Oliverio for Supervisor 2018

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And This One Time at … Family Camp

September 6, 2011 By Pierluigi Oliverio

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San Jose residents have been heading south to Family Camp, located not far from Yosemite, for more than 30 years.

Did you go camping over the three-day weekend? Camping is a time to enjoy nature and the adventure of the great outdoors. Last week, I attended a community meeting about San Jose Family Camp. There were approximately 25 residents who all appeared to be Family Camp boosters. They expressed support for Family Camp, recalling fond memories that for some dated back approximately 30 years.

The City of San Jose started providing this campground in 1974 and it is located just outside of Yosemite. Family Camp is not in the City Charter. However, neither are crossing guards for schools, which have been provided since 1944. The city of San Jose does not own the land;  instead it leases the land from the federal government and has built structures for camping—much like some ski resorts that lease land from the federal government and build structures. Of course, if the fees for skiing do not cover the costs to operate and maintain the ski resort than it would cease operations.

By direction of the City Council last year, the nightly rates were increased for campers so that the city could get the camp to be revenue neutral, or 100 percent cost recovery. In 2007, Family Camp was 67.4 percent cost recovery and this year the forecast is for 95.7 percent.  On average, 5,000 people partake in Family Camp each year and 70 percent of them are San Jose residents.

Getting to cost recovery is good, because this would remove the subsidy from the general fund. However, the camping structures need to be repaired and modernized. That money could come from the general fund, but it is unlikely since those dollars compete with police and library staffing. The Measure P bond fund—passed by voters to pay for park improvements—can only be used on city-owned land, so that rules out spending the money three hours away from San Jose.

This leaves the Construction and Conveyance Tax (C&C), which is generated from the buying and selling of property in San Jose. These funds are restricted in the City Charter for park equipment, library materials and fire station equipment. A small portion of C&C revenue funds park maintenance, but the bulk is put aside to pay for physical things. Allocating these revenues to Family Camp would remove funds from replacing park equipment, new books or computers for libraries or new equipment for a fire truck. The challenge for Family Camp boosters is to explain to San Jose residents who do not utilize this unique facility on why tax revenue is better spent outside of San Jose instead of within San Jose.

To the credit of the Family Camp boosters, they have volunteered many hours to making improvements at Family Camp by donating material and labor, including doing advanced electrical work. However, there is a limitation to their good deeds. That limitation is an estimated $9-16 million in improvements to physical structures at Family Camp.

The standard alternative (like many other things in San Jose) could be to rely on voluntary contributions from San Jose residents, camp lovers and corporations. However, $9-16 million is a much higher bar than $6,000 for the fountain at the Municipal Rose Garden, or $60,000 city-wide for dog poop bags as examples. From my perspective, it would be fine by me if a company logo was required on each camping tent for monetary donations.

Another alternative would be to partner with other cities in the county to make the improvements, so that we have one joint facility. Yet another option may be charging campers a fee above and beyond the 100 percent cost recovery and committing those funds to the capital improvements, which would take a long time and possibly discourage campers.

Finally, the last option would be to walk away from Family Camp and let it close.  If no other organization wanted to take over the camp, the city of San Jose would be on the hook for dismantling the camp, which is estimated in the millions. If this were to transpire, I would suggest not answering the phone when the Feds call.

Sometimes I am approached with an idea from a person who thinks the city should provide a new service. I think it is best to manage expectations and let people know up front that adding a new service will not happen while the current portfolio of services is being cut.

Filed Under: Uncategorized

Want to Get Paid? Get in Line

August 29, 2011 By Pierluigi Oliverio

The San Jose Redevelopment Agency’s financial obligations were discussed and voted on last week. The final chapter of RDA will be decided by the State Supreme court sometime before Jan. 15, 2012. Should RDA ultimately end, the state wants to know all of the enforceable obligations. Everything needs to be listed, from bond to lines of credit to legally binding contracts not yet paid out, including debt for affordable housing.

Rising out of the ashes to manage who gets paid will be a successor agency consisting of seven members that will oversee repayments and allocation of RDA tax increment. Two members will be appointed by Mayor Reed, and one of those two appointees must be a union representative. The county will also appoint two members. And the County Superintendent of Eduction, the Chancellor of California Community Colleges and the Santa Clara Valley Water District will each appoint one member.

This oversight agency will be overseen by the State Department of Finance and supervision from more political folks, like the State Treasurer and State Controller. What a group! If this comes to pass, I hope all these future meetings will be conducted in public.

The debt listed last week is not in any given priority, but just a straight list. However, the Council will be asked to give priorities on a future date. For me, the most important result is that any money left over after paying off bonds or lines of credit goes to the general fund. What we do know from the attorneys is that bond holders are first in line to be paid and the county is last in line.

As the State raided RDA coffers, cities were allowed to loan monies from others funds with the intention of being paid back, including interest by future RDA tax increment. However, eliminating RDA was never contemplated because voters passed Prop 22. These loans put general fund dollars at risk in certain cities, such as San Jose. It is similar to taking out a loan from a bank to improve a rental property. Paying back the loan would have been done from the rent received on the rental property. But, in this case, the rental property was blown up by the same bank and so goes the ability to pay back the loan. It would be terrible governance for the state not to allow cities to pay back loans they used to pay the multiple state raids. Cities had full faith that they would be able to pay back loans, including the interest from future RDA tax increment.

Last week, Stanford University held a discussion examining the San Jose pension system. The Phd’s from Stanford pointed out that the San Jose pension system could be fixed with a one-time tax increase from $12,500 to $16,000 a household. I have obtained the presentation and you maydownload it from the District 6 website.

Finally, although I supported appointing Chris Moore as San Jose’s police chief, I believe that if the Federal government is willing to provide individuals gratis to assist San Jose in suppressing gangs, then those individuals should be encouraged to stay. Personally, I am willing to appoint or support people where we may not always agree. And that is OK.

Filed Under: Uncategorized

When Will Tax Revenues Recover?

August 22, 2011 By Pierluigi Oliverio

When I read or hear an economic report about building permits, housing prices, consumer spending, jobless claims, GDP, inflation, stock prices, etc., it always leaves me wondering: What does this data mean to a city?

Well, based on current numbers, San Jose shouldn’t expect any significant increase of our No. 1 revenue source, property tax, for several years. Property values have dropped or are stagnant, and no windfall is waiting in the wings for San Jose.

The Case Shiller index has tracked residential property values nationwide for approximately 10 years. It also tracks specific regions of the country, including our own. San Jose’s breakdown of land is roughly 85 percent residential and 15 percent commercial/industrial. I contacted the County Assessor’s office about the Case Shiller index and asked if Santa Clara County has tracked the index. The answer was yes. Local residential real estate has followed the index, so Case Shiller appears to be an indicator to watch for future property tax revenues in San Jose.

Compared to past quarters, San Jose may see some increase in sales tax revenues in the short term—the state lags in the reporting by several months. However, any increase in sales tax will have to plug the $2.8 million hole that was created by the state after the budget was balanced in San Jose. By not extending vehicle license fees, cities across California lost $130 million in revenue.

Consumer spending is difficult to predict. Will you or your friend purchase anything substantial this week? A car, appliances, expensive jewelry? These purchases are made based on confidence in having a job or moving into a new home. If there is a lack of confidence or not many people moving into new homes, this will result in lower sales tax revenues to cities. The savings rate for Americans has increased greatly over the last year, which is a good thing for the long term since individuals, in addition to government, are over-leveraged.

It seems the last decade of economic growth was based greatly on borrowing. And now, no longer being able to borrow/spend at that same rate will translate to anemic economic growth.  It is a good idea for cities to be conservative with sales tax revenues for budget planning, because an increased savings rate for consumers sustained over time will decrease spending.

As far as an upside in the utility tax, that depends on how many buildings are occupied by employees and the rate of consumption of electricity, water and gas (not gasoline for automobiles). Thus, the more vacant buildings are occupied,the more utility tax will be generated. Consumption also has to be balanced. Government is trying to promote energy efficiency, which is a good thing, however, it could translate to lower utility taxes over time. But you can expect a slight uptick in utility tax revenue from December with all of the holiday lights.

Other indicators at the macro level have an effect on San Jose but are harder to trace to direct revenues, like property tax, sales and utility tax. We will continue to walk a tightrope between tax revenue and services that can be provided for years to come.

On a final note, last week I attended the Rancho del Pueblo Golf course community meeting. One comment made by a staff person for Supervisor George Shirakawa was particularly interesting. The person said the city should sell the San Jose Municipal Rose Garden. Well, certainly the city could propose selling anything, but the first thing to point out is that selling any park in San Jose requires approval by voters. Another point is that there is no mortgage payment on the award-winning Rose Garden. The park land, a former prune orchard in 1928, has no outstanding debt. This is completely different from the golf courses, which the general fund must subsidize by paying back bonds that were issued without voter approval to purchase the land.

Filed Under: Uncategorized

Growing the Pie, Job by Job

August 15, 2011 By Pierluigi Oliverio

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SolFocus, which manufactures innovative photovoltaic systems, moved its headquarters and 100 employees to San Jose.

Increasing the tax base helps government provide services at levels that meet most residents’ expectations. At the national level it’s clearly impossible to grow the economy to pay off the national debt. At the state level, the current rate of economic growth is unlikely to keep the budget balanced this year. However, at the local level where budget deficits are not allowed, an increased tax base could go towards providing services to residents and thus restoring key positions.

As our region grows, San Jose benefits from both the marketing efforts of our Office of Economic Development and, of course, private-property lease rates. One of the advantages in San Jose has been a lower square-foot cost of commercial space than up in the Peninsula, plus larger buildings for expansion. Of course having Sun Micro abandon their gigantic campus in Menlo Park for Facebook to occupy or the massive commercial office build-out at Moffet Field does not help San Jose, as these developments will soak up a portion of the company expansions before they can move south to San Jose.

On Friday, Mayor Reed cut the ribbon for SolFocus, which moved their headquarters and 100 employees to Zanker Road. Joining them shortly will be Cavium Networks, which is moving its corporate headquarters to San Jose to occupy approximately 100,000 square feet on North First Street. Also, as noted in the press, San Jose will be asked to share a portion of its sales tax revenues back with Netflix as they move their DVD division to San Jose this year. Along with new companies there will also be expansions from companies already in San Jose like Super Micro, Tandem Diagnostics, SoloPower and Zazzle to name a few.

But as we know, companies ebb and flow, as Cisco just laid off approximately 1,300 San Jose employees. Yet we must move forward by focusing on companies that actually have a product they are selling in the marketplace.  Over time we will work our way to having more jobs and tax revenue in San Jose but we must be patient with retaining land for this purpose.

On Saturday, a signing ceremony took place between 1stAct and the San Francisco Planning & Urban Research Association (SPUR)—an organization of urban planners that focuses on advocating for the “Urban Center.” SPUR, funded by the Knight Foundation, will be located downtown for at least three years.  It was nice to hear the overwhelming positive comments regarding San Jose from SPUR and the Knight Foundation.  I look forward to their contribution to San Jose as the Council will adopt the new General Plan this Fall.

Finally, as the bill for High Speed Rail approaches $100 billion, it seems less likely that it will ever be built.  Much has been said about a tunnel in San Jose and its cost. Part of the cost of tunneling is based on the geology Downtown and along Hwy 87. Case in point: Take the sinkholes on Hwy 87.

Last month, a sinkhole developed on southbound Hwy 87 south of 280 and the Virginia Street overcrossing. Although Caltrans filled the sinkhole, further investigation showed that the underlying cause is excessive groundwater infiltration which caused the sinkhole to expand, requiring more significant repairs.
The specific project to repair the sinkhole(s) is expected to start on Wednesday evening Aug. 24 and end by Sept. 30.  The current plan has manageable impacts to southbound Hwy 87 and the Alma Street exit ramp which include the following: The third lane from the center median in the southbound direction will be closed most every day from 9am to 3pm.  The Alma Street exit will be closed 9am to 3pm, with detours via Almaden Expwy.  All southbound lanes will be narrowed as well to create safe space for crews to complete the repairs.

Oh and yes the Jazz Festival Downtown was great.

Filed Under: Uncategorized

Go Downtown and Play!

August 8, 2011 By Pierluigi Oliverio

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Orquestra de Moderna performing at Plaza de Cesar Chavez during last year’s Jazzfest. Photo courtesy Chip Chapin.

Downtown San Jose will be celebrating 22 years of the San Jose Jazz Festival over three days beginning this Friday. Music festivals are held all over the world and provide the unique experience of bringing musicians from across the globe to perform in one city.

The San Jose Jazz Festival is one of the best outdoor events showcasing the Downtown.  People speak of the need to close streets and allow walking to be the mode of transit. Well, this festival does that by closing contested streets for the weekend and allowing people to wander from stage to stage and enjoy music.

With so much emphasis on the Internet it is a nice opportunity to actually interact with people while enjoying our public spaces. Our Downtown Guadalupe River park was the stage for a Renaissance Fair this past weekend and will be hosting the Italian Festa the last weekend of August.

There are some people that “pooh-pooh” our Downtown by detracting the area for what they feel it may be lacking, or comparing one aspect to another different and unique city. However, our Downtown “is what it is.”  Downtown has progressed over 30 years with both public and private investment. I think we need to step back and enjoy what we have instead of waiting for something more or better which may never arise.

Discussions with some people about our Downtown remind me of a friend who is never quite happy. This person has the expectation of something more in life but “more” never seems to arrive, and next thing you know years have passed and this person is older and still unhappy.  Having attended outdoor events in the USA and other countries I can attest that there are always a few people at these events who may not be ideal citizens. However, this does not stop the free will of the majority of people to enjoy outdoor events around the world. I walk our Downtown core at night and feel safe. Whichever city I have walked at night I am typically aware of my surroundings and act accordingly.

When you attend the Jazz Festival please patronize and enjoy one of the many Downtown restaurants. I will be at the Jazz Festival and hope you will say hello.

Follow this link to the 2011 San Jose Jazz Festival website for a lineup and schedule.

Filed Under: Uncategorized

Call before the Housewarming Party

August 1, 2011 By Pierluigi Oliverio

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City parks like San Jose’s Municipal Rose Garden make neighborhoods more livable and homes more valuable. Glenn Franco Simmons photo.

About twice a month, I get an inquiry from someone who is considering purchasing a home in my council district. I think it is good idea as it shows they are doing their due diligence.

Councilmembers are often the conduit in which information flows about neighborhoods. We are on the receiving end of emails, phone calls and conversations at the grocery store where residents share information and perspectives that they often do not want to vent in a public forum amongst their neighbors. Thus councilmembers are able to have both a top-level and detail-oriented perspective of the neighborhoods in their districts.

The inquiries are generally the same from prospective residents, as they want to know about the current and future status of the neighborhood. They ask questions like: Will the road will be paved in the near future? Does the street have a lot of car traffic? May I chop down the tree(s)? Will new stores be coming to the neighborhood? Will the public school be closed to reduce traffic? Will industrial buildings with their noise and truck traffic stay or go away? What is going to happen with that empty lot? Does the street culture allow for privacy or is it a “chatty” neighborhood?  There is never a better time to be candid with someone that is going to purchase a home. Same would be true for renting however inquiries from people that rent are less frequent.

Some of the prospective residents take my comments and say thanks and I never hear from them again, while others have purchased their new home and in many cases I have a developed a new positive constituent relationship.

In 1993, I moved into a condominium development. My condo was located in a transitional neighborhood that had its fair share of crime. I was told a lot of things about the area including that the area around the condo would be an “artsy” area within a few years. I was also told that a park would be built across the street. The reality is, it took almost 10 years to build out the140 unit complex and unfortunately the rumored park that was supposed to go across the street…is still not there.

Professional Realtors are good people working hard for both buyers and sellers. However, disclosures cannot possibly cover every angle of a neighborhood. Realtors do not control government, recessions or other private property owners.

Cities are constantly evolving and changing. But it seems that significant change is at a snail’s pace with a flat economy, and neighborhoods are more likely to stay the same versus experience radical change. So in conclusion: If you’re looking to move into a neighborhood and you’re curious about the surrounding area you should contact your respective local elected official and ask for their viewpoint.

Filed Under: Uncategorized

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