In 1976, San Jose city leaders emerged from a retreat at the Asilomar Conference Center and declared that their number-one priority was to fix the jobs and housing imbalance in San Jose.  Since then San Jose has provided the most affordable housing in the state of California, and tens of thousands of market-rate dwellings; however, San Jose has not shared in the job growth. So while other cities have a “jobs surplus,” San Jose still has a “jobs deficit.”

San Jose has grown faster then planned.  For example, in 1970, our population was 459,000, growing to 629,000 in 1980 and then 894,000 in 1990, with up to almost a million in 2009.

The Association of Bay Area Governments (ABAG) numbers would have San Jose grow by another 471,000 residents by the year 2040. I serve on the General Plan 2040 Task Force, which has met once a month for more than a year, and will conclude in June 2011. The Task Force is charged with deciding how San Jose will grow by 2040.

This jobs-housing imbalance is one of the reasons San Jose has difficulties in paying for neighborhood services. The tax base for housing is lower in comparison to commercial and industrial uses. Commercial and industrial land produces more revenue and demands fewer city services. Housing produces less revenue and demands more city services, like libraries, parks, code enforcement and the list goes on.

There are vocal paid housing activists that believe San Jose has not done enough for housing. These folks would like to see every parcel paved over and housing put in its place. They don’t seem to care if land is zoned for commercial and retail uses; in their point of view, San Jose should just change the zoning and allow more housing instead of industry.

I do not believe San Jose should be the housing hub for the state of California.  I support putting housing where the land is zoned for housing, however, I do not support allowing ABAG to have free reign over San Jose. We could build housing on every last parcel, but our housing would still be more expensive then other parts of the country because of our great climate. Start-up companies continue to grow in more expensive housing areas like San Francisco, Menlo Park, Palo Alto, Redwood City and Mountain View. So to say high housing costs deter new business is an odd statement. San Jose is the patron saint of building both affordable and market rate housing in the state of California.

The 2040 Task Force will be moving forward soon with an Environmental Impact Report (EIR), which will take about one year to complete, regarding different scenarios. The scenarios range from 179,000 new housing units to 105,000. As for jobs it ranges from 181,000 to 479,000 which is a BIG “what if” scenario.

You see, the city of San Jose does not make jobs; jobs are created by the private sector.  What San Jose can do is provide great services that make San Jose attractive to start and grow a business.  Personally, I advocate leaving more land for job expansion and less for housing.

“If” we get more jobs then expected (this hasn’t happened in the history of San Jose, but there is a first for everything) we can quickly rezone land to accommodate more housing.  However, you cannot rezone housing back to industrial unless you’re in China.

My ultimate preference is a staged “gate” approach, where we approve an overall total of housing but it is dependent on job growth. So, for example, for every 10,000 units of housing that is entitled, we then wait for 15,000 jobs. Then, and only then, do we move forward with more housing. Otherwise, San Jose will be destined to follow its historical past of providing all the housing and none of the jobs, and get little revenue to pay for city services.

Prior to 2040, we will be able to leverage new areas for housing with high- speed rail so San Jose can be a job center. From Fresno to Downtown San Jose will be one hour with high speed rail.

If you would like to do some reading then take a peek at the General Plan website. The next General Plan Task Force meeting is Monday March 9th at 6:30pm at City Hall.

Last week, I attended a brainstorming session at City Hall.  The purpose of the gathering was for ideas to help Downtown during the recession. The group included the Downtown Association, land owners, developers, business owners, arts advocates and others. Individuals presented their ideas to the group.  One example was sponsoring an overnight camp-out in Downtown parks by the Boy Scouts and Girl Scouts. Another was closing SOFA to cars every Friday allowing for a pedestrian-oriented evening. Other ideas included a 24-hour theater festival, music festivals, murals and free parking. And another was that the city could give away free Downtown land for an architectural design contest.

I thought to myself, “What could we do during a long-term recession that costs the city zero dollars and would actually bring more revenue to the city?” My idea: allow card rooms to locate in Downtown again. Downtown originally had a card club that moved to the suburbs.

No new card clubs are allowed to open in California. San Jose has two card clubs grandfathered by state law that are allowed to stay open indefinitely. The two card clubs bring approximately $13 million in tax revenue to San Jose every year. That money pays for a lot of serviecs; for example, half of our citywide library budget, or 21 miles of road paving, or 3,200 wheelchair ramps on street corners (we have over 60,000 street corners). In addition to generating nearly $13 million for the city, the card clubs also must pay for the cost of police to regulate them, which is about $2 million annually.

Currently, our two legal card clubs are not allowed to move; therefore, they are forced to stay in the same location and pay a higher rent every year since the landlord knows they are not allowed to move.

At the session, I suggested we allow one of the card clubs to move downtown adjacent to our convention center. As I mentioned above, card clubs are a profitable legal business that bring money to the City. In fact, I believe that there would be a big incentive to move Downtown that could help pay for the upcoming convention center expansion. Perhaps if San Jose would seriously consider this idea, we could put a card club at the base of a new hotel Downtown on top of an expanded convention center where the $5 million “tent” is located on Market and Viola.

When conventioneers come to Downtown they roam around after the convention events and maybe have dinner, maybe see a movie and then go to bed. I believe we should allow the option of playing poker for those conventioneers that choose to do so. Card games have grown more popular with celebrity poker on television.  I believe that a card club Downtown adjacent to the Convention Center would bring increased revenues since I believe they would have increased customers. The city would have new net revenues that could be used to lower our deficit.

There are some who find gambling immoral. However, not everyone finds gambling immoral; therefore, its important that we keep in mind that gambling is legal, is a pastime that both women and men can equally participate in, and gambling gives the city a significant amount of revenue each year. We already have a well policed Downtown and the card club could and would contribute to Downtown policing since it pays $2 million for police today.

Some may worry that there will be some Atlantic City down-on-their-luck folks roaming Downtown. If that did occur, is that any worse then today’s situation of homeless individuals and drug dealers from the East Bay that are Downtown today? Is it any worse then the two people who I came upon Friday night on South 2nd Street that had been stabbed multiple times in the SOFA district? Gambling will continue regardless of strong opinions, just like the legal consumption of alcohol. One only needs a web browser to play internet poker, or one can drive to one of California’s 60 Indian casino’s, Lake Tahoe, Reno, Las Vegas or simply go to friends’ homes and play cards.

I was asked, why not allow a card club in Willow Glen?  My answer was “because Willow Glen does not have a convention center and seven hotels.” The publicly funded Downtown is for everyone.

Why not allow a popular legal business to move next to the convention center and allow out-of-town visitors to spend their money in San Jose? We collect money from visitors all the time with the Transit Occupancy Tax (Hotel Tax), Airport Fees, Rental Car fees,etc….For local customers who choose to gamble, they would bring more revenue to the City by utilizing the parking garages.

What are your thoughts about moving the legal card clubs back to the Downtown where they originated?

Last week at the Rules committee, there was a standing- room-only crowd to support our request to use $1.9 million to fund the citywide school crossing guard program on a temporary basis (three fiscal years) out of the $9 million the City receives from the tobacco settlement monies.

The reasoning for this request is that the 60-year-old crossing guard program should not be eliminated, as has been suggested, to balance the budget.

This issue brought out five school superintendents, two principals, three elected board trustees, crossing guards, police personnel, and numerous parents from neighborhoods such as Almaden Valley, Cambrian and Santa Teresa.

These supporters spoke in favor of our request, and the need to make hard choices, for nearly a hour. The Franklin-McKinley Superintendent shared that crossing guards were more then people trained to assist pedestrians crossing busy streets; he stated that crossing guards are watchful eyes for the children when it comes to outside influences. He continued by explaining that he is on the Mayor’s Gang Task Force, and that crossing guards look out for children as they walk to school to make sure they are not approached by gang members.  Definitely a good point that pertains to our entire city, but especially the greater Downtown neighborhoods and the East Side. There will be more to come on this issue so stay tuned.

On another note, the council accepted the mid-year budget cuts last Tuesday. We were short $9 million—which is the same amount as the HNVF/tobacco money. Items that will directly affect service to taxpayers that took the axe included proposals to eliminate all money from the traffic-calming budget, to start turning off street lights in non residential areas, to reduce grants to fix homeowners sidewalks, and to eliminate the street maintenance and repair reserve fund.

Jennifer Maguire, the City’s budget director, shared that the city is forecasting that we will be short an additional $6 million on revenues, which could push our budget deficit as high as $71 million by June. The big number comes out in March when we get an update on our sales tax revenue.

The same meeting also discussed the results from the citywide survey which was conducted by a consultant that included 500 San Jose residents. Half of those surveyed were “likely voters” and the other half were picked from a random computer-generated list.  I asked that we try to expand the survey to 1,000 residents to make it a bit broader, since the cost of expanding the survey is incremental.  Also, when we are asking questions about the city I think we should only ask likely voters since they actually took the time to vote.

At least two-thirds of residents found the following potential reductions in city spending “somewhat” or “completely” acceptable to cut:
• Reducing the size of pay increases for city employees (79 percent)
• Reducing funds for recruiting, training and recognizing city employees (73 percent)
• Reducing branch library hours by one day per week (70 percent)
• Closing some city pools and aquatics centers (67 percent)
• Reducing maintenance of city buildings (67 percent)
• Reducing the size of benefit packages provided by city employees (66 percent)

On raising revenue:
• 78 percent supported selling old City Hall
• 76 percent supported selling advertising on city owned property
• 73 percent supported selling city owned golf courses
• 60 percent supported selling the Hayes Mansion.

Do these results match your opinions?

Coming before the Rules Committee on Wednesday, Feb. 11 at 2 PM in Room 118 is a memo regarding the 64 year-old crossing guard program. In a nutshell, the memo asks that the City of San Jose use $1.9 million from the $9 million tobacco settlement monies (which the City receives every fiscal year from the tobacco industry and will receive for the next 25 years) to fund the crossing guard program on a temporary basis (for three fiscal years) to ensure that the program stays intact despite our massive $65 million deficit. After three years, our economy ideally should improve and the funding for the crossing guard program can be re-evaluated.

The City began receiving the tobacco settlement monies in 2000; before Sept. 11, 2001, and before the recent collapse of the economy. Instead of using these additional funds for core city services, as all other municipalities did, the City set up the Healthy Neighborhood Venture Fund (HNVF).

It’s not uncommon for government to start new projects, or create new government jobs with “extra money” that it has. However, my bet is that if people got to vote whether government was to save money or start “new projects” with “extra money” that the people would vote to save money.

There are three groups that are currently funded “off the top” from the HNVF fund. We spend more than $900,000 on staff to manage the HNVF (please note that this amount equates to between six and seven full-time police officers, or almost enough to open all neighborhood libraries on Sunday), $2 million on children’s health insurance, and about $2 million on homework centers. After these groups are funded, there is about $4 million left for the HNVF competitive process.

It’s important to note that besides these three groups, there is no other entity or group that is guaranteed funding from the HNVF.  Groups need to reapply for HNVF funding every year. Therefore, using $1.9 million for crossing guards does not displace any group nor does using some of the HNVF monies eliminate anyone’s job. In fact, if the City of San Jose used $1.9 for crossing guards out of the $4 million, the HNVF would still have more than $2 million left for its competitive process.

Also important to note: The City of San Jose gives approximately $30 million to non-profits every fiscal year, as reported by the city auditor in December 2008.  I believe the City is doing a very good job of funding non-profits.
Members of some non-profit groups have said that the crossing guard program should be paid for by Parent Teacher Associations, or that the schools should fund the crossing guard program. I think these statements are out of touch. The crossing guard program has been under the City of San Jose Police Department since 1945; the HNVF, since 2000. Crossing guards keep our children safe on city streets. In fact when the residents of San Jose were polled in a citywide survey and asked if they wanted the crossing guard program cut, 65 perent said “totally unacceptable.” When the same residents were asked if they supported reducing the amount of money the city gives to non-profits; 62 percent said totally acceptable.

These are harsh economic times where we have to make hard choices, as you and your family do. Therefore, I support tapping the HNVF fund for $1.9 (on a temporary basis) to fund our 64-year-old crossing guard program which leaves over $2 million for HNVF. This proposal does not fire anyone and keeps part-time crossing guards employed and our kids safe on busy streets.

Last week, the Council spent two and half hours talking about making changes to a 1997 “competition policy.” At the prior Council meeting we spent two-plus hours talking about the same topic.  That policy is already burdensome and makes it difficult for businesses and/or non-profits to jump through all the hoops to do business with the city. I don’t own a business or manage a non-profit, so don’t ask me, ask the only two businesses that tried to utilize the policy during the past 12 years, but to no avail.

I believe that all Council members have the right to bring up topics or policies that they are interested in. I think the Council does a good job of remaining civil towards each other so that we do not disrespect our colleagues who have differences of opinion.

Mayor Reed quoted Winnie the Pooh at the start of the discussion: “Before beginning a hunt, it is wise to ask someone what you are looking for before you begin looking for it.”  The Mayor then asked the Councilmembers who authored a memo seeking changes to the current competition policy what problem is it that they were trying to fix. He asked for one example of something that went wrong that fueled their concerns. No one answered the Mayor’s question or gave one example.

I chose that day to not share opinions but rather just ask questions about the 15 additional proposed regulations to the policy. I asked several questions that took up about eight minutes and thanked my colleagues for their patience. The balance of the 2.5 hours was awkward, with back-and-forth about which group should review, when, how long, process, etc…

I want to thank the council members who brought forward the memo. They have opened the door to limiting campaign donations to city council races. In regulation five (out of 15), the proposal is to restrict campaign donations from any company that may provide an outsourced service to the city.

I understand the intent and agree. But why stop there?

The memo brings up the point that there is a connection between political campaign donations and elected officials’ decisions. Some people believe there is a direct connection between campaign donations and endorsements to an elected official’s voting record on things like contracts, which are covered directly in the competition policy.

Sooo…

Should we ban campaign donations from construction companies that build our community centers and libraries?

Should we ban campaign donations from residential and commercial developers as the Council regulates land use?

Should we ban campaign donations and volunteer time from public sector employee unions as the Council approves wages and benefits?

Should we ban campaign donations from anyone who makes money off city council decisions?

Currently, the only restricted source of campaign funds to San Jose city council races is from Garden City and Bay 101 Card Clubs.

Thank you for opening the door to allowing city council campaigns to one day be free

On Saturday, City Manager Debra Figone and Mayor Chuck Reed hosted 100 neighborhood residents at City Hall for a discussion and group exercise on how to balance the city’s budget and eliminate the $65 million dollar deficit.

The residents who attended represented a large geographic portion of the city. They were both young and old, male and female and represented a wide ethnic diversity. In addition, the residents came from a variety of occupations including private sector and public sector union members.

After welcoming remarks from the city manager and mayor, a facilitator took over and gave everyone an overview. Before the exercise was to begin, the facilitator asked the planning director, police chief, director of parks and director of transportation to give an overview of their departments and the services provided.  Questions from the audience followed.

The group exercise lasted for over a hour. Residents working in teams were given alternatives via colored cards representing different services, etc., that could be cut to help reduce the deficit. Anything from reducing the rate of growth in personnel costs, postponing the opening of new libraries and community centers, holding off hiring new police officers, and eliminating school crossing guards. There were also revenue enhancement options, like a one-quarter-cent sales tax that would require voter approval, increased cost of parking in city garages, restructured leases with non-profits on city property, increasing parking citation fees, etc.

The groups engaged each other in considering the pros and cons of each idea. One group made a pile that consisted of “absolutely no,” and an “absolutely yes” pile, and then a large “maybe” pile to help them get started. Some groups talked about what they liked about their neighborhood and city today before starting the process.

Some groups reached quick consensus while others had long discussions on the impact of choices. There were blank cards available where the residents were able to register their own cost-cutting ideas or revenue-generating ideas. The city manager and the specific department head would review the ideas and if doable would sign off on them. If not possible at all (such as a suggestion to raise gas taxes) then the idea would not be signed off.

If groups needed more information about a specific choice they would put up a red sheet and the department head would answer the question and in many cases the budget director was able to provide dollar figures for the new idea.

I observed from start to finish, roaming around and listening in on the dialogue. Credit goes to Mayor Reed for proposing this idea of neighborhood budget meeting, which is now in its third year. Residents that had participated in the last two years thought this one was the best. A resident from Evergreen said that interaction was great and the high level of choices made it engaging. I agree that the exercise was positive and believe as we continue to have residents sharing their views it will continue to be better each year.

Out of the 10 groups that participated, only one group did not balance the budget, with only $62 million in savings. However, they did not raise taxes. Several groups exceeded the goal and went as high as $75 million, which is likely to be the actual deficit come June. When they could not agree with a choice they would vote the idea up or down and move on. The groups worked well together as they understood the seriousness of the current recession.

After the group exercise there was a group discussion to share feedback on the exercise and what happened at each table. Here are some of the comments from the table captains in no specific order that were shared to the group at large:

• Make aggressive wage cuts.
• Everyone needs to sacrifice.
• Hire a full-time person just to do grant writing.
• Don’t cut crime prevention and gang intervention.
• Reduce benefits packages for city employees.
• Salary freeze for anyone making over 100K, like Obama’s staff.
• Have DOT parking staff give out tickets and have cars towed instead of police in neighborhoods.
• If you want to propose a new program or building, come up with the money to fund it ongoing or don’t propose it.
• Use furloughs to save money and not do lay-offs
• Outsource street landscape maintenance.
• Use contractors instead of employees.
• Don’t allow retirees to come back and work as consultants while they get paid their pension.
• Nightclubs should cover police costs.
• Focus more on economic development.

One resident said that it is easier for her to make these decisions as a resident since there is no political backlash. Another resident said the elephant in the room is the public employee unions and that we’re not fixing the real problem of our expenses being too high.

The residents’ feedback and new ideas from the neighborhood budget meeting will be discussed at a Feb. 13 city council study session.  In addition, a phone survey asking even more residents across the City about their budget priorities will be available in the next few weeks.