Oliverio for Supervisor 2018

Independent - Transparent - Fiscally Responsible

Survey: Budget Deficit Tradeoffs

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This year, the San Jose City Council is forced to make drastic cuts. Unfortunately, the city of San Jose has had a deficit for the last decade even before the Great Recession. In fact, even without the recession, San Jose’s financial obligations are significantly higher then revenues coming into the city.

As a result current elected officials are left with trade offs often having to pit necessary services against each other. This year the deficit is $118 million. This is more then the entire library, transportation, planning, code enforcement, information technology, city attorney and public works departments combined.

The purpose of the survey is to gauge your thoughts about what means the most to you knowing that difficult decisions are going to be made and for you to share your thoughts on how the city can save and make money.

For example, there are alternative cost savings ideas that I support like second-tier pensions for new employees the taxpayer can afford, selling the Hayes Mansion, selling one of three golf courses, requiring affordable housing to pay property taxes, outsourcing cleaning/maintenance to save money, capping accrued sick leave payouts, to name a few. These will take longer to implement, however. If our City would have considered these items when I first discussed them, we would benefit from the cost-savings today.

This survey covers choices that must be made by June 4. The Council and all non-union personnel have taken a 10 percent pay cut and have requested that all of the 11 employee labor unions do the same so we can bypass massive layoffs—thus we would be able to provide expected services to residents. A 10 percent pay cut from all employees will help; however we would still be left with an approximate $60 million deficit.

The survey closes May 30 at noon. Survey results will be published on May 31 on SanJoseInside.com

CLICK HERE TO TAKE THE SAN JOSE CITY BUDGET SURVEY.

Dear Chief Davis

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I hope your weekend was enjoyable. I wanted to let you know that I believe that you have a very difficult job and I wanted to say thank you for your nearly 30 years of service to San Jose.

Managing an organization of approximately 1,400 people, public or private, is a challenge. It is impossible to make everyone happy internally or externally all of the time, or even some of the time. Overseeing a Police Department is one of the most difficult and demanding jobs one could have because of the high level of public scrutiny. As I have heard you say many times at the police academy graduations; wearing the police uniform puts the officer in the spotlight and all eyes are on the police officer. Our police are judged by everything from their words to the tone of their voice to body language.

With the retirement of Assistant Chief Katz there is a void in the police department leadership ranks. SJPD has the privilege of having many skilled men and women through the ranks who work hard and are committed to the safety of our residents. These dedicated police officers can and will rise to the level of leadership as needed. This is the benefit of having high standards of recruitment and vetting during the police academy and field training program. These high standards are a result of the investment of approximately $129,000 made by the city of San Jose into each new officer’s training and thus we risk a loss of approximately $10 million with the layoff of 80 of our most recently hired police officers.

As you know I have been on the Council for three years and in that time there has been challenging public discourse around SJPD. Each time SJPD needed an articulate speaker, for example on police records, or a technical speaker on the Bobby Burroughs police sub-station, and one person’s performance stands out. Again and again, whether at a council meeting, committee meeting, community or special meeting, I remember one person in particular always being there by your side or by himself defending, explaining and promoting the SJPD. This person was always on target and therefore respected by many officers from all backgrounds.

That was and is Capt. Gary Kirby. Time and time again Capt. Kirby rises to the occasion. Chief Davis, I believe you have a unique opportunity to promote from within a respected member of the SJPD. From my perspective Capt. Kirby is just missing the title of “Assistant Chief” since he already performs by your side and has lived up to the term, “got your back,” but the “back” to me refers to the entire police department.

Thank you for your consideration Chief Davis. Stay Safe.

The Center of our City Center

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Last week I attended evening budget meetings in Districts 3 and 5. The center of our city (District 3) had a high turnout from residents who find great value in community centers. Particularly, the Gardner and Washington Community Centers. Both facilities provide a place to go and where residents can be positively impacted. Classmates and friends of mine from Willow Glen High grew up in the Gardner area, formerly known as “Barrio Horseshoe.” It was a problematic neighborhood with many gang issues.

My friends in Gardner managed to stay out of the gangs because their parents would physically discipline them if they hung out with people involved in gangs, and kept them busy with chores and work. David Pandori and Cindy Chavez both worked hard to make improvements in the Gardner neighborhood and should be complimented for turning that neighborhood around with the help of passionate residents like Rudy Martinez. Also, praise to my colleague Sam Liccardo for continuing the Pandori/Chavez legacy in Gardner.

The other facility is the Washington Youth Center located in the neighborhood around Washington Elementary and Sacred Heart church. This is another area that has been dealing with gangs for decades. The Redevelopment Agency funded the construction of the Washington Youth Center and the adjacent library along with physical improvements to Washington Elementary. However the general fund is responsible for the day-to-day expenses. Many came to tell their stories of what these facilities meant to them. Some stories brought people to tears as they had family tragedies but also success stories of their children.

Some attendees came from other cities to advocate for our Therapeutic Services program that enables kids in wheelchairs to participate in sports like basketball. They come from other cities like Cupertino and Monterey since surrounding cities stopped offering these services.

There were those who asked, “Why did we ignore the structural deficit all these years?”

Many expressed their opinion that public safety unions should accept wage cuts to save city services and binding arbitration was unfair. Pastor Sonny Lara asked, “Why are people so generous with money for tragedies in other countries but we do not donate to our own local community?” My favorite quote of the night: “We need to stop electing politicians that promise us everything!”

If there was one theme in the District 3 budget meeting it was to keep community centers open. It was stressed by many that community centers and libraries save lives in certain neighborhoods and that these facilities act differently than in Almaden, Cambrian, Evergreen, Rose Garden and Willow Glen. Many felt that community centers and libraries should be open more hours in neighborhoods that have higher needs, which could be determined by crime rate, poverty rate, etc..

I was asked afterwards by several young people who were good role models if would I support their specific community centers over others. I said, “The easy answer is to tell you yes and then walk out the door and vote no.” However, I continued, “the idea of, should some neighborhoods get more services then other neighborhoods is worth debate.” I then asked the youth if they cared who cleans City Hall or would prefer that their community center stay open. They chose the community center.

I believe we should maximize cost savings in areas of our city that do not directly touch residents before cutting services that impact residents. Otherwise we are saying, “Sorry young people, the status quo on cleaning city hall is sacred and better then providing you services that would directly impact your future.” If you do not like this trade off of cleaning staff versus community center employee, then how about community center employee versus librarian or community center employee versus a police officer? Take your pick. Side note: Laying off new police officers is a double loss since we lose the investment/cost to recruit, test, background, academy, field train the new officer.

But let’s get back to the debate on providing more services to certain neighborhoods and less to other neighborhoods. I would acknowledge that higher needs exist in certain neighborhoods and that prevention is less costly than the worst-case scenario of incarceration. There is a disconnect between costs and responsibilities of the city and final costs that may end up on the County or State, but there is also limited sharing of revenue to achieve these goals. On the other hand, I do not believe every person in a certain neighborhood or zip code is affluent.

Within each neighborhood perceived to be upper-middle income, there are those who rent, have a mortgage they are struggling to pay, long- term unemployed, a single mom with kids, seniors on a fixed income, disabled veterans, etc. I assume these residents and specifically youth would want to have the opportunity to read a book or partake in an activity at a community center.

In addition these perceived upper-middle income neighborhoods pay higher property taxes and may feel that they should at least have equal neighborhood services. Personally, I think each neighborhood should get equal infrastructure like sewers, streets, sidewalks and streetlights. Equity in parks is more difficult because of the build-out of nearly all open space and the cost to procure it at today’s prices.  (Such a tragedy that we lost out on approximately $90 million in park fees from exempting affordable housing from this fee.) When it comes to what amount of neighborhood services for each zip code, I am open for debate and would like to hear your views.

Is it fair to provide more service to specific neighborhoods? Is that Marxist? “Each according to his abilities to each according to his needs.  Should government be neutral and provide exactly the same to all areas?

When people buy a more expensive home does that mean something? People choose to buy or rent in areas based on surrounding amenities and pay a price determined by other property owners and renters. Do we let that be the barometer?

Mirror, Mirror on the Wall

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Last Wednesday night, the Public Safety committee held a special meeting regarding our police officers. The city manager began by sharing the amount of effort and outreach that has transpired the last few months with city initiatives with regards to our police department.

For the last two years, certain individuals have been lambasting our police force with charges of racial profiling and excessive force. Our police force has more than 400,000 engagements a year with San Jose residents and 99.8 percent of those have no complaints. The City of San Jose has an internal affairs department and an Independent Police Auditor (IPA) for complaints about the police department. With a city as large as ours, we are aware that complaints will no doubtfully happen. However, the complaints are few and far between, and that is something the city can be proud of.

Over the last two years I did not rush to judgment on condemning our police but rather listened to all points to view. As a Councilmember in a representative democracy I represent my entire district population and not just those who attend meetings as 99.5 percent of residents are not able to attend meetings or more so do not want to attend meetings.

Several members of the public spoke before the council and were generally supportive of the police. The speakers were San Jose residents from the West Side and the East Side who appreciated the efforts of our police force. One theme of change however was lengthening the rotation of a police officer from six months to some time longer so as to build even better relationships with residents.

The length of rotations is an issue that cannot be changed with a snap of the finger but rather a negotiation with the police union. I look forward to hearing more about the pros and cons on this specific matter.

Daniel Pham’s father spoke emotionally about his deceased son who suffered from mental illness and his loss. Dealing with the mentally ill even with specific training is very difficult as it is hard to reason with a delusional mind in a stressful situation. My friend from elementary school who suffered from mental illness committed suicide last year thus I have some understanding of the challenges with mental illness.

Another interesting point was raised by two different speakers. One was a Christian biker who was dressed sort of like a Hells Angel. He mentioned that his group had been stopped time to time by the police. He said if he was a police officer he would stop the bikers as well. He pointed out, however, that you should speak to a police officer the way you would like to be spoken to, like the Golden Rule.

As someone who grew up in San Jose I was always taught by immigrant parents to be polite to the police and I have been. It is only since being a Councilmember that I heard a person can verbally throw profanities at a police officer and that is acceptable. Well, it would not be acceptable with my Mom and Dad. An African American speaker who himself pointed out his large Afro said that he has been stopped by the police for decades both on the East Coast and the West Coast based on his appearance.

These two speakers got me thinking that is not just police stopping individuals but also the residents who call the police. Police respond to calls from our residents about suspicious activities and people. Therefore really all of San Jose is responsible. So, when you hear those that are critical of the police they are also critical at the character and prejudgements of our own San Jose residents and need to look in the mirror.

As far as our new IPA, I voted no along with Mayor Reed and Councilmember Constant. We had four well qualified candidates to choose from and I preferred another candidate. I do wish our new IPA great success for the 2.5 year term and beyond.

It is with deep sorrow that Chief Katz will be leaving/retiring from our police force. A straight shooter and a gentleman, he will be missed. My only request is that Captain Kirby please stay for the sake of stability and morale. I would make the same pitch to Chief Katz but I think it is too late.

A Dollar Borrowed is a Dollar Earned

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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

Different Viewpoints on Medical Cannabis

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Last week, the Council finally discussed my memo and voted to have staff come back with a draft ordinance for final review regarding medical cannabis. Currently, 14 states have legalized cannabis for medical purposes and 14 other states are considering legislation now. I attached a memo from the US attorney general saying that the federal government will recognize state laws regarding legalization of medical cannabis and additionally, I provided an 11-page document from State Attorney General Jerry Brown that provides guidelines to municipalities on implementing ordinances that regulate medical cannabis collectives/cooperatives.

Even if San Jose chose not to adopt an ordinance, people have the legal right to cultivate and form marijuana collectives for medical purposes under Prop 215 today.

Since my memo was heard at the Rules Committee meeting last October, I have spoken with many San Jose residents. Their comments have commonalities that could be broken into four different areas.

One viewpoint from a handful of residents is that cannabis is a terrible drug that ruins people’s lives, and all efforts should be into keeping it illegal even for those that have painful afflictions like AIDS, cancer and MS. Some felt that under no circumstances should anyone use cannabis to numb the pain since we have prescription drugs for that. Their views are strong and are often not open to discussion, as in the case of a gentleman who held this view who hung up when I called him after receiving his email.

I understand that people may have experienced a friend or family member that abused illegal drugs or they are morally opposed to their use; however they do not seem to have a problem with alcohol or tobacco since they are legal. These folks also did not find a problem with prescription drugs. In the cases of alcohol, tobacco and prescription drugs we know that some people abuse them and this abuse comes at great cost to themselves, family and law enforcement.

Others called with personal stories of family or friends who had died of a painful disease years ago. They were told by a doctor at that time to get some marijuana and so they went out and purchased marijuana from a drug dealer for their ill family member. One 80-year-old resident told me that his family bought marijuana for his brother 25 years ago. He said the last 10 months of his brother’s life was good because of cannabis and his brother only went to the hospital just a few hours before he finally died of cancer.

Another group of residents were supportive of medical cannabis or indifferent but they did not want to see these facilities adjacent to residential areas and felt that there should be some regulation in addition to zoning. My direction in my memo was to place the dispensaries in industrial areas which are away from residential neighborhoods, but Council gave planning staff some leeway for the June ordinance that might include medical offices or areas zoned commercial, but definitely away from adjacent residential. Alcohol is distributed in nearly 1,300 places in San Jose and over time seem to just blend in with the rest of our commercial business.

As far as regulation, one that I am keen on is open book accounting of these collectives that allows for financial audits as needed.

Others were in favor of legalization of cannabis for any purpose. They felt that our country had tried prohibition of alcohol from 1920-1933 and was unsuccessful. The only thing prohibition did from their view was to make organized crime wealthy and create health issues with moonshine. They had strong feelings that people will do as they wish and the wars on drugs has been unsuccessful which has only filled the pockets of organized crime. Therefore, they wanted legalization and taxation like alcohol.

They felt prison cells should be reserved for the those committing violent crimes and not possession of marijuana. A mother told me about her 20-year-old son in college, and said that it is easier for him to get marijuana then it is alcohol, since alcohol is regulated.

Which ever viewpoint, issues like this stir up interest in local government. Which viewpoint do you hold?