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
It’s time Judy and Mickey to go back to the barn.
We could put on a show with singing and dancing and show girls and marching bands.
We can raise lots of money this way!
MGM hit on a winning formula when it paired Garland with Mickey Rooney in a string of “backyard musicals”. The duo first appeared together in the 1937 B movie Thoroughbreds Don’t Cry. They became a sensation, and teamed up again in Love Finds Andy Hardy. Garland would eventually star with Rooney in nine films.
John Michael O’Bama and George Berlin
Pierluigi,
Thanks for the insight into the ever-worsening City budget deficit. None of the ideas presented are worth a tinker’s damn in the grand scheme of things.
One truly must identify waste and fat, which seems to be most unpalatable to City management, Council Members and unions. Massive cuts to compensation and/or layoffs numbering in the low thousands will be necessary to right our problems.
The only other alternative is to follow S.F. and L.A. into the financial dumpster… sad but true.
Oh, but the SJ council has pleanty of time to debate plastic bags in grocery stores; and the county savior—Ken Yeager—fiddles around with Happy Meals.
Oh, forgot one thing – are we spending dough on Cinco de Mayo this year? I see that nearly all other celebrations, including our own Independence Day, have been cancelled due to lack of funding.
Please stand firm with your convictions, Pierluigi. The lack of cooperation from the unions is truly shameful. The excessive salary/benefit/pension commitments simply have to be modified; there is no other responsible alternative, and there is no other alternative which is fair to the taxpayers.
Stop talking about cutting police and firefighters but leaving theings like the Office of Cultural Affairs intact.
If my income doesn’t meet my expenses, I don’t stop paying the mortgage or stop buying food or stop paying PG&E. Instead I don’t renew my opera tickets, or Sharks tickets, or museum membership. In other words, cut out the non-essentials and keep the essentials.
Police and Fire protection are essentials. The Office of Cultural Affairs is not. I’d rather its staff of 16 be eliminated to avoid eliminating police or firefighters.
I have to believe that the City Manager advertised layoffs in the police and fire ranks for two rather transparent reasons.
First, it may scare the union officers into making concessions, versus eroding the dues-paying membership count.
Second, it may scare the taxpayers into coughing up more money to retain safety officers at the present levels.
It’s like a giant game of “chicken” designed to see who will flinch first.
well, if history is any teacher, the spineless labor dominated council will flinch first
JMOC
Don’t you see many millions in economic stimulus, benefits and 1000’s jobs after 2-3 X economic multiplier and $100’s millions in benefits that Office of Cultural Affairs city taxes creates when
> non profits and public – private ( labor ) partnerships receive city millions and bailouts employ former elected officials, families and friends and labor’s family and friends and use city taxes for required grant matches which increase employees and budgets while
> putting on fund raisers and events that require more city employees who giving campaign contributions and campaign workers to labor union / non-profit alliance candidate’s campaigns
> non profits giving campaign contributions and campaign workers to labor union / non-profit alliance candidate’s campaigns who hire campaign managers / future non profit lobbyists and buy union campaign literature and services who labor union employees contribute to candidates and elected officials giving campaign paybacks by voting more city taxes to non profits
> who then hire more labor union people and services who make more labor union / non profit alliance campaign contributions
> Office of Cultural Affairs hire mores labor union employees who give out more taxes increasing Labor Union / Non profit Alliance Jobs Machine jobs
> etc, etc , etc
Nice John McEnery-esque satire
If you and your colleagues are really serious about fixing this, then why is binding arbitration not on the ballot? Unless you fix this it is unlikely anything else you try will resolve the problem.
J.W.,
From what I understand (please correct me P.O. if I am wrong), the steps to eliminate binding arbitration are:
1) At least six City Council votes are needed to get the issue on the ballot,
2) If the six votes are achieved, the City drafts the language to make it a ballot proposal and pays for the costs associated,
3) The public votes on it and it passes or doesn’t.
I believe August 3rd is when it would have to be ballot-ready which means the council has to vote on it sooner. That said, I have heard ballot measures can be expensive, however if there is political will to have the public vote on it, then that must be demonstrated to City Council in order to get the (at least) six votes to pass it.
Tina
The cost of a ballot measure on this issue would be insignificant when weighed against the huge savings that the City would gain.
I believe your basic scenario is correct. We just need leadership from the Mayor and Council so don’t expect this issue to see the light of day.
I say do both. Cleaning up the charter as a whole will probably take years. Leveraging voter anger to get signatures for a charter amendment could happen now.
Of course, as Menlo Park is finding out, the unions don’t give up so easily:
http://www.mercurynews.com/ci_14839981
Pierluigi, I have to say it’s sad that we even have to think about doing this ourselves while the council meets with union reps. I’m assuming the odds of getting six council votes are just about nil?
The matter can be placed on the ballot by initiative also. Per the city charter, I see requirements for signatures from 5-8 percent of registered voters in San Jose needed.
The last citywide race was mayor in 2006 with 198,114 votes cast total in that race. If that was a 50% turnout (just a guess), we have 400,000 voters, which means about 20,000 signatures to get a charter amendment on the ballot.
That’s actually doable with a little grass-roots organizing and putting together a city-wide coalition. If you’re going to do all that work, though, wouldn’t you really want to clean up the charter and not just add another amendment?
If we are truly strong enough to start tackling the root of our cities budget woes then Council must consider discussing putting this on the ballot. Avoiding the discussion would send a message of its own to the public.
Hi Tina,
Yes you are correct on points 1-3.
But why mess around with binding arbitration and take a chance that that some liberal arbitrator will favor the side of labor?
It’s far easier to announce 1000 layoffs. If the unions don’t offer up concessions, then their members get the ax and the budget problem goes away.
Greg,
I’d be happy to hear about layoffs and they will obviously help, but what Just Wondering is bringing up is a long term solution. Union leadership will swallow layoffs, especially since their jobs will be safe (seniority determines who stays and goes). And the ones with seniority who stay will end up taking huge pensions from our tax dollars.
Layoffs will only help in the short term.
” 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 ”
How many millions in San Jose taxes go to non profits, less essential or nice to have city services or services we should not be providing while we do not have money for basic city services and staff while having close to highest taxes in US ?
Mercury published list of city’s “Politically Untouchable” money losing properties that are leased or given free to non profits, public-private partnerships and city contractors that yearly require millions in city taxes, bond payments and bailouts – Hayes Mansion, Mexican Heritage, golf courses, Tech museum, Rep, California theater and convention center that city should not be spending taxes on if we do not have money for basic city services
Since the poor use most services, we should increase taxes on the poor. This will also provide an incentive to not be poor. In other words, let’s use the tax code for social engineering.
> Since the poor use most services, we should increase taxes on the poor. This will also provide an incentive to not be poor. In other words, let’s use the tax code for social engineering.
BINGO!!
At last a progressive idea that I can get behind.
With forty-seven percent of households not paying any federal tax, there is a permanent constituency for higher taxes and more spending.
Justice Oliver Wendell Holmes famously said:
“Taxes are the price we pay for civilization.”
It’s time that every person, regardless of income level, pay SOMETHING to share in the burden of American civilization.
Those, who do not, but who continue to avail themselves of “transfer payments” from their fellow citizens who are funding civilization should be declared Wards of the State and surrender their voting privilege.
errrr ya. Because that has always worked so well in the past. Oh, and it is not a progressive solution but a medieval one.
The idea to replace natural lawns with artificial turf should be D.O.A. Last Summer, I went running one day at a High-School that had a cushion track and artificial turf. I could not believe how hot it was. These artificial turfs create “heat stamps,” and are probably not safe for football. (ie faster collisions and harder landings = more concussions).
Earl Campbell of Willow Glen must only play tennis on lawn courts not clay or asphalt like the common people he so much trys to avoid.
How about a tax deductible voluntary $250 property tax that will go to the City of San Jose? I’m willing to help my city in its time of need.
Would that help if 50-75% of the home owners contributed?
Grrrrl,
I like your style. You and the other three volunteers would generate another $1000 that the City could piss away in less than a minute.
“Finally, can we think outside the box with regionalism.”
Here’s a good start-combine all of the city library systems with the Santa Clara County library system. You’d get economies of scale, eliminate overhead and you’d only have to have one library card for the entire county.
Question:
Is their any money in the City of San Jose budget that is justified as needed to “fight global warming”?
CHOP! CHOP!
http://tomnelson.blogspot.com/2010/04/big-question-is-push-for-climate-change.html
Richard S. Lindzen, atmospheric physicist and professor at MIT, said:
“. . . . In point of fact, nothing proposed would have any discernible impact on climate regardless of one’s views on climate science. Rather, the legislation would simply be another mix of payoffs and taxes. Public concern over climate is sinking. The science is increasingly acknowledged as being far from certain and even dubious. Scandals, while being denied, are clearly real. Claims of certainty are being endorsed by professional societies with no expertise (presumably under pressure from the environmental enthusiasts in the White House) while many actual scientists are acknowledging severe problems. The situation is quite a mess, and, I suspect that many politicians sense this. Supporting such legislation gets ever riskier. Atop all this, the developing world is more clearly and vocally identifying carbon control with attempts to stifle desperately needed development—which is to say that the issue is developing a patina of profound immorality.”
I recognize from your profound ignorance of science that you don’t have a much of a clue on the fundamentals of climate change. So I will clue you in: it doesn’t have anything to do with our budget deficit.
Lumpy:
You’re screeching at the wrong audience.
Yell at The Obamagogue, Barbara Hindenboxer, and Al Gore that taxing and spending on “cap and trade” doesn’t have any effect on climate change.
And if you believe it does, yell at yourself, too.
“The science is increasingly acknowledged as being far from certain and even dubious,”
These folks can’t predict rain or shine reliably more than 24 hours out; yet we are expected to believe their predictions regarding rising sea levels 50 years from now.
Hopefully you know what you are doing, Mr. Oliverio. The city council, mayor, and city manager have decimated and demoralized the police department over the past year, and it is figuring to get much worse with scores of very senior officers leaving in the next few months, and younger officers going to other departments before they get laid off. You have become very, very complacent to the public’s safety. If our citizens cannot feel free to go about their daily lives without being in fear, then you have failed in your job. The price of freedom is eternal vigilance, not just from terrorists abroad which our soldiers fight, but those in our own backyards which our police officers must fight.
Yes, the price of freedom is eternal vigilance. But challenges to our freedom can come from many directions, including from overly powerful and politicized government agencies- even our own police and fire departments.
Senior officers leaving because they’re demoralized?
Or could it have more to do with the fact that we’ll pay them as much not to work as we pay them to work?
No John, it is because they are demoralized. These guys have been dragged through the mud for the past few years by the Mercury and every police hate group. Although they have been vindicated in different studies and court decisions, their own administration as well as the city council members and the city manager have being absent in any kind of support for the officers. Now, the biggest slap in the face is the appointment of the new IPA, who is, in Scott Herhold’s words, “a Barbara Attard of steroids”. At least 2 city council members and the mayor voted against this activist, ultra liberal judge as the next IPA.
These officers worked their asses off for many years taking many vicious and violent criminals off the street. They took great pride in this and protecting society. Many old time officers now have serious and permanent medical conditions as a result. These officers are not greedy as you portray them. Get to know them; they hate criminals and want to keep the city safe and that is what they have spent most of their adult life doing and making this a better city.
I applaud any Council Member, City Employee and Resident who sees that “Public Safety” belongs to all of us. There are proactive public safety measures like libraries, pools, parks, and programs (ex: Neighborhood Watch)that help ensure community members have an opportunity to be engaged in healthy, positive, and learning activities. When the unfortunate few decide to take a different path and cause trouble, then the other branch of public safety, our police and/or fire department should be called in.
This is why it is crucial that community members stand together to voice their support for these proactive programs and get engaged to work to save neighborhood services and by doing so, save City Jobs.
Keep standing up for these proactive public safety venues Pierluigi, which are our neighborhood services. You are doing the right thing and I applaud your efforts as a Council member.
Tina
But the Office of Cultural Affairs remains untouchable. Do they have compromising pictures of councilmembers or something? How else can they remain so aloof from the fray, and so secure in their positions?
JMO, it’s inexplicable. That’s why I refuse to take seriously anything related to City government. The Council is, as another reader noted, a jumping-off point for those who aspire to higher office.
Yet, in recent times, it’s humorous to see how so many benighted ex-Councilmembers have continued to feed at the public trough in County and State positions. As we speak, there is one – who could not think her way out of a wet paper bag – running for State Assembly.
I think the city should look at cutting wages, benefits and staff in those areas less affected by the last cuts before blasting the general staff. I am sure employees will be happy to take another cut for the team after the manager to worker ratio has been addressed and police and fire have made concessions. It is hard to agree to accept hardship when it is not equitable.
Tough times…small talk…no action.
Sad situation, and I’m surprised that Working Partnerships (Labor Think Tank) didn’t come up with something better, like some new revenue streams.
The basic situation is that the small town grown big was operating under a complex that they had to have the trappings of a big city to fit in with the cool crowd. Besides an airport, museums and such this meant a landmark city hall downtown and a big city government with all the departments and trappings.
There isn’t really a common sense menu of core services as distinct from all the frills we’ve added during the big growth years.
The sad thing is that the council is incapable of making hard decisions. The political system with a combination of district elections and term limits has created a paid full-time council that works part-time on public business (tough decisions) and full-time on political posturing (for the next office they want to run for.)
Since we’re already deep in trouble, I don’t think it’ll get any worse if we take some time to look at fundamentals. Can we rewrite the city charter completely, changing the council, pension fund rules, and all the rest?
Also, can we reach a consensus on core services?
Finally, can we think outside the box with regionalism. Are there core services that every South Bay city uses and desires, but which each city is providing independently? If there’s something like traffic planning that everyone needs, how about cutting and contributing, so that instead of 3 people doing it in house, you shift 1 position to a regional agency that provides services to all the cities, keep 1 position in house to coordinate and eliminate the last position. Get every city in the county on board, and you’ll have a great pool of expertise that can rotate its focus for all the member communities.
What about planning, parks, libraries, and other neighborhood services? Even law enforcement could benefit from economies of scale as something like a SWAT team and aviation unit could become a shared resource among several cities. Could Fire service also benefit?
We could have a dozen communities sink into a mire of mediocrity separately or instead see a new paradigm of regionalism link them together through common missions and shared resources.
> Finally, can we think outside the box with regionalism.
Saying “think outside the box” has become a cliche which basically means “look the other way and then you won’t see the problem”.
LOOK INSIDE THE BOX and you will see obscenely lavish and oppressive union salaries, retirement benefits, healthcare plans, and work rules.
Step number 1: OUTSOURCE. Priivate sector contractors will reduce the city’s salary and benefits expenses in many areas.
Step number 2: Re-read your history of the Ronald Reagan administration and re-learn that Ronald Reagan faced down a recalcitrant air traffic controllers union and fired them.
Step number 3: Unionization of public employees is fundamentally a violation of equal protection under the law for non-union employees and for the citizens of the city. Public employee unions are a de-facto and non-constitutional fourth branch of government.
While ordinary citizens are represented only by their legislator or council member, union employees are represented TWICE, once by their legislator and again by their union.
End the double representation. Probably, it will take ballot initiatives at the local or state level to accomplish this, but as Larry the Cable Guy says: “Get her done”.
In the current economic environment, there is NO SOLUTION that does not involve significantly reducing the amount of public money going to the union supperdish. NONE.
The cuts must be made.
The problem is not that union members are double-represented, but that they are SINGLE-represented. There is no collective group with enough political clout to oppose them.
As long as the unions control who gets elected, we’re doomed to live in a town where the average public employee makes more than the average resident, and has a gold-plated pension system, twice as many holidays, etc.
“The political system with a combination of district elections and term limits has created a paid full-time council that works part-time on public business (tough decisions) and full-time on political posturing (for the next office they want to run for.)”
Yeah, let’s get all the cities and the county working hard on banning plastic bags and happy meals! E pluribus unum.
C’mon Tina—the tough decisions are rarely made. They keep jerking around with BS programs and stupid stuff.
Which is why our city council members should serve only part time and be paid a stipend, such as in Santa Clara.
While our city council is busy banning plastic bags, opening pot clubs, and constantly ripping on city employees for all that is evil, and hiring a cop hating IPA, maybe they should take a step back and learn something from the Santa Clara City council (who serve for almost free) about how to correctly run a city. Santa Clara is on the verge of getting a billion dollar stadium paid for mosty by the 49ers, which will create hundreds of jobs, and now a huge Yahoo campus is moving to Santa Clara with over 12,000 jobs (Im sure San Jose will provide the housing).
http://www.mercurynews.com/politics-government/ci_14875839
Santa Clara is putting in $42 million to football stadium. Makes sense Yahoo would expand next to their existing location.
Please get your facts correct regarding the football stadium. The 49ers and the NFL are putting up 95% of the money for this project which will reap rewards for the City of Santa Clara for years to come.
http://www.scforprogress.com/get-the-facts
Could the mayor declare a fiscal emergency and rescind the outsourcing policy recently passed by the council? I know P.O. has been one of lone voices on the council pushing for meaningful outsourcing reform, but the union-backed majority is more interested in saving union jobs than retaining services at a lower cost. It’s obvioius that the union majority on the council wants the residents to “suffer” and eventually cry “uncle” and agree to pay more taxes to retain city service as long a they are provided by city employee, i.e., a union member.
Hey Pier,,,,You make it to the Cannibis and Hemp Convention in Daly City this weekend?
Here is a quote from this news article. “Medical marijuana users in Northern California lit up Saturday at the Cow Palace in Daly City, where vendors displayed bongs, vaporizers, hash brownies and other marijuana-related products. Organizers of the event at the state-controlled Cow Palace said they insisted on having an onsite medicating area before holding the expo.” Sounds like a good time was had by all.
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/04/17/state/n101003D97.DTL