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.

The 20th San Jose Jazz Festival was a shining success—for itself, and also for Downtown San Jose. The festival showcased straight-up jazz, Latin jazz, blues, and Brazilian music, at outdoor stages scattered throughout the Downtown. Many of the Downtown hotels were filled with visitors, which means money for the City of San Jose in the form of transit occupancy tax (TOT). Forty percent of this tax goes to the general fund, and the balance is split between the convention center, cultural facilities, cultural grants and arts groups.

After the stages were closed down, the restaurants in the Downtown were filled with patrons spending money and listening to live music. I thought to myself: “If someone was visiting San Jose for the first time, they would be very impressed with our Downtown.” There was something for everyone.

At one time, the San Jose Jazz Festival was free. However, over time the event changed and the organizers decided to charge an admission fee. In some ways, this was a risk. We can usually count on people attending a free event as long as it is advertised, however, changing a free event to one with an admission is a gamble.

Although I appreciate free events, for example, Farmers Markets and Music in the Glen, I do believe that people will pay to attend an event if they see the value in the entertainment. Once someone buys a ticket, they commit to staying for most of the event vs. a quick walk through. In addition, the cover price usually can keep the crowd manageable and diverse which I believe benefits the attendees and the sponsors.

For example, at the Jazz Festival, there were many happy people vs. people that sometimes are looking to cause trouble. In a day in age when sponsorships are harder to come by and cities have fewer resources, I believe events that have a cover charge may be the way to go.

Of course, if you’re the Jazz Festival in Montreal and your main sponsor is a cigarette company, then perhaps funding is not such an issue. However those types of sponsors are not so popular in healthy California.

So perhaps Music in the Park, put on by the Downtown Association on Thursday nights, might consider a $2-$5 cover; or the same for Dancing on the Avenue in Willow Glen. Outdoor events are expensive to put on and a nominal amount of money per person could help to cover the costs and be treated as a partial tax deduction for the attendee if the festival is benefiting a charity of some kind.

On another note: I attended the ribbon cutting for the Ericsson Campus in North San Jose last week where I met the CEO from Sweden, Carl-Henric Svanberg. I thanked him for his investment in San Jose but also noted that as they grow partly by purchasing other companies that San Jose is the perfect place to be since so many new technologies are created and funded through local Venture Capitalists.

Ericsson is the world’s biggest supplier of cell phone network equipment. Ericsson bought Redback Networks and others to make a presence in Silicon Valley and make San Jose a premier global Research and Development facility. Ericsson has great signage and is located in several buildings along 237 next to Force10 Networks and the new headquarters under construction for Brocade. Kudos to Ericsson’s expansion during these times and providing 1,400 jobs in San Jose.

The City of San Jose closed a $84 million dollar budget shortfall for the 2009-2010 fiscal year, which resulted in 13 city employees being laid off. However, these 13 former employees are first in line for job openings at the City should they become available. Also as a result of the balanced budget, 250 city employees moved into different departments and/or positions based on their seniority. For those 250 people involved in the “bumping,” it is a intricate process that is all about years or months of service that I will attempt to explain. Bumping is governed by the Civil Service Rules.

Example 1:
Steve has been a Maintenance Assistant for three years and Greg has been a Maintenance Assistant for 2.8 years—both work in the Parks Department. Steve’s position was eliminated in the budget; however, vacancies for a Maintenance Assistant exist in the Public Works Department. Steve will bump into Greg’s position and Greg would leave the Parks Department and be reassigned into a vacancy in the Public Works Department.

Example 2:
Pat has been an Analyst for one year and a Staff Technician for five years in the Department of Transportation. John has been a Staff Technician for five years in the IT department. Pat’s position is eliminated; there are no vacancies; and he is the least senior on the Analyst list, so he is bumped from Analyst. His prior job as a Staff Technician and six years of seniority overall will allow him to bump John, who only has five years of overall seniority. Now John must find someone else to bump.

Example 3:
Kathleen has been a Senior Analyst for three years and Dale has been an Analyst for two years. Kathleen’s position is eliminated; there are no vacancies; and she is the least senior on the Senior Analyst seniority list. Therefore, her three years of city-wide work will allow her to bump Dale. Now Dale must find someone to bump.

Just like the game of “musical chairs” there will be some who find a seat/job and others who do not.

This game of Musical Chairs occurs in all civil service organizations, since they are based on seniority rather than merit. The historical reasoning for this is so that civil servants do not become political pawns of elected officials. However, the caveat is that many good people can be let go just because they have not spent as much time in a job as others.

From my experience as a Councilmember, I can say that the overwhelming majority of people that work for the city do a great job and are dedicated to their work. With that said, there is that 5 percent of the city workforce that are non-performers.

I have worked with non performers in the private sector and eventually they get let go—especially as the business cycles ebb and flow. However, by civil servant rules it is difficult to get rid of non-performing employees to make room for those that may be harder working but have less seniority.

Do you ever wonder what it takes to move a bus stop?  Especially those that are located at busy intersections or located right in front of retail establishments? Well, if you have, you are not alone.

My council office gets requests to move bus stops on occasion. Sometimes the request is moving a bus stop that has been in the same location for 30 years, after a the new adjacent homeowner wants it moved. Other times, the request involves genuine safety concerns with bus stops being to close to the intersection.

For example, at the corner of Willow/Meridian, a bus will make a turn onto Willow and then stop, which backs up traffic into the intersection creating gridlock, or causes cars to swerve around the bus blindly.

The City of San Jose does not have direct authority over the location of bus stops, that’s Valley Transportation Authority’s (VTA) domain.  VTA folks are paid with your tax dollars however.

Let me tell you a story of VTA’s refusal to move a bus stop on The Alameda, although there is written documentation from November 10, 2004 that shows that they agreed to move the bus stop. As you might sense, a lack of common sense.

Back in 2004, during the planning review process for the new Longs Drugs store on the Alameda, a VTA representative signed off on documents that VTA would relocate their bus stop that is located in front of Longs Drugs and put it one block west on The Alameda.  Longs needs to have their delivery trucks deliver in front of the store and they are not able to do so with the bus stop there. This satisfied the neighbors who wanted to prohibit loading on Rhodes Court, a residential street, and it satisfied the City Planners who didn’t want to disrupt the existing neighborhood.  The new loading zone and relocated bus stop were clearly drawn on the plans for the project and discussed during the public review process.

It is the City’s responsibility to send the plans to other agencies, including the VTA, for their review and comment.  The communication between the City Staff and VTA Staff resulted in signed document with the VTA saying in writing that they supported the relocation of the bus stop.

After the planning permit approval, Long’s proceeded through the Public Improvement Plan review with the City’s Public Works Department and Caltrans (since The Alameda is a state highway).  The Public Improvement Plans include detailed engineering drawings of all the street improvements, including the new bus stop and the new loading zoning markings and signs.  The improvement plans showed the new bus stop being designed and built to VTA standards.

In 2005, Long’s then proceeded to spend over $20,000 to construct the new bus stop during the construction of the new store.  Once construction was complete, as required, Long’s contractor notified the VTA that it was time to actually relocate the bus stop.  However, VTA notified Long’s that they would not authorize moving the bus stop afterall.

As a result, the Long’s store has no authorized loading area adjacent to the store as designed. The nearest loading zone is on Rhodes Court, the neighborhood street that is perpendicular to The Alameda. Therefore, delivery people must move products across Rhodes Court and up and down two ADA ramps to get to the delivery doors that are in the front of the store facing The Alameda.  The lack of a convenient loading zone means that delivery trucks will park on Rhodes Court or will use limited customer parking in the parking lot which requires wheeling deliveries through the store aisles past customers to get to the storage area.
These situations discourage investment in the City and result in creating poor relationships with the community. The City wants new retail services in Neighborhood Business Districts because they add character to neighborhoods, provide some jobs which include small business opportunities and sales tax.  But, when taxpayer-funded agencies don’t keep their commitments, then potential businesses ask themselves why they are investing and doing business in this community.

Long’s followed all the rules.  They did everything the neighborhood, the City and the VTA wanted. They spent over $20k installing the bus stop and designed and built the store with the delivery area facing the Alameda. They wanted to be good neighbors and fit in while being an asset for the nearby community.  It is very disheartening to see all this good work and what they get is a slap in a face.

If VTA wants to play fair, perhaps they should refund Longs their money spent building the new bus stop.  To date, VTA has never offered to refund the cost to Longs and the bus stop has not moved.