Oliverio for Supervisor 2018

Independent - Transparent - Fiscally Responsible

Like Berkeley and Santa Cruz?

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Berkeley and Santa Cruz have a reputation of voting on proclamations or supporting causes that are outside their domains, such as the independence of Tibet, the genocide in Darfur, and federal issues like immigration or going to war. Topics like these are worthy of discussion on a blog, in person, or for our elected officials in Washington DC. However, is it the best use of time dealing with these at a level where you have limited influence instead of spending time on what you can really make an impact on? Like the “City” Council meetings?

Last week we were asked to support certain federal bills. These bills start one way and then end up out in left field, and before you know it, you are supporting a bill that has a pork barrel amendment that is paying for a bridge in Alaska.

One particular bill was on immigration—a program for people from another country being able to live and work in the US. (I do acknowledge that a sizable portion of our agricultural labor is made up of non-US citizens.) My job as a council member gives me plenty to do already, and having to read through federal legislation on top of it is too time consuming. The city does not have a role in immigration or agriculture. These are issues that must be dealt with at the national level.  I do believe in supporting legislation that directly impacts the city, such as transportation legislation with dollars tied to a Santa Clara County project, for example.

In discussing the immigration bill at the council, it was said that it would help with the escalating food prices we have seen locally. Actually, food prices are rising globally and it has little to do with farm labor. We have seen riots break out over food in Haiti, Pakistan, Bangladesh, Senegal, and Cameroon, where 24 people died. In fact, hoarding rice in the Philippines is now punishable by life in prison! Prices for rice since January have soared 141 percent, and prices of other grains have also risen sharply.

The reasons for price increases are the growing affluent populations of China and India, who are eating more grains and meat, as well as using grains for biofuels like ethanol, quotas and tariffs that restrict trade, and the USDA paying farmers not to plant crops on their land.

Whatever the reasons, I just don’t see it as my main focus on the council to spend 30 minutes peeling back the onion on all the nuances and amendments in a single federal bill that does not have a direct impact on San Jose. I remember as a candidate filling out questionnaires for organizations that asked me federal questions, and I would write in “N/A” or “bogus.”

NOTE: If you happen to be reading this on Monday, April 28, there are three important meetings that deal directly with San Jose tonight. One is the General Plan 2040 which will be discussing water and population growth; another is the 3-Year General Fund Structural Deficit Elimination Plan Stakeholder Group; and, finally, the Mayor’s Gang Prevention Task Force.  Public comment is welcome at all the meetings.

Alcohol and Carrots

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Last Tuesday, the city council had two agenda items to vote on that would allow for applicants to sell alcohol: one for a Whole Foods grocery store and the other for a gas station.
State law limits the number of liquor licenses in an area. The City of San Jose went one step further by blocking certain new liquor licenses at the planning commission level. The planning commission must deny liquor licenses so they are heard at the council level upon appeal. I understand this is because the prior council wanted to ensure that the council would hear liquor license applicants. Unfortunately, I think the extra step is a hurdle in encouraging new grocery stores.

Who should sell alcohol? Restaurants? Grocery stores? Gas stations?  My answer: grocery stores and restaurants. I believe we should use the prize of a liquor license as a carrot to promote neighborhood-facing businesses.

Liquor licenses are a source of major revenue for the grocery and restaurant industry.Most grocery stores and restaurants would go out of business if they did not have a liquor license. The profit margins from alcohol allow for the creation of new business, jobs, sales tax and community. Residents feel a sense of community around grocery stores and restaurants as they are where we gather.
In a prior blog, I wrote about grocery store economics and the sad fact that grocery stores are missing in San Jose’s neighborhoods. I think of the many grocery stores that have closed and have been converted to gyms, drugstores, discount shops or, worse, converted from commercial land to housing. Grocery stores make very thin margins on food, but they make good margins on beer, wine and spirits. Carrying a variety of different products is how grocery stores keep the doors open.

There are arguments that if you grant a liquor license to a gas station, they will make more money which they can use to spruce up the station. I acknowledge this point and would agree. However, what happens if one gas station gets a liquor license and the one across the street doesn’t? What happens when all the gas stations in one area take all the liquor licenses? What happens when someone wants to open a grocery store or restaurant in an area that is already concentrated with liquor licenses and they are not able to open for business? Let’s face it: alcohol will produce profits for anyone who sells it.

Can you imagine a young family buying a house and one spouse saying to the other, “Wow, honey, let’s buy this house. Even the local gas station sells beer!” Or, can you imagine the same person saying, “Let’s buy this house. It even has a neighborhood grocery store.”

I voted for the grocery store and against the gas station. Both passed.

One Year-One Regret

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The end of March marked my first anniversary as an elected official. As I reflect on my first year in public office, I am amazed at all the different topics I have been involved in as a councilmember. I am pleased that employees who work at companies like Cisco and Adobe are now allowed to volunteer in our parks and that the Rose Garden was adopted by volunteers. I am ecstatic that Coyote Valley has been shelved—for now. I am feeling positive about the evolution of residential towers downtown and saving our city money on technology.  The council is making progress with balancing the budget and I enjoyed being part of the efforts of updating the traffic calming policy.

With that said I still have one vote that causes me pain—literally. After reading my blog for a year, do you want to try to guess which one it was?

I think we can all relate to experiencing a bit of trepidation when we start a new position at a company. When you start a new job you inherit what was there before. You might be asked to complete a project; the only problem is that you don’t agree with it.  It’s too late to stop it, promises have been made and people are depending on it to be finalized and it’s up to you to see it through.  Because you are new, and you don’t want to let people down, you do what’s expected.

A month into office there was a land use proposal before the council to convert industrial land to housing on Lincoln Avenue. I am against land conversion, as you may know. My gut said no. In fact, it screamed NO! It is not the right decision to convert light industrial land to housing! The loss of jobs! The strain on city resources! STOP! Time Out! Especially when there are large parcels right next to this one already zoned for residential.  This particular industrial land was in a much better location then the widely publicized Evergreen industrial land that the council voted down the same night.

As usual, the landowner whined that the land sat vacant for years and that no company wanted to locate there. The problem with that line is that a few months after the vote, a new company called Vocera Communications relocated to San Jose from Cupertino. Vocera, the leader in “instant voice” technology, brought 100 high-wage jobs and a business that produces sales tax. Just think if the land Vocera is now sitting on had been converted to housing. Who knows where Vocera would have ended up. Sunnyvale? Campbell? Santa Clara? Sometimes land needs to sit idle to allow for greater future opportunities.

This project was supported by my predecessor. In fact, District 6 had lots of commercial/industrial land converted to housing in recent years. For example, Fiesta Lanes and Lou’s Village on West San Carlos were both commercial properties. Also, K-Mart on Southwest Expressway/Fruitdale and Del Monte Cannery were on industrial land in the midtown specific plan that got converted to housing—tax revenue-generating land that was lost forever.

In this particular case, we had a savvy property owner and lobbyist that chose to work with the community over an extended period of time regarding design and height, and who was offering amenities like trees. Hold me back: trees, the carrot that gets the community every time. What would we have done without the developer including trees? Well, I recently spoke to the RDA Director and I could have provided the area with trees without having to convert land.

Don’t get me wrong, I don’t blame anyone but myself.  Even if I voted “no,” some members of the community supported it. They even showed up and spoke in favor of the project. In reality, my “no” vote may not have made a difference on the council since it was a unanimous vote and the project would most likely have passed.

This is my City Hall diary and I wanted to share with you that I do have regrets. In fact I have had retrospective conversations with other elected officials and they have regrets as well. My diary is open so you see the good and the bad. What I have learned is that I will listen to my gut as I move forward on votes that are best for the future of San Jose—and even promising me trees won’t change me.

Fund Thyself

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A month ago I drafted a memo that would expand the city’s ordinance to allow Community Benefit Improvement Districts (CBID). This is not an original idea, nor is it cutting edge. In fact it’s embarrassing that the City of San Jose didn’t jump on this opportunity sooner. Other major players who have implemented CBIDs successfully include, but are not limited to, San Francisco (Japantown), Oakland (Koreatown), Los Angeles (Chinatown) and San Diego (Little Italy). CBIDs are similar to a Property and Business Improvement District (PBID), where landowners vote to assess themselves to pay for services in a geographic area. Downtown San Jose just formed a PBID to provide cleaning services. Recently, the Mercury News published an article about the guys on machines cleaning the sidewalks in the downtown as a result of its newly implemented PBID.

CBIDs provide greater flexibility in the formation and operation of such predefined business and residential districts. They allow commercial and residential property owners to participate, and allow for longer initial terms for assessments so that CBIDs may borrow much like cities borrow on bonds.

In the paradigm of restricted resources, where municipalities (like San Jose) do not have budgets to take care of value added services to business districts, the least San Jose can do is provide options where property owners may organize and take care of their own needs. I am a firm believer that the city needs to provide options that allow property owners to assess themselves so that they can raise funds by “taxing” themselves appropriately in order to provide for themselves.

Many people may not realize this, but Lincoln Avenue, the “main drag” for pedestrians in Willow Glen and one of the city’s famous destination points, does not receive annual funding from the Redevelopment Agency (RDA).  Lincoln Avenue is currently home to the Business Improvement District (BID), where business owners pay a yearly fee to fund for Founders Day, Dancing on the Avenue and other expenses they pay on their own.  However, that may soon change.

Property owners on Lincoln Avenue have been waiting for over three years to implement a CBID, and they are moving forward with forming their CBID as I write this. A CBID can be formed anywhere in city of San Jose, now that the council has approved the new ordinance. With CBIDs, even residential areas may “tax” themselves for funding items like antique lights, landmarks, signage, and tree plantings among others things.

Adopting another option for our small business districts is a good thing and it does not cost the city money. In fact, CBIDs might just save the city money and generate tax revenue. With districts able to raise money to keep their streets clean, market regularly and provide other amenities to their area, more people will come and shop. With people spending money on items (physical objects), a portion of sales tax revenue will go directly to the city’s General Fund.

CBIDs will not fix the structural deficit, but providing property owners another option that has been successful in other major cities across the United States just might be a good thing for San Jose as well.

Viewing Past Performance and Future Needs When Voting

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The council meeting last Tuesday evening lasted until almost midnight. The council discussed and voted on the Mayor’s Budget Message, San Jose Medical Center and Mexican Heritage Plaza. I was happy to see the budget discussed at night so more people were able to attend.

San Jose Medical Center (HCA) has been closed for several years and sits on 10 acres in downtown San Jose. HCA, a nationwide hospital provider, would like to knock down the buildings and sell the land (which they own) for development.  (Incidentally, this was the hospital where I was born and it has served many of our residents). San Jose is not in the hospital business, however; we are in the zoning business. I voted yes to maintain the land for healthcare uses. Land is precious and becoming increasingly rare. Once land is built on, it’s gone forever. As more living units are built downtown, the need for a medical facility will only increase. In addition, public transportation in our downtown enables more people to access healthcare at this site then other places in San Jose.

Mexican Heritage Plaza and the Mexican Heritage Corporation (MHC) have been questionable for years. Their stability and revenue issues have been deteriorating, making the city their main financial provider because private donations have not backed this non-profit. I have attended several theater events at the Plaza and one of the community meetings regarding the future of the Plaza. Many community members and numerous city staff attended the community meeting also.

Although the intentions of the Plaza and MHC are noble, good deeds do not pay rent.  With the city spending millions on various non-profits every fiscal year, I think that San Jose needs to make sure that these non-profits are able to sustain themselves. It is clear to me that the MHC and Mexican Heritage Corp. have many issues. Therefore, I voted no on the proposal put forward that night.

My preference would be to just start over, let MHC go bankrupt, and the city takes over maintenance of the taxpayer-funded Plaza in the interim. I don’t want to sound too simplistic, but I think the possibility of contracting an individual to organize and oversee the Mariachi Festival, and another to run some limited arts programming at the Plaza, would meet the overall needs until a new organization could emerge to fulfill the mission of the Plaza. I hope they can make it work, but it will take more city funding and a lot of city staff time either way. I am not sure it is fair to other non-profits who offer good services to the community and maintain their books

Also, on last week’s blog I was asked how much accrued sick pay the City of San Jose pays out each year to employees. Here is what I found out:

Yearly Totals
2007 $5,521,043.53
2006 $4,608,181.67
2005 $6,900,550.27

Breakdown
2007
$2,284,709.02 Non-Sworn
$2,703,006.37 Police
$533,328.14 Fire

2006
$1,769,950.33 Non-Sworn
$2,290,894.69 Police
$547,336.65 Fire

2005
$2,880,819.10 Non-Sworn
$2,966,035.61 Police
$1,053,695.56 Fire

Sick time should be used for illness and not a large payout at the end of a career. Based on the rolling average above, this money could be have been used to hire additional police officers or other needed personnel to pave roads.

Black, White and Grey

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Last week I wrote about exploring furloughs instead of layoffs to balance the budget.  Part of my job is to come up with ideas/solutions to issues/problems. There are lots of departments in a city our size and lots of different opinions. What one department sees as black, another may see as white, and yet another, grey.

When it comes to the question of the December shutdown of City Hall (200 East Santa Clara), the reality is that it is not the same as a private sector shutdown where employees simply do not get paid regardless of accrued vacation hours.

During our shutdown we don’t save much money since 90-95 percent of employees use their vacation hours or personal leave hours. However, we do save indirectly by clearing the vacation hour liability off our books.  Both public and private accounting view vacation hours as a liability since they must be paid when people leave or retire.

In private companies, there tends to be strict limits on the amount of hours that may be accrued—say 160 hours for example. When one reaches this point, there are no more hours that can be saved, so one needs to take time off or misses the ability to accrue. Our city is generous and allows twice the annual amount of vacation hours to be accrued. So depending on the bargaining unit and years of service, a city employee may save between 240-400 hours.  Historically the city has made large monetary payouts when people leave or retire, especially those whose incomes exceed $100,000.

Whether it is a city’s budget director or the CFO at a company, shutdowns that use vacation hours still require an outlay of capital on payroll. If you talk to a human resources department, it is viewed from the benefits side on whether or not one may use vacation hours during a shutdown.

A true furlough, or a single day off per year “without pay” for ALL employees, would save San Jose $3 million. That money would avoid many layoffs and continue to give services to the residents of San Jose.

I still propose that the city meet and confer with unions to explore a true furlough that avoids layoffs. In addition, we should examine the amount of vacation hours that can be accrued.

A blog should be an exchange of ideas—some interesting, some thought provoking and some with another adjective that you can insert.

In the end, the budget leaves tough choices that will be upsetting to both residents and labor.  The goal is to come up with ideas that leave both intact.

The budget will be discussed at City Hall tomorrow, Tuesday March 18, after 7:15pm.