San Jose’s incubator program will not be audited as Councilmember Sam Liccardo was hoping, meaning questions about how millions of dollars were spent, or misspent, will likely go unanswered.
The Rules and Open Government Committee voted unanimously Wednesday to dismiss Liccardo’s request that city staff look into the business start-up programs that were funded by the Redevelopment Agency and continue to be managed by San Jose State University’s Research Foundation.
Liccardo’s push for an audit came after he found a study that went unseen by most city officials for two years and was highly critical of the incubator program. The report states that RDA spent more than $30 million on incubators over a 15-year period, yet annual revenue to the city from 1994 to 2009 was only $280,980, or about $4.2 million total. The study also said that only 11 percent of the 288 companies that “graduated” from the incubator were still in business and located in San Jose as of 2009.
“I’d like to believe that after the city has invested over $32 million in economic development project, and we’ve seen palpable evidence of mismanagement and incompetence, that we’d have the courage to ask for an independent evaluation of the program,” Liccardo said Thursday. “No one takes joy in being audited, but where you see sufficient evidence of problems, we should be willing to ask questions that might give us uncomfortable answers.”
How the written report never made it to the Community and Economic Development in 2009 remains unclear. After numerous committee deferrals, however, city staff did give a verbal report that glossed over some of the study’s gorier details.
Oversight by the SJSURF, which is headed by Mary Sydney, was poor to non-existent in some cases, according to the report. The report noted that annual tracking of businesses by the foundation ceased in 2004.
The committee determined Wednesday that an audit was unnecessary because the city no longer funds incubators outside of lease agreements, which are soon set to expire, and staff’s time and resources are already stretched thin. The council did recently approve paying the $400,000 lease for the BioCenter through next summer. An additional incubator lease agreement runs through 2014, but Mayor Chuck Reed has said that the city plans to extract itself from that agreement.
The committee members on Wednesday included Mayor Chuck Reed, Vice Mayor Madison Nguyen, Pierluigi Oliverio and Rose Herrera, who as an alternate sat in for an absent Pete Constant.
What an absolute and complete travesty. Confirm this is the same mayor and board that yells for sunshine and transparency?
So we have the City spending over $2M/yr over a 15 year period, and getting in return $18,700/yr, and we continued to do this for 15 years?? After the first 3-5 years, this was not recognized as being a bad deal?? And after 10 yrs the City continued to hold out hope that this would be a viable plan?
Was this genuinely about creating an incubator for new business, or was this more about paying for developer’s vacant speculative office space?
This absolutely deserves full disclosure from the current council, some explanation from a former RDA offical with mayorial aspirations, and definitely worthy of a Grand Jury report.
I was trying really hard to believe that our Mayor and Council were honest, if not a little misguided. This action shakes my belief to the core.
Here we go, “fiscal Emergency”. Blame all the problems on Public Safety Pensions, yet you don’t want to air your dirty little money games and loses due to poor management.
Then don’t hide behind your transparency BS and just put out another ballot measure to punish current and retired employees.
No need for audit. The city has plenty of money coming in on the backs of city workers. It’s like when you have an unknown amount of money in your wallet. How many of us take it out and count it? You only count, when it’s getting thin and you want to do something. (Do I have enough?) The city has surpassed its goals of destroying the wills of her work force.
I’m curious as to why Constant wasn’t available. Isn’t he Mr. fiscally responsible? Truth is this stinks. what was the City Mgr. response to this cover up? Now we start to see the reasons behind the city miss management. I think we need sunshine on the entire city budget. I would like to see a listing of all city supported non profit organizations.
No sunshine, no transparency, no accountability.
IncubatorGate
Anyone knows who the 4 people are that sit on the Rules and Open Government Committee?
Boy does that answer your question why we get no audit or answers!
Rules & Open Government Committee
Meets: Each Wednesday of the month at 2:00 P.M. in room W118 & W119
Membership: Mayor Reed, Chair
Council Member Nguyen, Vice Chair
Council Member Constant
Council Member Oliverio
“staff’s time and resources are already stretched thin. “
Is this the same staff that somehow found the time to audit the payroll records of the relatively few city employee/military reservists who served their country in combat zones? I guess tabulating the pocket change (relatively speaking) involved in that effort had priority over tracking down the millions squandered by those who served not their country, but their local politicians.
By the way, am I correct in assuming we no longer have an office of the City Auditor?
This decision, distasteful though it may be, is quite representative of the blue plate special at Chuck Reed’s political diner: government surplus baloney, served atop a bed of faux integrity, complimented with a side of crisp arrogance. Bon appetit!
Once again, poor performance gets rewarded by the City. Here is a perfect opportunity to determine what went wrong and why we wasted so much money, but the Council Rules Committee wants to hide the facts from public. Shameful!
” The report states that RDA spent more than $30 million on incubators over a 15-year period, yet annual revenue to the city from 1994 to 2009 was only $280,980, or about $4.2 million total. The study also said that only 11 percent of the 288 companies that “graduated” from the incubator were still in business and located in San Jose as of 2009. “
San Jose’s incubator program that Council refused to audit is latest example of many millions city taxes wasted by Mayor, Council and City Manager because they are not doing their jobs and again want to hide that they are not accountable to voters and are responsible for $30 million in wasted taxes
Who on City Manage’s staff was responsible for incubator program oversight ?
Is this another Economic Development’s winning personality Paul Krupko oversight failure ? Krupko was also responsible for Team San Jose oversight failure and hiding millions taxes wasted on economic development projects
Was that why Krupko was fired or another city scandal or millions more taxes wasted yet to come out ?
What Council members were responsible for oversight over last 15 years? Seems like most of Council members and Mayor Reed had a part in multiple oversight failure
Sam Liccardo was Rules Committee that has supposed to oversee economic development spending, Team San Jose and incubator program but is now calling for audit to hide his lack of oversight prior to his Mayor’s campaign
Is that why city does not want an audit to show Council and City Manager’s gross incompetence to taxpayers and voters ?
Numerous city oversight and accountability failures have occurred in economic development, city grants, low income housing development, non profits , corporate subsidies etc San Jose’s non government tax spending gives taxes to and $10’s millions taxes for non essential projects and uses with most wasted each year Why has city government have continuous non government spending oversight failures for at least the last 6-8 years or so would say for decades ?
Why does city lease millions sq ft city property at below market rates? Who is responsible for city property lease oversight and non collecting millions in revenue ?
Why are city employee unions not publishing list of millions wasted taxes ?
Do they also want to hide their part in millions taxes wasted for some political reason ?
San Jose taxpayers deserve to know which political insiders got city taxes, how many millions taxes were wasted and who is responsible
Wow! Solyndra executives must really be kicking themselves. They failed to perform due diligence when they were searching for an easy mark to fund their crooked scheme.
But how were they to know that San Jose’s Redevelopment Agency is even more sloppy and careless with taxpayer’s money than Obama’s ‘stimulus’ programs?
” Rules & Open Government Committee
Meets: Each Wednesday of the month at 2:00 P.M. in room W118 & W119
Membership: Mayor Reed, Chair
Council Member Nguyen, Vice Chair
Council Member Constant
Council Member Oliverio “
Anyone know how vote went to audit $30 million spent on on incubators ?
Did all vote for to not audit and hide who was responsible for wasting $30 million ?
Shameful, disgusting and hypocritical politicians especially for if Reed and Oliverio voted no audit since they talk all time about sunshine and open government but apparently they vote for no accountability, back room, hide tax spending city government
Q: How do you know when politicians are lying?
A: When their lips are moving or when they issue a public statement
4-0, all voted no audit. Thank you mayor
“I’d like to believe that after the city has incested”
Incested? Sam’s Freudian slip or lisp?
I see “invested” not “incested”.
Was this merely a SJI typo that has now been corrected?
They clearly do not want their dirty laundry out in the open. I just find it funny that city employees salaries are open to the public and the money spent by the city is the most covered up thing. Makes you wonder if those coffers are really bone dry like they say they are.
Reed and his minions are nothing but greasy, slimy politicians looking out for themselves. Were it up to me, Reed would be banned from holding political office in the future.
GEE ,IMAGINE THAT!!!!!! THE CITY WASTES 30 MILLION DOLLARS BUT DOESNT WANT AN INVESTIGATION……HUH???I GUESS THEY REALIZE THEN THEY WOULD HAVE TO OWN UP TO THEIR OWN INCOMPETENCE AND MISMANAGEMENT.IT WOULD MAKE IT THAT MUCH HARDER FOR THEM TO CONTINUE TO BLAME CITY EMPLOYEES FOR THE SHORTCOMING OF THIS CITY.YOU DONT HAVE TO LOOK ANY FURTHER THAN THE PEOPLE WHO VOTED AGAINST THE INVESTIGATION :THE MISERABLE MAYOR REED,THE PUPPET M. NGYUN, THE FRADULANT P. CONSTANT,THE JOKE P.L.O. HOPEFULLY NOW THE PEOPLE WILL RISE UP AND SEE THIS COUNCIL FOR WHAT IT IS……….. AP PATHETIC “IN OVER THEIR HEADS” GROUP OF IDIOTS
could not have said it better, rumor now is they want to attack the retired employees!
Their COLA, EVEN AFTER they ATTEMPTED TO NEGOTIATE IT LOWER FOR 5 YEARS. Approved by your very current and past councils and their medical benefits among other items which they KNOW is illegal and yet they are willing to pay millions OF OUR MONEY in lawyer fees. THIS WHAT THEY ARE ABOUT! PETE C. WILL LOSE HIS AS WELL YET HE DO NOT SEEM TO CARE! GUESS THAT PHOTOGRAPHY BUSINESS IS STILL PAYING WELL. ARE YOU GOING TO GET PAID TO TAKE PHOTOS OF YOUR FORMER / FELLOW OFFICERS AGAIN FOR ANOTHER PD YEAR BOOK WITH THE REMAINING 800 OFFICERS NEXT YEAR?
What happened to “OPEN GOVERNMENT”? Mayor Reed has lied about everything,he is the worst kind of snake,because he says one thing but does another.He is not interested in an audit because he knows that he is at the very least partially responsible. He has not benefitted this city one bit,but he has helped himself immensely.He is moving forward with his plans for a ballet measure,without even looking at or considering the plan that was presented to him by the alliance of unions.He sure as heck doesnt want to discuss their plan out in the open,like was suggested. He says he doesnt care if city employee “morale” is in the dumps,well what kind of effort do you think that going to get you?? Alot of our public safety are already leaving for safer & more appreciative citys. Along with the training & expertise that they received here………what a waste of money and experience.this Mayor and Council have killed this city. Absolutely the worst Mayor and Council ever.I have become accustomed to having dig for answers rather than just blindly believe our pathetic Mayor & Council