Last week I attended a disturbing meeting. Not a City Council meeting or a committee meeting but rather a meeting with law enforcement on child pornography. I did not know what to expect.

The Silicon Valley Internet Crimes Against Children (SVICAC) is responsible for investigating cases of web-facilitated child pornography and cases of child sexual exploitation or abuse that results from contact over the Internet. There is a small team that works in this capacity that presented at the meeting. A San Jose Police Department officer gave a very informative presentation, and the seriousness of the content was striking.

There is no typical profile for a person who commits crimes related to child pornography other than they are almost entirely male. The offenders run the gamut of all ages, ethnic groups, sexual orientation, religion, education, income, etc. Through its investigations, the SJPD has arrested people in Bay Area cities outside of San Jose. This team seems very committed to the task at hand and partners with the Santa Clara County Sheriff’s Office.

I had never seen child pornography, however, I was about to find out during the presentation.  During the meeting they showed some censored photos. At first the photos looked innocent enough, but soon they became something I could not have imagined and cannot repeat here. Suffice it to say, the photos were very disturbing—to the point that I grimace as I write this blog.

I especially appreciate the efforts of law enforcement in this area as a significant portion of those who view child porn may also victimize a child. For some, it is a cycle as many child molesters were molested themselves as children. Some may say there are cultural issues and that viewing child porn is OK as certain countries or cultures have different social norms. But after seeing it first hand, I do not believe any culture could condone the acts depicted.

The accessibility of this content is available via peer-to-peer file sharing applications. Files are shared across international borders, raising the issue above the level of local law enforcement. Like other types of crime, only a fraction of those who download child pornography are actually caught. Pedophilia is a psychiatric disorder and treatment may reduce incidents, but there is no cure.

Today, each conviction requires the efforts of an extensive technical police investigation. Perhaps in the future, there may be a less time consuming way to identify these people via new Federal legislation. For now, though, know that you have a committed team at SJPD along with the Sheriff’s office doing their best to investigate, arrest and convict.

As you may have heard, last month the California Supreme Court terminated all Redevelopment Agencies (RDA) in California. As a result, they will be dissolved by Feb. 1, 2012.

The first step is for each RDA to form a “Successor Agency.” This agency will enforce any and all obligations and agreements that are currently in place. In addition, it will dispose of assets and properties as well as oversee prior agreements to manage specific redevelopment projects. Finally, the agency will prepare an administrative budget every six months. The city may act as the “Successor Agency,” and I assume most cities will do so.

The checks and balances of the new agency will be done so by an oversight board. This seven-member board will include many different officials.  Each of the people and groups listed below will have one appointed representative.
● Mayor
● Country Board of Supervisors,
● Santa Clara Valley Water District
● County Office of Education
● Chancellor of the California Community Colleges
● Labor Union

A final member will be added from the public as a private citizen. The Board of Supervisors will appoint the private citizen. It will be interesting to see who the board picks. I hope they choose a certified public accountant, because this really is about managing finances.

This oversight board directs the dissolution of the former RDA, including selling land and repaying debt. The board establishes payment terms, refunds outstanding bonds and allows cities to buy RDA assets at fair market value,etc…

Another topic that will be discussed by the oversight board is continuing to have a Housing Department. The Housing Department employees have been funded by RDA funds and/or grants. Since RDA will no longer exist, the future of the housing department is now under question.

RDA was not meant to last forever, but the way the state chose to end the RDA caused unnecessary harm to local governments. The state raided millions of dollars from San Jose’s RDA without any regard to cash on hand or how RDA would be able to pay existing debt obligations. The city of San Jose will now inherit a portion of the total debt that comes from decades of accumulated spending by the RDA. For example, although the Fourth Street garage was completed in 2004, its debt was to be paid over 30 years. As a result, the general fund will pick up this debt payment. Perhaps San Jose State would like to lease a floor of parking in the Fourth Street garage to help out?

On another note, the Rules Committee unanimously approved sending my memo regarding allowing volunteers at the library through the meet and confer process. This starts the conversation about allowing volunteers to augment library staff to possibly extend the current hours of operation for our libraries without any layoffs. Stay tuned as the discussions with the union may take some time; however, I am hopeful.

And on a final note, special thanks to the 400 volunteers who contributed to the winter pruning at the Municipal Rose Garden on Saturday morning.

Due to flat tax revenues and escalating pension costs, the city of San Jose has been forced to cut library hours year after year as well as make million dollar sacrifices in all other city departments. Even with all of the eliminations, San Jose continues to have a budget deficit. The current direction for the Library Department for fiscal year 2012-2013 is to cut an additional $2 million, which ultimately equates to library staff layoffs and less hours of operation.

It is unlikely that the four libraries currently closed in four different council districts will open in the coming years with the existing library delivery model. Instead, there is a high probability that library hours across the city will be reduced again to balance the budget. At a time when we need to preserve our police staffing, it is unlikely our libraries will receive any windfall of tax revenue.

San Jose is gifted with beautiful libraries funded by voter passed bonds. Our goal should be to open our libraries for as many hours a week as possible. Certainly, the most important concern is to have the library doors open.

We need to re-examine the current delivery model for San Jose libraries and seriously consider how we can incorporate volunteers to fully maximize the hours of operation at all of our libraries. Any change from the current delivery model requires approval from the union.
Volunteers could add value. For example, they could augment current library staff to extend the number of hours a specific library is open. This does not mean laying off current staff, but rather simply augmenting staff with volunteers to gain an extra open day a week. Or, in a worse case scenario, retaining the current hours in the face of budget cuts. In relation to volunteering for civic purposes, 71 percent of fire fighters in this country are volunteer.

I hope that the mandatory meeting process, which is known as “meet and confer” (not open to the public or even elected officials, unfortunately), between the unions and the city might result in some movement to incorporate volunteers. My fear is that if we don’t make some changes now, then the council may have to consider another cost saving alternative like outsourcing the libraries to a third party, as is being done in other cities. Although outsourcing would extend the hours and days of operation, it would also most likely bring layoffs. As a result, I would like to see volunteers utilized.

As I mentioned above, the vast majority of fire fighters in the USA are volunteer, therefore, I believe mustering volunteers for a library would be less difficult in comparison. One reason for less difficulty is because 95 percent of San Jose library patrons today already use self-checkout machines for their library materials. Maximizing volunteer opportunities would open the door for both residents to utilize the library and for resident volunteers to come forward and be part of the solution.

More than 3,000 volunteers near and far have come out to support the San Jose Municipal Rose Garden, and I believe people would do the same for libraries given the opportunity. Allowing volunteers to augment city staff would avoid layoffs and stretch our library department funding further to benefit our customer: San Jose residents.

Please help keep the San Jose Municipal Rose Garden the number one rose garden in the USA by volunteering for Winter pruning this Saturday at 9am. Special recognition will be given to two of the many volunteers, Myles Tobin and Harry Garcia, who have volunteered more than 2,000 unpaid hours each. If you can’t make it, this event volunteer opportunity exists year-round at the park—except when it rains.

Last week, the City Council made a change to suspend two construction taxes for a limited time in an attempt to encourage commercial property owners to provide improvements for their existing buildings. The hope is that if owners can improve their buildings at a lower cost, they may find tenants—which is a win for them and for San Jose.

Providing incentives to property owners to improve their property is one way the City can show that it is a partner in economic development. As we know, new tenants brings jobs and payroll spending to San Jose. Also, new office development like market rate housing—not affordable housing—pays fees and taxes that helps provide money for road paving. However, the current municipal code kept the construction taxes higher than they needed to be, and it appeared that the high tax may dissuade certain office development like research and development.

With this new policy, any loss of tax revenue for road paving would be taken from the economic development department. The Economic Development department thought this was so important that it was willing to give its own budget away to make it happen.

The other item the council discussed was exploring the traffic impact fees in the North San Jose development plan. There is concern that the fees may be a hindrance to locating a new expansive corporate headquarters. The approved Environmental Impact Report (EIR) for North San Jose was challenged in court, and as a result, the EIR requires that certain road improvements take place. Many of these traffic improvements would have been paid for by the Redevelopment Agency (RDA), but alas the Golden Goose appears dead. Unfortunately, that leaves really high traffic impact fees that increase new development costs in comparison to other cities.

The housing units for North San Jose are traffic mitigation for the EIR, because it is assumed a portion of those new residents will work in North San Jose and/or take shorter car trips versus someone who drives to North San Jose for work from South San Jose.

Cities often invest in infrastructure to induce economic development. For example, if San Jose listed certain infrastructure projects as a core priority, then we could possibly allocate funds and therefore increase jobs in San Jose. These infrastructure projects would have to compete against city departments for funding instead of hoping they will get built.

Or, and possibly better yet, instead of making market rate housing developers in North San Jose pay millions of dollars towards affordable housing projects, let’s instead take that money and allocate it to an earmark fund for the North San Jose traffic impact project. We can literally use this money to pave the way for news jobs in North San Jose.

Last year, Mayor Reed’s budget, which most of the councilmembers supported, gave warning to the city-funded “Art” groups that they would no longer receive funding from the city starting on July 1, 2012. As we know, the budget deficit continues.

Many of the art groups are in facilities partially or fully built by the Redevelopment Agency (RDA). These include the San Jose Museum of Art ($475K), The Tech ($1.1M), Children’s Discovery Museum ($285K), Mexican Heritage Plaza ($600K), San Jose Repertory Theater ($285K), History San Jose (775K), etc. The dollar amounts are how much money they received from the city this fiscal year (2010-2011).

Although valuable, art is not in the City Charter. However, there are other discretionary things the city spends millions of dollars on like health insurance for children, golf nets, etc. Art promotes San Jose and boosts the economy in ways that others items we spend millions on do not. This other spending does not have have the same return on investment.

These art groups, with some exceptions, have done a good job overall in fundraising and cutting costs. Most of the donors for these cultural facilities live outside of San Jose. Therefore, the good news is that these out-of-town donors bring money to support San Jose art groups. Besides providing exciting places to visit in San Jose, these facilities also generate an economic buzz through visitors parking, dining, drinking and some hotel room nights downtown.

Deloitte did a pro-bono study this summer for The Tech, The Rep, SJ Museum of Art and the Children’s Discovery museum. It showed an economic impact of $54 million to San Jose.

Still, money is needed to support the repair of the four facilities profiled in the Deloitte study, in the amount of $5.5 million. In the past, if a HVAC system needed replacement, the RDA would pay for it. But this is no longer the case.

There have been a few suggestions and options shared about how to financially help the arts moving forward. One option is to not cut city funding 100 percent but something less. A second option would be to charge a ticket surcharge of $1 on each ticket. A third idea was to create property tax based assessment district to fund the arts groups, however, there is already an assessment distrint in the downtown to pay for cleaning, which has been very successful. Another contemplation is to fund repairs with a Hotel Tax (TOT), but that would bump something else. Finally, the suggestion of providing validated parking for attendees was requested if entrance fees were raised.

Some of the art leaders pointed out it is difficult to raise funds for building repairs since they do not own the building. One idea discussed at the Economic Development Committee meeting was to simply give them the building in lieu of continued fiscal subsidies, allowing art groups the potential to increase fundraising. This would allow them the option to sell the naming rights to a company or a patron of the arts like the famous Medici family. Naming rights would be easier done privately than through the city.

While we are at it, I think all San Jose facilities should be on the table for paid naming rights, including the airport and Convention Center.

The fact is, downtown is a hub for cultural activities in Santa Clara County, and that art is a differentiator from other cities. Some arts groups have said they may leave downtown, but I believe that would be a huge undertaking to find another building that can house their needs.

The city has been a substantial “donor” in the past, but this “donor” is suffering and may not be able to do so at the same level for the foreseeable future. This “donor” may only be able to donate one more time by donating the building—as long as the art institution continues to operate in that specific building.

Looking back at the efforts of so many across all cities, we know it is much easier to support a downtown than create one. The arts are a major differentiator for downtown.

In a quest for even more affordable housing in San Jose, the City Council voted 10-1 to amend the North San Jose Area Development Policy. I voted no.

San Jose, known for its propensity to approve 99 percent of proposed housing developments, continues to go down the same road. North San Jose is a Redevelopment Agency (RDA) zone, and any housing built in a RDA zone historically must allocate 20 percent of the units for affordable housing. However, the “Palmer Case” changed this so rental housing developments cannot be mandated to set aside affordable units. But housing for sale still has the 20 percent affordable requirement, if a city has an inclusionary housing policy like San Jose.

So, of course, the only thing being built now is rental housing, because it doesn’t have to put aside 20 percent of the units. However, the city of San Jose policy incorporates an affordable housing policy by allocating total housing units by market rate and affordable for different phases of North San Jose development. Now that all of the market rate units have been allocated, this leaves only unused allocation for affordable units. The allocation for affordable units exists because they require millions of dollars in subsidy from the city of San Jose housing department to build. This well is a bit dry now due to the potential elimination of RDA.

Tuesday’s proposal is to enter into a development agreement for additional housing developments, which will be entitled if the developer (wink-wink) allocates 20 percent of the units for affordable AND pays money into a fund to help finance other 100 percent affordable housing projects in North San Jose.

As a result, not only do you get more housing, but you also get more of it by not paying the same taxes and fees as market-rate housing. How do we build a tax base to pay for police and libraries if we allow exemption from taxes? How do we pay back RDA bonds with tax increment if an affordable housing development is not taxable and, therefore, creates no tax increment?  How do we pay to pave roads if there is an exemption for paying road paving fees? Do you feel that a future general tax increase will already be allocated to pay for exemptions?

School districts also lose out, as more than 50 percent of every property tax dollar goes to K-12 school districts compared to approximately 10 percent for cities. So, you have more students from new housing yet no new property tax revenue to pay for instruction.

Remember that San Jose has been the leader in providing affordable housing in the state of California, while other cities have done very little. As I wrote about on a prior blog, affordable housing must be a shared goal and not just in San Jose, because there is a burden to existing residents.

I think a better idea would be waiting until the California Supreme Court renders its decision on RDA in January. If the courts kills RDA, then there is no more 20 percent affordable requirement. The other option is to strike the affordable component from the North San Jose Development Policy, so San Jose can get the maximum amount of property tax, park fees and road paving fees.

Alas, the heavy heart of San Jose makes it difficult to think about the bottom line.