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.
I liked your article in the Mercury last week.
Opinion: San Jose labor negotiations should be public
By Pierluigi Oliverio
Special to the Mercury News
Posted: 11/04/2009 08:00:00 PM PST
The current practice of labor negotiations being held behind closed doors in San Jose is bad business for the city. In the era of sunshine, all labor negotiations should be public so that residents can see, hear and attend them just like other public meetings.
Today, the only people allowed at labor negotiation meetings are professional negotiators hired by the unions, union officials and city management staff. The discussions that take place are not seen or heard by anyone except those present. The unions and city staff constantly accuse each other of “dishonest tactics” and “feeling disrespected” during these meetings — and because the public and even the council can’t attend, we have no idea who’s telling the truth. Negotiating in public would end this behavior.
Our budget deficit today is a result of decisions made years ago. While the council voted in public on the contracts, there was little or no public disclosure of details beforehand. The real decisions were made in closed meetings. Nor are there any transcripts of what was said that led to pensions, benefits and wages that are unsustainable.
In my view, if allowed to attend these negotiations, the public would not have tolerated pensions with 200 percent plus matches and other agreements.
If we continue the current practice, then I fear we will continue to reduce services and even end up in bankruptcy like our neighbor Vallejo.
At a minimum, we should tape
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these private meetings so there is a record of who said what.
The public should be aware of the full dollar amounts of all proposals from city management and unions through each stage of the negotiation. If the city is being unfair, everyone would know.
If labor is asking too much, everyone would know.
A public process would let us understand how we arrived at the outcome.
If both sides had met 40 times and could not agree, then the public would know that and would be more likely to support the council in imposing an agreement.
If one side canceled meetings again and again, which has happened, essentially refusing to bargain, then the public would know.
Last year, city union members paid $7,164,760.89 in union dues, and approximately half of that amount can be spent on political campaigns to support union-endorsed candidates or to oppose candidates who do not support the union’s goals.
You can see why elected officials are reluctant to make union negotiations public, since the unions oppose this.
Earlier this year, I posted an online survey with the question, “Should closed-door labor negotiations be made public?” and 74 percent of the 605 people who responded said yes.
If city management, unions and the council don’t agree to make negotiating sessions public, I would support collecting signatures for an amendment to our city charter and give voters the opportunity to decide.
I encourage you to attend today’s special City Council session at 1:30 p.m. in the council chamber, where this topic will be discussed.
PIERLUIGI OLIVERIO represents District 6 on the San Jose City Council. He wrote this article for the Mercury News.
“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.” Really? If we had back the almost BILLION dollars that was spent by you and your city council member on an unneeded new city hall, golf courses, and car races, there would be no deficit.
Those high profile projects you mention are small when compared to the salaries, pensions and benefits that are spent every year.
On another note I thought John L’s comments above were right on.
Steve—I agree that the expenditures you outlined were ill-advised at best—but they were voted on and incurred long before Pierluigi took office…so don’t throw him under the bus for others’ misdeeds.
I agree with you Johnmichael. I was just making the point that the blame should go around to everyone. Pier stated that the employees are “why we have a structural budget deficit”. That is only part of the problem and the other part is out of control spending for pet projects.
Pier,
Thanks for your good sense in representing us. You do, however, pit yourself against a bunch of intransigent self-serving bureaucrats.
It’s certain that increasing sales taxes is not a viable solution – residents would never vote for throwing yet more dollars into the black hole of city finance.
To the contrary, I’ll bet that your fellow councilmembers will vote to cut high visibility services… fire stations, library hours, etc. That’s the standard blackmail technique that’s been employed over the years.
As for getting to the root cause of city budget miseries, it cannot be done with closed door negotiations with the unions. Until residents are fully informed regarding labor costs and benefits, San Jose is doomed to be a second rate city.
Read my lips—ALL CITY BUSINESS SHOULD BE CONDUCTED IN PUBLIC…yes, even personnel matters. They are PUBLIC SERVANTS, or they are supposed to be.
JMO,
Very true~
San Jose has 1,000,000 residents. Add a $100/year fee to each resident for living in San Jose. Now you have $4,000,000 surplus. Problem solved.
That is interesting however the council would probably exempt head of households with 4 or more people, exempt families of a certain income levels, exempt those that are retired on a fixed income, exempt those who live in SNI neighborhoods, etc….
This would leave those of us who still have jobs and fund our own retirement to pay the tax.
Not sure how the city would know how many kids people have unless they went door to door.
> The presentation contained buzz words like «engaging stakeholders,» «peer review,» «finalize a work plan.»
Did you take off your shoe and throw it at the presenter?
Why not?
> 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.
May I make a suggestion:
Go down to the video rental store and rent all the back episodes of “The Apprentice”.
Study Donald Trump’s techniques for firing people.
Look in the mirror and practice: (purse your lips like you’re sucking a lemon) “You’re fi-wed. You’re fi-wed. You’re fi-wed”.
Call for a special session of the city council and ask the department heads to present departmental budgets with fifteen percent cuts. Departments headed by especially ugly people should be required to make twenty percent cuts.
To each department head who fails to comply, say “You’re fi-wed”.
Tax Man, more taxes to feed the beast are definitely not the answer. City salary/benefit growth has severely outpaced inflation. The council gave out generous increases during the boom, in order to “compete” with private sector employers in attracting talent. But, unlike the private sector, the city won’t cut during down times.
And I find it especially repulsive that they bandied the phrase “true zero” at the meeting when referring to the increases that city employees gave up this year…as opposed to “false zero?!”
You’re on the right track PLO. But quit looking for new revenue sources. The solution is on the spending side. Period. Employee wages and benefits need to be reined in. Emphasizing “medical” marijuana fees and gambling fees only attracts the lowlifes that wind up using expensive social services. It’s a net loser.
I sincerely hope that anyone who believes folks who use legal medical marijuana, which has acknowledged benefits of stimulating appetite and helping reduce nausea, never have to use it themselves. (And to boot then be judged and called a lowlife by others who probably are not be walking in the same shoes.)
Tina
I agree 100% Tina. Cancer patients are far from low lifes.
On page 5 of the presentation there is a slide showing the break down of the $96.4 million deficit. One of the items listed is “Estimated Pension Plan Increase” at $51.70 million, making up more than half of the deficit.
Are we finally starting to pay the price for the lavish pension benefits granted during the dot-com bubble?
The pension fund deficit, we have been told, is the result in market downturns. That can only be true if the funds were too heavily invested in stocks.
P.O.—has any report been made public explaining why the pension fund lost so much value? Has any investigation even been done? Is this a repeat of the $60 million bond loss in the McEnery era?
Not exactly what you are looking for but this may help (page 6):
http://www.sanjoseca.gov/employeeRelations/labor/SupplementalCouncilMemo2010LaborNegotiations.PDF
Forgot to mention that this Wednesday at 11AM there will be Veterans Day Ceremony followed by a parade. Your attendance is one way to honor our Veterans.
Pier,
I see you and the city council are voting Tuesday to make Styrofoam illegal for gatherings on city property. Are you voting for or against this new Styrofoam ordinance, and where is the manpower going to come from within the city to enforce this new city law if passed.
http://www.mercurynews.com/news/ci_13743470
Your idea to protect our environment that all of us live in is to not support anything that might require enforcement? We should just flood our world with non-recyclable crap and let the next generation wallow in our waste? Good plan.
You must have some mystical powers of mind reading to extrapolate that about me when I don’t believe we have ever met. I recyle almost everything possible and I even have a compost pile for my vegetable waste. I drive a car that gets about 35 miles per gallon in the city. I do not think this syrofoam ban is a prudent idea at this time considering what the city is facing. I never suggested recycling styrofoam, or anything else for that matter, is not a good idea. I just asked where is the manpower coming from to make sure people comply with a new law when the city is already laying off employees. Go back and reread my original post.
But styrofoam is not usually recycled. Most has food waste on it, and when it does, it is removed from the recycling stream, resulting in it remaining in our environment for centuries. Plus, the manufacture of styrofoam is not environmentally sound, utilizing large amounts of petroleum. You seem to be suggesting that bad economic times are an excuse to do nothing to preserve the environment and hope for the best. In fact, the cost to all of us of enviromental degradation is always greater than the cost of prevention.
How many things should the city ban that can’t be easily recycled?
The entire Council voted to ban it for large events on city property like Downtown festivals. Next we will be looking at banning it citywide next year. After that it may be something else like Disposable Diapers that I blogged about previously.
Why not fluorescent light bulbs which are filled with mercury and end up in the landfill and water?
That has to be at least as bad as diapers, if not worse.
Summary:
Fire all the city employees! Who needs ‘em? And why doesn’t somebody do something about all the potholes in the streets?
Saying everything significant regarding bringing in revenue is on table is false. Adjustments to the way development taxes are assessed to our commercial/industrial customers could bring in revenue possibly exceeding any sales tax gains. By leveling the playing field to these customers would bring in several million a year by redistributing the burden to those most able to afford increases would do this. Also, by eliminating the honor system for submitting construction cost would also increase revenue. This is not even on the radar as far as I can see. But the managers who are custodians of this tax assessment have obviously not reached down to the underlings who have known this for years.