Oliverio for Supervisor 2018

Independent - Transparent - Fiscally Responsible

Drama and Trauma

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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.

Cannabis, Arizona, Fire, Golf and Google

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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.

Support Our Mayor

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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.

2010 Budget Trade-Offs Survey Results

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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.

Walk in Their Shoes

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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.

Deja Vu: Back to 2002

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In 1993, city staff began looking at selling the Municipal Water system, which the City of San Jose currently owns. Municipal Water covers approximately 10 percent of the city serving portions of Council districts 2, 4 and 8. The main service provider, San Jose Water Company, a private company, provides approximately 80 percent of San Jose residents with water. The remaining 10 percent of water is provided to residents in District 2 by another private company, Great Oaks Water.

The staff report that started in 1993 was completed in 2001 and finally made its way to Council in 2002. (Hope we can move faster than this when it comes to selling the Hayes Mansion, Old City Hall and one of three golf courses.) So on May 21, 2002, by a 6-5 vote, the council directed staff to move forward with negotiating a 30-year lease of the San Jose Municipal water system to the San Jose Water Company. The ayes were Dave Cortese, Pat Dando, John Diquisto, Ron Gonzales, Chuck Reed and George Shirakawa. The nays were Nora Campos, Cindy Chavez, Forrest Williams, Ken Yeager and Linda LeZotte.

I think the basic question is, “Should San Jose provide water to 10 percent of the residents when 90 percent is being done today by the private sector?” There are some advantages for the City to own a public utility, like lower rates then those of who get water from private water retailers since the city does not charge those residents a franchise fee and there are no shareholders to pay. Yet those same property owners have an assessment on their property taxes to pay for bonds for Municipal Water. Another positive is being able to get water from Hetch Hetchy for North San Jose since Hetch Hetchy will not sell water to private utilities. However even with a public utility water from Hetch Hetchy is not guaranteed and must be negotiated from time to time.

The cost to run Municipal Water is $22 million annually and employs 30 full time employees whose costs are covered by the ratepayers, not the general fund. Municipal Water transfers $815K a year to the general fund to pay overhead for a portion of salaries for people who support Municipal Water in other departments like HR, attorneys, payroll, etc.

Prior to passage of Prop 218 in November 1996, San Jose and other cities could charge more for services and make a profit to pay for other city services. Prop 218 was given as the main reason our negotiations that started in 2002 fizzled. However, if we had sold or leased Municipal Water prior to the passage of Prop 218 it would have been a different story. We discussed this item during our budget hearings this week. This is where the Council does a deep dive into specific department budgets. The structural deficit has renewed our interest in looking at selling or leasing the Municipal Water system.

San Jose Water Company would like to buy the Municipal water system and has offered the city an upfront payment of $54 million and allowing a franchise fee on the San Jose Water company which would bring in approximately $4 million to the general fund each year. Or a lease arrangement where they would pay $25-40 million upfront depending on the terms and length of the lease. The upfront payment could be used to pay off outstanding bonds and the balance into capital improvements like street paving. Another issue is what would happen with the current 30 employees? Would they transfer over to San Jose Water company and retain all of their seniority, compensation and benefits?

Personally I think there is an advantage in San Jose controlling recycled water as this allows the city to control its destiny on growing jobs for the long term. But I am not sure we get the same advantage by being a water retailer where we are not allowed to make a profit to fund core city services and be on the hook for all the future maintenance of that system.

Click this link to participate in the 2010 San Jose Budget Trade-Offs Survey, which is is still open.