that has been dealing with gangs for decades. The Redevelopment Agency funded the construction of the Washington Youth Center and the adjacent library along with physical improvements to Washington Elementary. However the general fund is responsible for the day-to-day expenses. Many came to tell their stories of what these facilities meant to them. Some stories brought people to tears as they had family tragedies but also success stories of their children.

Some attendees came from other cities to advocate for our Therapeutic Services program that enables kids in wheelchairs to participate in sports like basketball. They come from other cities like Cupertino and Monterey since surrounding cities stopped offering these services.

There were those who asked, “Why did we ignore the structural deficit all these years?”

Many expressed their opinion that public safety unions should accept wage cuts to save city services and binding arbitration was unfair. Pastor Sonny Lara asked, “Why are people so generous with money for tragedies in other countries but we do not donate to our own local community?” My favorite quote of the night: “We need to stop electing politicians that promise us everything!”

If there was one theme in the District 3 budget meeting it was to keep community centers open. It was stressed by many that community centers and libraries save lives in certain neighborhoods and that these facilities act differently than in Almaden, Cambrian, Evergreen, Rose Garden and Willow Glen. Many felt that community centers and libraries should be open more hours in neighborhoods that have higher needs, which could be determined by crime rate, poverty rate, etc..

I was asked afterwards by several young people who were good role models if would I support their specific community centers over others. I said, “The easy answer is to tell you yes and then walk out the door and vote no.” However, I continued, “the idea of, should some neighborhoods get more services then other neighborhoods is worth debate.” I then asked the youth if they cared who cleans City Hall or would prefer that their community center stay open. They chose the community center.

I believe we should maximize cost savings in areas of our city that do not directly touch residents before cutting services that impact residents. Otherwise we are saying, “Sorry young people, the status quo on cleaning city hall is sacred and better then providing you services that would directly impact your future.” If you do not like this trade off of cleaning staff versus community center employee, then how about community center employee versus librarian or community center employee versus a police officer? Take your pick. Side note: Laying off new police officers is a double loss since we lose the investment/cost to recruit, test, background, academy, field train the new officer.

But let’s get back to the debate on providing more services to certain neighborhoods and less to other neighborhoods. I would acknowledge that higher needs exist in certain neighborhoods and that prevention is less costly than the worst-case scenario of incarceration. There is a disconnect between costs and responsibilities of the city and final costs that may end up on the County or State, but there is also limited sharing of revenue to achieve these goals. On the other hand, I do not believe every person in a certain neighborhood or zip code is affluent.

Within each neighborhood perceived to be upper-middle income, there are those who rent, have a mortgage they are struggling to pay, long- term unemployed, a single mom with kids, seniors on a fixed income, disabled veterans, etc. I assume these residents and specifically youth would want to have the opportunity to read a book or partake in an activity at a community center.

In addition these perceived upper-middle income neighborhoods pay higher property taxes and may feel that they should at least have equal neighborhood services. Personally, I think each neighborhood should get equal infrastructure like sewers, streets, sidewalks and streetlights. Equity in parks is more difficult because of the build-out of nearly all open space and the cost to procure it at today’s prices. (Such a tragedy that we lost out on approximately $90 million in park fees from exempting affordable housing from this fee.) When it comes to what amount of neighborhood services for each zip code, I am open for debate and would like to hear your views.

Is it fair to provide more service to specific neighborhoods? Is that Marxist? “Each according to his abilities to each according to his needs. Should government be neutral and provide exactly the same to all areas?

When people buy a more expensive home does that mean something? People choose to buy or rent in areas based on surrounding amenities and pay a price determined by other property owners and renters. Do we let that be the barometer?

Also posted in Parks, Politics, RDA, Unions | Comments closed

A Dollar Borrowed is a Dollar Earned

Last week, I attended budget meetings in council districts 9 and 10 as well as the labor unions’ budget meeting at the Tully library. The people that attended this meeting were mostly union members and city council staff. It was admitted at the meeting that significant layoffs were inevitable since the deficit is enormous.

Ideas were presented on what money-saving measures could be implemented and what new sources of revenue could be found to balance the $118 million budget gap. Ideas ranged from replacing natural lawns in parks with artificial turf (lower ongoing maintenance costs, but more costly upfront) to turning down the air conditioning at city hall during the summer. Others included putting banner ads on the city website for advertising revenue and charging owners of vacant property a fee/fine since they do not have a tenant.

Although many “creative” ideas were mentioned, none of them seemed to really tackle or help offset our deficit of $118 million—nor did the suggestions even get close to $1 million. Other thoughts were a “crash tax.” For example, if you were to get into a car accident and police or fire truck showed up, then you would pay $500 to $2,000, since you used city services. Another idea would have the city attorney sue code enforcement violators for fines owed rather then placing liens on their property as we do today.

There was a proposal advocating outsourcing. Really?! This concept would outsource the workers compensation program to a third party since it would be cheaper and faster then if the city continues to run it. Interesting that it makes sense for this program but not outsourcing city hall janitorial to keep swimming pools open!?

The major theme at the meetings, however, was about borrowing more money. There was a discussion advocating pension obligation bonds (POBs), which is an arbitrage scheme where the city borrows tens of millions of dollars in the bond market, and then we give that money to the city retirement funds, hoping the retirement board investment strategy earns more money than the city pays for its bonds. If the retirement fund does make more money than we owe the bond holders (and the associated investment fees), then the city can spend the difference. However if the investment return is lower than the city’s cost, then city loses even more money. Similar to a cash advance on a credit card and then investing the cash advance amount in the stock market and hoping that the stock will have a higher return then the credit card interest rate. Also, by issuing POB’s the pension obligation, which can vary over time due to investment returns, becomes a hard liability in the sense that debt service is fixed for 30 plus years.

Probably, the «best» idea, was to borrow money by taking out tens of millions of dollars in one-year notes/commercial paper to pay for ongoing city services. Then, when these notes come do in 2011, we would issue more notes to cover the original 2010 notes. When the 2011 notes come do in 2012, we would issue more notes again for 2013 and so on or until city tax revenue came back.

First, the revenues will not come back to pay for existing city services since pension obligations as a percentage of the general fund will continue to grow faster than revenue coming into city coffers. Second, this bright idea is like a consumer who charges up one credit card and then gets another credit card to pay off the previous one and so on. Issuing commercial paper to cover ongoing operations would hurt our bond rating and banks that provide San Jose with Letters of Credit will look at the city as irresponsible. I cannot recommend this type of borrowing/financing for city services as it passes on the problem to another eneration. We are partly suffering now because of the lack of tough decisions by previous elected officials at all levels of government.

“We should avoid ungenerously throwing upon posterity the burdens that we ourselves ought to bear.»—George Washington

Also posted in City Council, Politics, Unions | Comments closed

Here Come the Cuts

The City Manager will release the list of proposed cuts to balance the city budget today (March 29). These cuts are based on no concessions from any of the labor unions nor savings gained through outsourcing of janitorial services (among others) to save money.

Money saved from outsourcing could help pay for library hours or the aquatics program, for example. The question of concessions has been out there for months and could be included in the budget. Agreement would need to be reached in early April since layoff notices would start going out April 19. If concessions are made then some of these cuts could be avoided but in lieu of an agreement in hand here are some of the proposed/likely cuts.

As it stands now, 802 positions would be eliminated, of which 656 are filled positions, which closes the deficit of $118.2 million. In addition, there were services that were funded last year with one-time funds ($7,476,000), such as library hours, community centers and the SJPD horse-mounted unit, which will be going away as well, accounting for 77 filled positions.

Library:
Eliminate 104 positions to save $7.4 million in 2010-2011 and $7.9 million in 2011-2012. Neighborhood branch libraries would be open three days a week and the MLK Main library would reduce hours 12 percent. Delay opening of new Seven Trees and new Bascom libraries saves $2.3 million for library staffing. Does not include community center staffing costs.

Parks, Recreation & Neighborhood Services:
Eliminate 38 positions to save $4.3 million in 2010-2011 and $5 million in 2011-2012. Close smaller community centers.
Eliminate 12 positions, saving $836,000 in 2010-2011 and $854,000 in 2011-2012. Reduce maintenance staffing at parks; restrooms open only on weekends except in summer. Eliminate 10 park rangers, saving $634,000 in 2010-2011 and $848,000 in 2011-2012. Eliminate 24 positions, saving $630,000 in 2010-2011 and $637,000 in 2011-2012. Reduces aquatic program to only 2 pools in San Jose. Eliminate two positions in Code Enforcement, saving $302,000 in 2010-2011 and $323,000 in in 2011-2012.

Fire:
Eliminate 90 positions (88 are filled), saving $12 million in 2010-2011. 2011-2012 costs determined through binding arbitration. Reduce/suspend fire apparatus and fire fighters at station 30 Auzerais, Station 33 Communications Hill, Station 34 Las Plumas, Station 35 Poughkeepsie, Station 3 Martha Street and one other station yet to be identified.

Police:
Eliminate 160 positions (153 are filled), saving $25.5 in 2010-2011. 2011-2012 costs determined through binding arbitration. Reduce police patrols; eliminate funding for new officers; reduce Metro Unit; reduce Investigations unit; reduce Downtown services unit; delay opening of Police Substation; reduce Financial Crimes unit. Reduce the Crossing Guard program by 8.3 positions to save $354,000 in 2010-2011

Transportation:
Eliminate 12 positions for capital projects, including transit and bike/pedestrian projects. Saves $1.4 million in 2010-2011 and $1.6 million in 2011-2012. Eliminate 9 positions for Neighborhood Traffic Calming. No more traffic studies and no implementation of traffic calming tools. Saves $921,000 in 2010-2011 and $999,000 in 2011-2012. Eliminate five positions for residential street sealing. Saves $375,000 in 2010-2011 and $415,000 in 2011-2012.

Convention Center:
Eliminate 25 positions to save $1.9 million 2010-2011 and $2 million in 2011-2012.

This list is not comprehensive and may/will fluctuate based on final Council adoption of the budget in June.

Also posted in Parks, Police, Unions | Comments closed

3%—100%? 250%!

Monday: No Impact Man Film at City Hall
Nearly 300 San Jose residents attended to watch this documentary, which portrays a family that adopts environmentally friendly choices over the course of a year. For example, they bike instead of driving, buy only locally produced food and give up their television. The main point of the evening was that we do not have to wait for government to mandate behaviors that help the environment but that collectively we as residents can choose to compost, use less electricity, bike vs. drive today, etc…
A reporter from the San Francisco Examiner attended and wrote about the event. Read the report here.

Tuesday: City Council Meeting
Council waived the business license fee for the first 1,000 business under 35 employees retroactive to Jan 1,2010. Some on the Council commented that it was symbolic and would not create jobs. The Council does not create jobs; private individuals do. If the Council wants to do something symbolic lets get rid of the Labor Peace regulation and allow Starbucks to open at city hall as planned. Nearly five years and still empty.

During public comment on the Mayor’s Budget message, a lobbyist from the union chided the Council for even thinking about 2nd Tier benefits that the taxpayer can afford since it would be unfair to have people working side by side who have different retirement benefits. The next non lobbyist speaker stated that people in private sector are compensated differently from each other today and they survive. The current pension system is unsustainable and must be changed for new employees.

A couple of SJI readers asked last week how retirement works under the city charter. Here is the response to that question:
Each employee puts $3 and the city puts an additional $8 into the retirement fund. On top of the over 200 percent match, the city guarantees an 8 percent net rate of return, but the fund needs to gross 9 percent to cover investment fees. (Average rate of return the last 10 years is 4.4 percent) If the retirement portfolio (stocks, bonds, real estate,etc.) does not return 8-9 percent, then the taxpayer covers the difference.

Any changes to the current system requires a vote of San Jose residents. As we hopefully implement 2nd tier benefits I would suggest an option for new employees of a one-to-one dollar match up to the federal 401K limit of $16,500 and no guaranteed 8 percent return. This way the retirement funds will continue to get funded by new employees much like social security is funded by younger workers. The newer employees will draw less benefits but then we will not have to close more libraries or layoff more police in future years.

A dollar-for-dollar match (100 percent) is extremely generous in comparison to the average 3 percent match of private employers to 401K’s. If there are specific positions in our city that are tough to recruit then raise the entry level salary since young workers want more money up front to buy a home or fancy car. Same time if there are positions with many qualified applicants then those entry level salaries should be frozen indefinitely or lowered.
Wednesday: Grand Boulevard Committee, Member
Attended meeting at SamTrans in San Carlos. The purpose of this committee is to provide a venue for cities and transit agencies from South San Francisco to San Jose to plan transit-oriented developments all the way up and down the El Camino Real. The thought is through density, the El Camino will gain the improvements to add large sidewalks and pedestrian friendly accoutrement’s the entire way creating a Grand Boulevard.
Thursday: Public Safety Committee, Member
The committee received a verbal report from staff on why hiring retired San Jose Police Department (SJPD) officers is problematic. Staff response seems odd. We have many qualified retired SJPD in our area that it seems silly not to hire them to do background checks for new recruits instead of pulling police officers off patrol to do this work. But then again we have postponed the police academy indefinitely yet we fund a community center in Los Gatos for $80K out the $11 million in tobacco funds that goes towards charities.
Friday: Diridon Joint Policy Advisory Board, Member
First meeting of the Diridon Joint Policy Advisory Board whose goal is to create a Grand Central Station of the West by collaborating with state, federal, transit districts, adjacent residents and business owners over the next 10-20 years. We elected Mayor Reed as the Chair.

Click this link and vote for ultra-high broadband networks from Google for San Jose.

Also posted in City Council, Politics | Comments closed

What Would Cesar Chavez Do?

Below are a few observations from last week.

Monday: Council study session on Airport
Overwhelming majority of Council thought outsourcing of janitorial to save $3 million was a bad idea so it looks like we will lay people off and consider getting rid of the night time curfew in the future.

Monday Night: General Plan 2040 Task Force Meeting
Although the General Plan board members were informed that the City’s budget problems are partially due to most of our land being dedicated to housing instead of jobs, the Task Force voted in favor of adding 300,000 people with a 14-11 vote. The two options were 200,000 or 300,000 new residents. Several task force members shared that they voted no because they wanted to see higher growth of 500,000 more residents to San Jose! I voted for the option that added 200,000 people by 2040.

Tuesday: Council Meeting
After 18 months of staff and paid consultant “research” regarding my Sept. 18, 2008 memo proposing that developers of affordable housing projects be required to pay park fees, as market-rate developers are required to, the question finally came to Council. I believe that people of lower income are deserving of 100 percent park fees/land dedicated, the Council decided to support the Housing Department’s compromise that developers pay only 50 percent. To date, the City of San Jose has lost approximately $90 million in park fees from developers because of this park exemption.

Are you familiar with the term, “What Would Jesus Do?” Well I wonder as we come up on Caesar Chavez Day, “What would Caesar Chavez do” if he was alive and on the Council. Considering that affordable housing provides for people of lower incomes and is often located in areas that do not have parks, would he vote for equity when it comes to parks in San Jose for all people?

The next agenda item on the council agenda that day was the Habitat Conservation Plan where it seemed that the Council had more sympathy for the checker spot butterfly then parks for people of all income levels.

Wednesday: Visit Medicinal Marijuana Collective in Oakland
One collective is on target to write a check to Oakland for $360,000 in city taxes and another check to the State of California for nearly $2 million in sales tax of which approximately $200,000 will come back to Oakland; therefore Oakland will be receiving approximately a half a million dollars from one legal medical collective that employs 80 people with an average hourly pay of $43.

Thursday Night: Neighborhood Association Meeting
I talked about the budget and announced to the audience that the City would be suspending the $750K aquatics program for the 2010-2011 city-wide. I shared that the City could restore the entire program if we chose different ways to do city services, like outsourcing janitorial services at City Hall for example. There were many in the audience that felt that they did not care who cleaned city hall but they would rather have a summer aquatics program for youth or a library open.

Friday Morning: American Leadership Forum-panel discussion titled, “A new recipe for regional job growth.”
Panel discussion of private sector and labor spoke to how the region can create jobs going forward. A business person asked the labor panelist, “What if public employees would take less in pensions to help balance the budget and avoid layoffs? Response from labor panelist was that, “Most of the deficit in San Jose is not pensions but debt service on City Hall.”

Actually, the debt service on City Hall is $24 million of which $17.1 million is from the general fund out of a $116.2 million general fund deficit. $52.9 million is the amount the general fund must cover this year in increased pension contributions since the taxpayer must cover any losses in the pension funds. The $52.9 million to cover pension losses is only a portion of the total amount devoted to pensions this year which is $200.2 million.
Looking back in history on 5/14/02 the only votes against new city hall was Linda LeZotte and Chuck Reed.

Also posted in Parks, Politics | Comments closed

When Times Get Tough Just Borrow More Money

Mayor Reed shared a candid and honest view of city revenues and expenses at the State of the City Breakfast last week. (Personally, I miss the State of the City speeches in the evening as it led to dinner after the speech and spending money Downtown.)

As we already know the City is walking the plank, with the sharks swimming below in the ocean (sharks = bankruptcy) and a sword wielding pirate (pirate = hard choices) is forcing us to walk down the plank off the ship. Walking back up the plank in not an option unless tough decisions are made now. However it seems that another alternative being heard more and more at city hall is borrowing.

This week the council will vote on an RDA budget that proposes to borrow $10 million from the Park Trust Fund, Ice Center and Water Pollution Control Plant to be repaid in approximately six years. Six years of risk. What if there is a major repair needed at the Water Pollution Control Plant or the Ice Center?

Six years of not being able to make a strategic purchase of property for a park or trail connection. The Park Trust Fund comes from fees paid by housing developers who build market rate housing (affordable housing is exempt from paying park fees). In turn, they want to see their money spent on what it was intended…parks! Actually if we do not spend Park Trust Fund money within a certain amount of time the city must return the money.

The Library Parcel Tax reserves were considered for borrowing but spared since it would kill the chance of getting the voters to continue the tax in 2012. (A point I brought up at the Neighborhood Services Committee.) The alternative to borrowing this $10 million would be to borrow this amount from the Housing Department as allowed by the State Legislature, which I support.

Borrowing of these funds today limits the city’s options tomorrow when the state will grab more money from the city. If we are forced to borrow then let’s do it to maintain core services like police and libraries, not more affordable housing, most of which does not pay property tax.

The City will also be issuing $25 million in commercial paper to pay a portion of the State’s raid of San Jose RDA. Commercial paper is the equivalent of a home equity line that must be paid back. The collateral for the $25 million in commercial paper is our beautiful California Theater, home of San Jose Opera and Symphony Silicon Valley. Again the other option would be to borrow this money from the Housing Department instead of borrowing more on our equity line. Borrowing in both cases is due to the State Legislature taking $75 million away from San Jose RDA funds.

At the budget study session last week a union lobbyist touted the idea of risky pension obligation bonds. Pension Obligation Bonds (more borrowing) are used to fund the unfunded liability of pensions, so as to lessen the large amounts coming out of the general fund in future years when there will be losses. This year $38 million is being transferred from the general fund to cover the pension investment losses which is equivalent to over 200 police officers or staffing for 17 fire stations or paving 24 miles of road. This arbitrage scheme would have the city issue taxable bonds at say 6 percent and then take that money and invest it with the city Retirement Funds. The hope is that the city Retirement Funds would have a greater rate of return than the 6 percent we would have to pay the bondholders. In the last 10 years the average rate of return for city Retirement Funds has been 4.4 percent. (While doing my taxes on Valentines Day I noticed my own mutual funds had returned 3.5% percent over 10 years.)

If the Retirement Fund investments do not perform over time then we could lose more money or possibly break even or make a higher return. Positive investment returns would be restricted to paying off future retirement liability. I think outside of the risk, Pension Obligation Bonds may give the council a reason to not seek second tier retirement benefits the taxpayer can afford for new employees.

The other idea suggested by the union lobbyist was bonding construction and conveyance tax (C&C) funds so that we could spend more now so cuts do not have to be as deep. There again you have to gamble on the future tax receipts and the total amount of C&C funds will shrink since you have to pay the costs associated with bonds. However this borrowing would allow the Council to avoid the question of outsourcing.

It is just another day in local government. Perhaps one way to raise money for the city is to sell bumper stickers that read, “Why do today what you can put off ‘till tomorrow?”

Also posted in Politics, RDA | Comments closed

No Soup For You! No Park For You!

Last week the Council tackled two agenda items related to parks. One was to apply for a state grant. There is $184 million up for grabs for the entire state of California to be spent on city parks. California has 36 million people and San Jose has one million. If San Jose were to get 1/36th of those state funds, that would be $5 million.

Unfortunately, San Jose will not get any special consideration for our large population since the grant is focusing on low-income communities. Even our best park projects may not fare well due to our higher income levels citywide compared to other areas of the state. The wish list San Jose park staff submitted is for $55 million of park and trail projects.

I know the chance of state money for parks may sound exciting, but really it is sad commentary since the current council policy exempts affordable housing from paying park fees which has resulted in $70-90 million dollar loss to the city for parks. $70-90 million that could have purchased open space and trails so that all residents have access to a healthy community. I do not support this inequitable policy that makes us beg for a small piece of the pie when our own council policy made us lose the entire pie.

The other item was the city postponing the opening of 11 parks city- wide because there is no money to fund operations and maintenance. Residents came and spoke and asked: “Why doesn’t the city outsource park maintenance, which would cost less money?” Or “Why not let volunteers do all the maintenance.” Well, the council voted on outsourcing a few months back when a new stricter competition policy was passed by 7-4 vote that killed any chance for outsourcing ( I joined the Mayor in voting no). San Jose residents do not care who maintains a park just that it is maintained.

We have had great success with the Friends of the San Jose Rose Garden due to Terry Reilly’s commitment to organizing volunteers to help maintain all the roses at the park. The volunteers help augment the park maintenance and do not replace park maintenance personnel. It is a partnership between volunteers and city park staff. The current council policy does not allow for volunteers to operate lawn mowers, for example, which is a big part of park maintenance at parks city wide.

Another option I have voiced is allowing housing developers who deliver a turnkey park to maintain the new park for three years at their cost. In return, however, they should be allowed to pay the market rate and be able to hire and fire the private park maintenance service as they wish. This would save the city money, provide open space to residents and ensure new parks are defect free. Unfortunately this proposal is dead on arrival since the majority of the council would not support it.

So what we are seeing with the city ripping out plant landscaping in traffic medians and not opening parks since we do not have funds to maintain either of them, is just a small appetizer when it comes to plugging a $100 million dollar budget deficit. Remember the residents are second in this city after others get their cut. Hold on to your hats and definitely your wallets as it is going to get much worse.

Also posted in Outsourcing, Parks | Comments closed

Budget Prioritization Survey 2010 Results

The city of San Jose recently completed a scientific poll of 902 residents. This poll cost $50,000. As I mentioned in a prior blog, I took many of the poll questions and posted them on the District 6 website (the district I represent) and here, on San Jose Inside. I entered the questions and three of my own into a web-based survey solution which costs $20 a year. The survey closed yesterday with 839 completing the 15 page survey (973 respondents completed part of the survey). Unlike past surveys where District 6 residents were 90 percent of the respondents, only 43.9 percent of the respondents were from District 6 this time.

The city’s poll found that:
48% would support a half cent sales tax increase.
53% of likely voters would support a 1/4 cent sales tax increase.

The web survey poll showed:
54.4% of respondents would support a 1/2 cent sales tax increase.
51.2% would support a 1/4 cent sales tax.

When I removed all non San Jose respondents the numbers were 52.1% would support a 1/2 cent sales tax increase and 51.3% would support a 1/4 cent sales tax increase. A web survey does not control demographics and likely voters.

The City’s poll found that a majority of residents were supportive to some of the proposed cuts:
Delay opening the South SJ Police Substation 67%
Reducing public information hours at police station 66%
Reducing police patrolling downtown on horseback 61%
Reducing park rangers at regional parks 61%
Reducing senior nutrition 57%
Reducing enforcement of building codes 55%
Reducing graffiti removal 55%
Reducing park maintenance 53%

The web survey with only SJ residents were supportive of some of the proposed cuts:
Delay opening of South SJ Police Substation 73.%
Reducing public information hours at police station 86.6%
Reduce police patrolling downtown on horseback 75%
Reducing park rangers at regional parks 71.1%
Reducing senior nutrition 77%
Reducing enforcement of building codes 57.2%
Reducing graffiti removal 49.4%
Reducing park maintenance 56.6%
Reducing library hours 68.2%
Reducing recreation programs 64.9%

When asked how they would divide $100 among five different goals:

City’s poll:
Safe City $25
Prosperous City $23.80
Infrastructure $20.10
Green City $16.40
Vibrant City $14.80

Web Poll, SJ residents only:
Safe City $33.08
Prosperous City $18.26
Infrastructure $28.87
Green City $13.01
Vibrant City $13.41

When asked which one of the following three strategies the City of San Jose should place the highest priority on to address its budget shortfall?

City’s poll:

Reduce employee compensation & benefits 41%
Reduce existing city services 21%
Raising taxes & fees 25%
None & Don’t Know 13%

Web survey, SJ residents only:

Reduce employee compensation & benefits 58.2%
Reduce existing city services 15.9%
Raising taxes & fees 13.3%
None 7.5%
Don’t Know 5.1%

Here are results of SJ only respondents to the three questions I added:

Tax Medicinal Marijuana: 83.5% Yes, 9.6% No, 6.9% Don’t Know
New tax only for Trails: 43.9% Yes, 46.3% No, 9.9% Don’t Know
New tax only for Police: 30.8% Yes, 59.2% No, 10% Don’t Know

The support for taxing marijuana for medicinal uses tracks the voting results in the recent Colorado and Oakland elections.

However the biggest feedback from the survey for me was the 564 comments (495 from SJ residents). These comments are feedback to policy makers and are likely voices we will not hear at an actual council meeting.

Here is a link to all the questions and the 564 comments from respondents.

One person who participated in the survey made reference to me as a specific animal; that’s okay, this is America, land of free speech. I thank everyone who participated.

On another topic, I attended a vigil on Saturday for the missing 83 year old woman who disappeared on Kingfisher Way in San Jose. Please go to this link for more information or if you have information that could help find her.

This is a good reminder for all of us to look out for our neighbors.

Posted in Budget | Comments closed

Candid Camera

Photo radar helps augment traffic safety, as well as that of pedestrians and neighborhoods. A tweaking of the current policy to improve safety will not cost the state any money, and in fact will raise money while at the same time lowering emergency room health care costs. Speeding cars in our neighborhoods continue to remain an issue. The City of San Jose does what it can to manage speeding on our streets with the dollars we are able to allocate.

The City deals with speeders cars in two ways. One is enforcement with our Traffic Enforcement Unit (TEU). TEU are police officers on motorcycles that split their time in neighborhood “hot spots” where speeding is reported. You can report speeding in your neighborhood by clicking this link.

The SJPD aggregates the complaints and then tries to prioritize them as a way to identify the hot spots. The other portion of traffic enforcement’s time is spent at intersections with the highest rate of car accidents. Of course, as pointed out last week on my blog, we only have a limited number of police officers covering a city of a million people.

The other City tool is our Department of Transportation (DOT), which has a small but dedicated group committed to traffic calming who work with a limited budget and are mandated to follow state law. The state determines signage, street markings and the actual speed limit on San Jose streets.

San Jose previously had photo radar: a van parked on streets that took pictures of car license plates that were speeding. However, due to issues at the state level, the program was eliminated. Data from the DOT showed that photo radar reduced speeding on neighborhood streets. Gov. Schwarzenegger has recently proposed an expansion of photo radar.

Drivers who speed are dangerous. Time and time again we have a tragedy of some innocent pedestrian getting killed by an irresponsible driver. Currently, red light running cameras are legal in California; the idea is to also allow that same camera to give out speeding tickets. There is also speculation of allowing mid-block radar as well.

If you believe speeding is a problem in your neighborhood please contact your state representative this week and tell them you support the expansion of photo radar.

Police cannot be on every street 24/7, but technology can help fill the gap. We need our limited police resources for actions that only a police officer can do like investigating violent crime, property crime, gangs and community policing.

On to other matters: On Friday, we released the mid-year budget review. We had less revenue than expected so we drained $4.5 million out of our $10 million economic uncertainty reserve. You may remember an October 2009 blog when a Lobbyist came to the council meeting lambasting the City to spend the reserve instead of saving the money. Individuals are told by financial planners to save six months of living expenses in case of unemployment, so our City, having a one percent reserve is the minimum and should be higher. Going forward we will have $5.5 million left out of an approximate billion dollar budget.

Also worth noting from the report was the annual Hayes Mansion subsidy from the city was $5.9 million which is equivalent to approximately 50 police officers or approximately 40 police officers and opening all of our libraries citywide on Sundays. Take your pick.

Finally our Building & Structure Construction Tax decreased 50 percent—from $8 million to $4 million. It’s important to note that affordable housing in San Jose is exempt from paying these fees that go towards the paving roads. As market rate housing is in the tank the only housing going forward are affordable housing projects that sadly do not provide parks either, again an exemption made by the city council. Think of that next time you buy new shocks or tires for your car.

The City of San Jose Budget Prioritization Survey, available by clicking this link, closes Feb 5.

Also posted in City Council, Politics, Reserve | Comments closed

The Thinner Blue Line

Due to the structural budget deficit and the decline of tax revenues coming into the city, the January police academy has been postponed indefinitely. By postponing the academy the city saves money but risks neighborhood safety.

To be fair, it is a balancing act of what you would like to provide and what money you actually have on hand. However as I and others have pointed out, the city continues to spend money on items that are not in the city charter. In addition it does not require cuts in these “nice-to-have” items, as our core city departments have done in the past and must do again now. This is clearly problematic.

I think we all understand that a police force is expensive, but it is important to have fully vetted and qualified police candidates who provide safety and trust to San Jose residents. Other positions in our city may have an abundance of qualified candidates who apply, but when it comes to police there is a smaller pool with far fewer qualified applicants. It is a position that deserves to paid well, and within the limits of what taxpayers can afford. With that said, other city staff provide value to the organization and residents, but police put their life on the line at any given moment. One can be cynical about the old police doughnut-shop stereotype but in reality police are killed in this country every few days so there is inherent risk. (Click this link to see a report illustrating that fact.)

The problem with pushing out the new police academy class is that we are trying to keep up with retirements, not add additional police but just keep up. We have 80 officers retiring this year (some due to low morale) and the same number next year. It takes 18 months to get a police recruit out on the street. Our police force, much like our professional city staff, is starting to peak on retirements. There will be massive turnover in the next five to eight years for the entire city workforce.

This turnover is why 2nd Tier Pensions (benefits taxpayers can actually afford) for new hires is so important to do now. So by pushing out the academy the ratio of police to residents will decrease even more. What does that mean to you? Well maybe it is fewer police officers that are giving out speeding tickets in our neighborhoods. Maybe it is fewer officers investigating a homicide, rape or burglary. Maybe it is fewer police working on gang prevention and suppression. Certainly it will lead to more police overtime which is an additional variable cost that is tough to budget.

The Council has discretion to ensure that a police academy does occur now, as it only takes six votes. The Council in the short term could simply allocate $4.5 million from the anti-tobacco funds (Healthy Neighborhood Venture Fund) and designate the money towards the police academy for 45 new officers. We have $7.8 million in this fund that has not been spent and could be directed on anything the Council wants.

Others would like to consider using these same funds to allow for more affordable housing and others would like to keep the status quo and continue to fund charities/non-profits which are not in our city charter. The remaining funds could be part of the longer term strategy to hire civilians to swap out police officers from desk duty and get them back on the street. The Police Chief, City Manager and City Auditor agree on this as stated in the report linked here.

I cannot be everything to everyone nor can the City be everything to everyone. We have to make choices that inevitably have trade-offs and make some unhappy. I was elected to vote on issues and make tough choices.

Here is a link that summarizes the peak year, recent year, and projected year performance for the City’s major revenues. Scroll to the right for big negative numbers.

The City of San Jose Budget Prioritization Survey is still open till Feb 5.

Also posted in Police, Politics | Comments closed

Budget Prioritization Survey

The City of San Jose has contracted with a public opinion survey company to poll residents on the city’s budget in a project fondly known as “the City of San Jose Budget Prioritization Survey.” The control group of the survey is 900 residents representing the entire City. They will be contacted by home and cell phones.

In the end, the survey company will try to ensure that the demographic breakdown of survey respondents mirrors the demographics of San Jose, with a certain margin for error. This data will be shared at a public study session at the City Council Feb. 16 at 9am. This will give the Council scientific polling data on budget priorities from San Jose residents. In addition to the phone survey we will be holding a Neighborhood Association/Youth Commission Priority Session this Saturday at 10am at City Hall in room 119 to discuss the budget deficit. Both meetings are public.

Since you may be one of the 1,006,000 residents who will not be getting a call, I wanted to share some of the questions via a web survey and then share the results on San Jose Inside on Feb 8.

On another note, the Council passed a citywide inclusionary housing policy which Councilmember Constant and I voted against. Then a few minutes later, the Council made an exemption to the policy for one section of the City. So although a citywide policy passed for every developer, the City made an exception that one development did not have to comply with the inclusionary housing policy. Makes me wonder; if inclusionary housing is such a good idea then why make an exception?

Here is a link to the City of San Jose Budget Prioritization Survey.

Also posted in City Council, Politics | Comments closed

San Jose’s Native Gen X’ers

2009 was a challenging year. San Jose government had its decline in revenue in addition to suffering from an overall structural budget deficit. Many families in San Jose lost their jobs and still continue to struggle in finding another one. All of us have been impacted by the Great Recession of 2008-2009 in some way.

With the eye of the Great Recession’s hurricane ideally behind us, I look to 2010 as a year that government gets back to basics and provides the needs of the community, not the “wants.” For example, government should concentrate on how it will replace retiring police officers,(100 police retiring this year, which is double the normal rate) keep our libraries open and simply pass a budget that takes care of the basic things you would expect the city to provide as stated in the city charter. Basically, the things that you pay for as taxpayers.

I turned 40 in December. I spent my birthday with family and long-time friends. Many of my friends I have known since age five, from kindergarten in San Jose Unified School District, which equates to knowing most of my friends for more than 30 years. The majority of my friends are not political in their occupations and nearly all of them have never been to a San Jose Council meeting. Instead, they are teachers, nurses, Realtors, attorneys, tech folks, blue-collar skilled tradesmen, stay-at-home parents and—as my Mom likes to point out— most are married with children.

Many of my native San Jose friends have a very positive outlook towards San Jose. Their views are somewhat different than what I hear in my council office, where, typically, I hear alot about what is wrong with our city or questions as to why things aren’t done differently.

My friends income levels vary—some own the homes they live in while others rent. However, they all share similar dreams of San Jose’s future. Although they strive for a better city in many ways, they strongly believe that San Jose is a great city today. They are proud that we continue to have one of the safest big cities in the United States, and of our supportive of our police department. They like the small-town feel throughout the City even though we are a City of a million people, enjoy the great weather and, even with a recession, believe this region is still the best place to be by their standards.

When I spoke to my friends at my birthday and over the holidays in December, there was consensus that building the Arena and bringing in the Sharks were great decisions and because of that both female and male are positive on the chance of major league baseball in Downtown. They enjoy going to our Downtown for the Children’s Discovery Museum, Tech Museum, Christmas in the Park and look forward to the reopening of Happy Hollow Park and Zoo.

Most importantly, is they said that they have a choice of where they can live which is why they chose San Jose. That is an important point to remember, since if a person really dislikes where they live then they can simply relocate as many people do all the time.

2010 will carry its challenges and there will be many tough decisions for the council and for individual families. However, I hope the worst is behind us. They say flat is the new up and with that we don’t expect big growth next year but maybe over time. The city on the other hand will take 2-3 years to recover as it takes awhile for revenues to return to municipalities.

I wish you and your family happiness and health in 2010.

Saturday, Jan 9 at 9am is the next volunteer day in our San Jose Municipal Rose Garden. 600 bare root roses will be given away to volunteers who arrive before 9am compliments of Star Roses. See you there.

Also posted in City Council, Politics | Comments closed

Punting the RDA Budget

The Council punted the Redevelopment Agency (RDA) budget last week to February 2010. As has already been highlighted in the news, the state is taking $75 million away from San Jose’s RDA. We need to pay the State off in May and identify where the money is coming from in March (no negotiation or payment plans on this matter are allowed by the State). The legislature, recognizing that this payment would be difficult for all RDA agencies, allowed for borrowing from affordable housing money which is 100-percent funded from RDA. Twenty percent of all RDA money goes off the top to the Housing Department in San Jose. The payroll for the housing department alone is $9.7 million a year for 83 employees for an average salary of $117,000.

The Mayor’s Budget message was pragmatic in that it said let’s not spend any money ‘til we work out borrowing the money from the housing department to pay the State; let’s determine whether or not RDA is able to issue bonds to pay for a capital program—which would include matching the hotel owners’ share and expanding the convention center; and let’s continue negotiating with the County of Santa Clara (which by the way in the last decade has been paid $270 million by the RDA).

The Mayor had a very good public meeting with stakeholders from all sides prior to writing the budget message. Everyone who attended realized the choices are difficult and few options exist. Everyone at the meeting got the same information—that San Jose has already built 18,000 units of affordable housing by spending hundreds of millions of RDA dollars making San Jose the number-one provider of affordable housing in the state of California. Everyone left the meeting understanding that there is no pixie dust to magically fix things. A majority at the Mayor’s meeting felt that economic development should be the priority now.

However, when it came to voting on the budget, another option was voted upon at the last minute that asked for a $25 million reduction in how much would be borrowed from the Housing Dept., and instead look at borrowing from other sources. This option was well liked by the audience (which was made up by mostly paid affordable housing lobbyists and people who work for affordable housing entities in some capacity—the Housing Director is campaigning against the Mayor and is ensuring that she has her supporters at the meetings). This “option” would take money by borrowing monies from the following: Commercial Paper backed by the General Fund, Sewage Treatment Plant Connection Fee, Library Parcel Tax, Sewer Service and Use Charge, Integrated Waste Management, Ice Centre Revenue Fund and HNVF-Anti-Tobacco Funds. This “option”—taking from all of these other resources—was approved on a 7-3 vote with Mayor Reed, Pete Constant and myself voting no.

We have borrowed money from some of these funds before, but that was to balance our general fund so we could fund core services like public safety and not more affordable housing. If we borrow this money now to create more affordable housing, then we will have one less arrow in our quiver to balance the general fund budget in June.

My question to you is: Should we use money that is supposed to go towards core services like sewers and water treatment plant so that we can build more affordable housing that does not pay fees for parks or road paving?

How do you feel as a voter that may have supported the library parcel tax to let that money be borrowed for more affordable housing that does not pay property taxes (property taxes is the number one revenue source to pay for city services) versus what you intended that money to be spent on…libraries.

I remember months back Councilmember Constant and I were criticized because we wanted to use the Healthy Neighborhood Venture Fund (HNVF)/Anti Tobacco money to pay for school crossing guards, a public safety service the City has had in place since the 1940’s. It’s okay to use these funds for affordable housing but not for crossing guards? Hmm…sounds like maybe a vote of the people should be had on how these funds should be spent. With a $75 million deficit just for RDA and another $96-plus million deficit for the City’s General Fund, I am all for the residents sharing their votes via the ballot. If we can ask residents to raise their taxes then we can ask them for direction on spending their money.

I now have a Facebook page for my tenure on the city council. Here is the link.

Also posted in City Council, Politics, RDA | Comments closed

Feedback From RDA Survey is Beneficial

A couple of weeks ago I put together my own web based Redevelopment Budget survey. I shared financial information in bullet point form in the introduction and then gave information throughout the survey. In some cases I would state the dollar amount given to a particular program and then ask a question. More than 600 people completed the survey, which required that each question be answered. The survey could not be taken twice.

As with most issues that involve money, the feedback to my survey was mixed. I had a person who refused to even participate because they didn’t like how I set up the survey. Others lauded my courage to share data and seek their input. They felt I was taking a risk to allow residents to share their concerns.

Web surveys are not necessarily scientific surveys, since web surveys allow anyone to participate. As we know, a true scientific survey controls and limits who is surveyed by gender, age, race, income level, voter registration and geographic location of the respondent. Scientific surveys can cost about $40,000 for 1,000 people.

Viewpoints are subjective. Whereas one person may view a question as biased another may view it as objective. However, the most important part of a survey question is that the data be factual. In my survey, there were approximately 10 comments out of over 600 people who completed the survey who felt that particular survey questions were biased. For example, one person told me that I was “leading” the survey because I said that San Jose RDA has spent hundreds of millions of dollars on 18,000 units of affordable housing. I shared that this is information is factual and not leading.

My survey shared, in synopsis form, how much money has been spent on various issues. Many people did not realize that San Jose is the leader in affordable housing. Some respondents shared that they are very pleased with the Strong Neighborhood Initiative (SNI). While others, agreeing with affordable housing and SNI, felt that that we should spend money on economic development this next fiscal year. My survey allowed those who chose to participate an outlet to share concerns, recommendations and rank their priorities for RDA monies.

As I have said, there were a few participants who felt the survey was biased; however, when I did a cross tabulation all but one of them chose Affordable Housing or SNI as more important then Economic Development. Cross tabulation also showed most of these specific participants felt that we should not borrow money from the Housing Department to spend on Economic Development this year. In addition, most of these participants shared that it was okay to spend money on a small fraction of neighborhoods in San Jose even though there are neighborhood infrastructure needs citywide.

After reading comments and speaking with survey respondents, I would add more choices to future surveys. For example, when it comes to ranking priorities I would add two more options; “Save Money”—since some people would rather not spend—and “None of the Above.”

The survey required that beach question to be answered, identical to how a councilmember “must” vote. Many times the Council votes on an ordinance or budget that individual councilmembers may not agree with 100 percent, so sometimes council votes for a package of things that are a bit uncomfortable. It’s the same feeling that some of the respondents felt when asked to make decisions regarding the survey.

Another item I would add in the future is a web link if available for additional information. For example, respondents did not necessarily know what specific improvements were proposed at St. James Park, Japantown, Civic Auditorium, etc. The RDA budget is available online, however specific information on the proposed improvements is not easily found.

Thank you to those of you who participated in the survey. I know it was not easy and may have caused you to feel conflicted. I appreciate your time to engage and share your viewpoints with me.

Some of the results:

• 69.5% out of 787 respondents felt that borrowing from the Housing Dept. this year for Economic Development was okay.

• 70.8% out of 763 respondents disagreed with spending RDA money for a small fraction of neighborhoods in San Jose versus overall.

• 79.4% out of 709 respondents felt that Economic Development should be number one priority of RDA money.

• 59.7% out of 709 respondents approved of the Convention Center expansion.

• 52.8% out of 709 respondents did not approve of RDA land banking for a Downtown Baseball stadium.

• Here is a link to all the results, including 268 comments.

Finally here is a table from Mayor Reed’s RDA Budget message that shows how economic development is better for city tax revenues and ongoing jobs then affordable housing.

Also posted in Politics, RDA | Comments closed

Small Decisions Can Result in More Layoffs

Last week, at the city council meeting, I removed an item from the consent calendar on the agenda for discussion. As you may remember from my blog about San Jose’s million-dollar golf nets, consent calendar items do not have individual discussion, but rather are voted on all at the same time. If one wants to discuss a consent item, you have to “remove” it for discussion.

The item I removed was asking $993,876 for the library to spend over the course of seven years on an online tutoring service for kids. Nearly a million dollars is a significant amount of money. The $993,876 was not restricted funds and could have been spent on librarians instead. My comment/question to the council was: If we know we are going to have to do layoffs of library staff on July 1, 2010 to balance the budget, then maybe we should hold off on discretionary spending so we can retain staff to keep our libraries open. This expenditure is approximately two librarians salary each year for seven years. My comment fell on deaf ears and the council voted to spend this money; I voted against this expenditure.

When it comes to the libraries, the core deliverable to me is that libraries are open as many hours a week as we can afford, so users can access information and have a place to study. Any and all other programming should be funded after libraries are open seven days a week. If we have funds left over after libraries are open seven days a week then we can start evaluating the option of adding different programs. Until then, the City’s money should be used to keep libraries open with staff.

The online tutoring service could be canceled from year to year; however, good luck ever canceling a program/service once it starts.

On another note, I posted a survey last week regarding the Redevelopment Agency (RDA) budget. The RDA board adopts the final budget on Dec. 8. A person shared with me that the question I posted below (which appears on the survey) was “biased.” I shared that the information I gave was factual, not biased. I thought I would share the question with you here. I have added commentary in bold parenthesis:

The Redevelopment Agency has spent $774 million on housing (true) making San Jose the number-one provider of affordable housing in the state of California (true) by financing 18,000 units (true) of affordable housing while neighboring cities do next to nothing for affordable housing. (Neighboring Cities have not met the Association Bay Area Governments (ABAG) affordable housing targets, while San Jose has exceeded overall ABAG affordable housing targets). With so much given to affordable housing and so many people in need of jobs (12.5 percent unemployment), should the RDA borrow money from affordable housing reserves this year, as allowed by state law (true), to be spent instead on economic development to help create jobs?

The Redevelopment budget survey can be found here. It closes this week.

Happy Thanksgiving San Jose.

Also posted in City Council, Libraries, Politics, RDA | Comments closed

Do Things Differently

Last week, the council had a special meeting to discuss the upcoming $96 million budget shortfall. $96 million is the equivalent of eliminating all library, park and community center positions citywide. My fellow councilmembers and I gave the city manager direction on how best we think the budget gap could be closed.

The first part of the meeting covered the shortfall—which may still grow by either continued lagging revenues from sales taxes and property taxes, or the state legislature grabbing more city funds. It is clear that there are no easy answers. I hear people say “since the stock market is up then the city budget will be ok.” The stock market going up does not provide jobs to unemployed San Jose residents nor does it bring revenues to pay for city services. The only benefit is it might reduce our pension matches slightly next year; however our pension portfolios are invested in more than equities.

We spent time talking about raising taxes on residents, such as a sales tax increase to pay for city services. I said that I would prefer that we increase taxes on card clubs and allow them more tables as allowed by state law, which would bring in as much as $12 million. The card clubs already bring the city approximately $13 million each year.

I also mentioned that taxing medicinal marijuana would help our budget deficit as well.

We then went on to options that would reduce per-employee cost, whether it be pay cuts, increasing medical co-payments or 2nd tier retirement plans for city employees not yet hired. As you would expect none of these options were popular with the council.

Then city management unveiled, its “Approach to Prioritizing City Services” AKA “Core Services.” This concept would be a long stakeholder engagement process that would include scoring and weighing the value of 450 city programs identified so far. However it would not necessarily eliminate programs that scored low. The presentation contained buzz words like «engaging stakeholders,» «peer review,» «finalize a work plan.»

Others said it is not right to prioritize and rank since it puts certain city services against each other. I shared that I am willing to participate, but that the approach presented is meant to give “political cover” in making decisions.

I believe that we can’t make paid interest groups happy all the time and at some point we have to vote to make changes that may be unpopular. The Council was elected to make decisions on behalf of everyone in their district and City, not just a few. This process could take a year, therefore, I immediately offered what my core city services are: Police, Sewers, Fire, Streets, Planning, Emergency Preparedness, Economic Development, Libraries, Parks and Code Enforcement. The presentation left out an obvious city priority: infrastructure. Without sewers and streets life in a city comes to a stop.

At the end of the meeting, the Council voted on my memo titled, “Make Union Negotiations Public.” The memo asked that closed door union negotiation meetings, which take up 75 percent of the city’s budget be public meetings. It did not pass on a 3-8 vote. The majority of the council voted to keep these meetings behind closed doors even though these past meetings are why we have a structural budget deficit.

I have posted the presentation from the meeting on my Council website labeled, 2010-11 Budget Planning – Nov. 5, 2009.

Also posted in City Council, Politics | Comments closed

2006-2007: Rest in Peace

I survived another late night city council meeting. This one was the last of the 2006-2007 fiscal year. The meeting began at 1:30 p.m. but did not end until 11:30 p.m. I am not quite sure if having a ten hour meeting allows for the time needed to go over important items like Coyote Valley, a hazardous waste facility, and Evergreen, among others. Members of the community come to the city council meetings and have to wait for hours just to be heard for one or two minutes regarding their particular issue. And, of course, we had a smorgasbord of last-minute issues that either couldn’t wait until August, or were not planned appropriately to come up at an earlier meeting date.

Here are a few important issues with my opinions.

Surplus city owned property
In an attempt to acquire revenue, the Public Works Department brought forth a proposal to auction off various parcels of city owned land. A few of those parcels were identified by community leaders in my district for possible parks. I removed this proposal from the consent calendar and asked that it to be deferred to October. As we know, land is a precious commodity; once we sell, it is gone forever. If the city is serious about saving money, then I think the city should do a better job of managing its everyday expenses—not sell land that will only increase in value.

Coyote Valley
As I have mentioned before, I am not supportive of developing or planning for Coyote Valley at this time. Currently, there are many reasons why this development would be harmful for San Jose, such as the lack of tax base, depletion of city services, sprawl, and depleting open space. The question I have is: Is the city being disingenuous with allowing the planning to continue? For example, if the city as a whole does not want to develop Coyote now, then we should stop planning. Some of our best planners are working on this project which takes them away from other infill developments that deserve expertise.

Evergreen
The discussion of Evergreen reminded me of a mathematics class: a complex formula of merging both Mayor Reed’s and Vice Mayor Cortese’s memos together with a few amendments. In the end, we had something to move forward with and will review each proposed development case by case.

$2 million nets for the Los Lagos Golf course
After spending over $100, 000 on a consultant, it was determined that the city owned golf course, Las Lagos, needed new netting at a cost of $2 million to keep the golf balls from going in the street. Yes, $2 million for nets. The golf course was “supposed” to be profitable. Instead, the city has spent $24 million on the golf course already since it was opened approximately a decade ago. Las Lagos has operated at a loss every year—absolutely no profit.

Las Lagos sits on 200 acres of city owned property. One might think that the investment of $24 million on a golf course isn’t working and the city should cease spending money on it. Perhaps we could use the 200 acres for organized play. I believe that San Jose should open a similar business like Twin Creeks in Sunnyvale, which offers organized fee-based team sports for both men and women. Twin Creeks is a private company that makes money offering organized play to our residents.

I am confused as to why a city government would continue spending millions on a golf course. Decisions like these keep me up at night. Rancho Del Pueblo, which is another city owned golf course, has also operated at a loss since it opened.

Hazardous waste site at Las Plumas
After looking at six other sites, the City of San Jose decided to place its hazardous waste site at Las Plumas. This facility will serve the city well. Residents will be able to drop off paint, batteries, aerosol cans, etc. We don’t want residents throwing these items into the ground or gutter. I must share that the city is feeling the ramifications of the poorly made decisions of converting industrial land to housing. Fewer and fewer options for industrial uses in San Jose are available. Another example was the difficulty of finding industrial land for CWS, the new garbage hauler in San Jose. As Mayor Reed, a few other council members and I have stated, we need to stop the conversion of industrial land.

For the month of July (during the council recess) I will be working at my private sector job. I think it is important that I continue my profession so that I don’t lose perspective of the “real world.”

Posted in Budget | Comments closed

Passing the Budget

Whew—just before midnight, we passed the budget!

After many long budget hearings, staff presentations, public testimony and robbing Peter to pay Paul, we have a “balanced” budget.

The City of San Jose cannot borrow funds like the federal government. Therefore, we must balance our books every year. We do have bonds to pay for our capital projects such as new libraries, fire stations and parks; but for the most part, we have to make sure we have funds that match expenses—which is one of the most difficult jobs of a city government.

As hard as it was this year to find funding for much needed projects and to make an attempt to be fair to all people, it will be an even harder task next year to meet the same expectations.

I believe that the city needs to spend money prudently. We should not convert industrial land that will create revenue for the city and not be “lawsuit happy.” The city had to pay over $30 million to settle just two lawsuits. One was to take land away from a small business owner (Tropicana), and the other was to sue the county because we had an issue about who could build an outside theater. Now, neither the city nor county have an amphitheater. What the city council could have paid for with the $30+ million we wasted on lawsuits.

The budget process is tough, even for folks like me who consider themselves penny savers. For example, I supported allocating $257,000 to EHC for their homeless center rather than funding the “insourcing” of the graveyard shift janitors at $1.2 million a year. There are some that argue that bringing janitors on as fulltime employees is a better use of money than providing for the homeless, but I disagree.

I requested that EHC put their financials on their website. As I have mentioned before, any non-profit group receiving over $100,000 from the city should have their audited financials posted on their public facing website. They agreed. To compare, I supported $257,000 to assist 125 homeless people rather than spend $1.2 million a year for 25 janitors, who are already employed with a living wage and medical benefits, to become city employees.

At the end of the final budget hearing, my request to put aside almost $1 million to help fund public/private partnerships for park maintenance was accepted by the city council. I felt a sense of camaraderie at that moment and I was honored that my fellow council members supported this request. It is an allocation that if used innovatively and appropriately, could be put to good use for all parks in San Jose.

Other choices and questions that we will have to make in the future include funding for “green” (LEED certified) buildings. Are we willing to spend more on one building even though that may mean we sacrifice a new library for another San Jose neighborhood?

What ideas and thoughts do you have regarding the budget?

Posted in Budget | Tagged Reform | Comments closed

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