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.
So, the city has enough money to pay six figure pensions, but doesn’t have enough money to maintain a park that already exists.
The main problem, as Pier stated, is that our past city councils have been bought and paid for by developers and were allowed to not build parks while building hundreds of thousands of low income units. …“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”… If only we could have that money plus the close to a billion that was spent on the new city hall our city would be in pretty good shape.
A one time loss of 90 million doesn’t explain a structural 100 million dollar deficit.
San Jose doesn’t have hundreds of thousands of low income units. It certainly hasn’t recently built hundreds of thousands of them. For scale, “hundreds of thousands of units” is a good description of all homes in San Jose.
I agree that every project should pay its share for parks, but it doesn’t come close to explaining San Jose’s budget problems.
Greg,
Take a drive around our city and see the high density units that have been built onto any available piece of land, regardless if they fit into the surrounding neighborhood or not. These developments do nothing to bring revenue into the city, and are in fact a black hole of spending and resources for the city. These developments have been approved by our city council, past and present. These developments built over the past 10 years go a long way to explaining the structural deficit. Imagine if just half these developments had instead been used for revenue producing business which instead located to surrounding cities. Imagine if the city could have back the $650 million or so that was pushed through for the Taj Mahal of San Jose.
Pension costs grow each year and eat into neighborhood services.
Yes Pier, we get your message, the city workers are all to blame for everything wrong.
The city pension match was $142 million last fiscal year. This fiscal year it will be $180 million. Next fiscal year it will be approx $225-240 million.
This years pension match of $180 million is approximately equal to the entire city wide Fire Department which our largest department expenditure outside of Police which is approx $240 million.
The city workers are good people it is just that we do not have revenue to cover the benefits which is why we need to switch to two tier pensions the taxpayer can afford.
Our city has a police department that is short by at least 500 officers, and has been for many years. Our police department is the lowest staffed per capita of the 20 largest cities in the United States. San Jose saves at least 50-75 million dollars annually on the backs of an understaffed police department. Our police officers pay about 13% of their gross salary into their own pension fund. This is in contrast to other cities participating in PERS and those police officers paying nothing for their portion in PERS with that city paying the entire tab. San Jose Police pension fund has consistantly overperformed the benchmark set by an actuary, and the extra earned money was given back to the city to be used as the city wished. San Jose police officers also agreed last year to give back 5% of their gross salary to prefund their retirement medical insurance, in essence agreeing to a 5% paycut.
Perhaps a two tier system is appropriate, that is yet to be worked out. What is for sure is that the city has overspent year after year for funding pet projects, feel good programs, and our monstrosity of a city hall. The city for years has gotten away from it’s main purpose of providing great core services and getting businesses to locate in San Jose, as our surrounding neighbors have done.
Until this is fixed, and this does need to be fixed first, any money the city gains from a two tier pension fund will simply fuel a broken system of runaway spending on porkulus projects rather then basic core services.
Can you give an exact figure of how many officers retire at age 50 at the making this amount? The absolute maximum percentage an officer can retire at is 90% after 30 years of service, and the minimum hiring age is 21, so that would put this officer at 51, and his maximun retirement at 90 not 100k as you stated. Also, in todays dollars, an officer contributes 13k of his own gross salary, which after 30 years at 8% interest, would mean his own contribution would have grown to 1.6 million dollars. This means the officer would be in his late sixties and still being paid his pension from only just the money he contributed.
Our city has squandered money for many years on things that have nothing to do with core services. That is why our city is running out of money. If they had been frugal, spending money on just core services as they should have, and investing left over money wisely, the city would be in great shape financially. To say this is the fault of the police officers is just political smoke, probably from the local cannabis club, and mirrors.
“an officer contributes 13k of his own gross salary, which after 30 years at 8% interest, would mean his own contribution would have grown to 1.6 million dollars.”
I doubt that there has EVER been a 30 year period of time when any pension fund grew @ 8%/year for all 30 years. That’s an absurdly high assumption; yet I believe it’s the percentage SJ uses to decide how much extra to put into the pot each year for the golden parachutes of retired city workers.
The average stock market return between 1871-2009
is over 9%. That is where the money is invested that comes directly out of each officer’s paycheck. That is where I have invested my own personal IRA since the early 80’s, and it has done very well. Just because the officers have made a decision to invest wisely with their own money, I don’t see why they should be punished because the city has decided to put that money into boondoggle feel good social programs, low income housing, golf courses, a ridiculously expensive city hall, frivolous art, all of which is just the tip of the iceberg.
http://www.moneychimp.com/features/market_cagr.htm
No one in San Jose’s police department has contributed 13K per year for the last 30 years. No one.
For that to be true, new hires in 1980 would have to have been paid 100K per year. Not true.
You would also need retirees to have paid into the 3% at 50 formula for 30 years. It wasn’t even available back then.
And you would need retirees to work 30 years with no step increases or promotions. Not what usually happens.
Run your numbers for the actual contributions of actual retirees. Remember that the years with the greatest compound interest are the low contribution years. Then tell us how many years they paid for.
What you have now is young officers are losing salary in order to pay into the golden pensions of senior retirees. And, once the money is gone, the young guys will have to police the same city with fewer people.
San Jose does not have a 3% at 50 plan. You are confusing that with PERS. Many agencies which are in PERS pay 100% of those employees contribution into PERS. San Jose officers pay 13% of their gross pay into their own system which has been invested very wisely. According to actuaries they are almost 100% funded meaning if nobody else were to pay into the system it could pay for the retirees from the money already in the fund. San Jose officers also agreed last year to give back 5% of their salary to prefund their retirement insurance, something their PERS peers have not done. This is a very big reason other experienced officers from other agencies do not come to SJPD, as most other agencies are in PERS. Maybe our department should join PERS so they don’t have to contribute to their own retirement and they could attract lateral officers.
We agree on pet projects like the city hall. A complete waste of money, and a big drain on city services.
However, paying someone a six figure retirement that starts at 50 years old is just as unjustified. If you want to hire another 500 officers, you can’t pay them 100K salary plus 100K per year to retire. You simply run out of money.
Good Title! I love that Seinfeld episode. Seems appropriate considering how the city has treated neighborhoods with low income housing. No parks but here is a liquor store. The $70-90 million would have paid for the $55 million wish list.
Keep fighting Pierluigi!
Pierluigi, keep fighting the good fight. You are a voice of responsibility in city government. We need more like you.
everybody remember that as elections occur.
Pier,
Can you please provide the historical return for the San Jose Police and Fire pension fund since it’s inception and if it has returned above or below 8%?
If we’re going to run this number, what have SJPD employees actually contributed to the retirement plan over the last 30 years?