Several months ago I wrote a blog “Try It Before You Buy It,” where I spoke about the importance of making sure that the city has the option of using technology before actually purchasing it. I shared how large organizations struggle with information technology (IT) implementations when dealing with vendors who often make promises that differ from the actual results received. I also pointed out how the VTA and City of San Jose have spent millions on unwise technology decisions to purchase software.

Since my first council meeting, I have asked “perspicacious” questions regarding software expenditures. Questions that I asked included: What is the return on investment (ROI)? Have references been checked? Was piloting the software allowed? If so, did city staff use the software? Was web-based software available?

Sometimes I think I might come off as “prickly.” However, it is important to me to ask these questions—to dig deep. In my opinion, if a company wants city money, then staff needs to make sure they drill the company hard so that at the council meeting, staff is ready to make the case.  From my private sector experience, a private company will not shell out dollars without making completely sure they are getting exactly what is promised, because if they don’t, they could go out of business or people would get fired.

Let me share an example of what I am talking about. In May 2007, the San Jose Parks Department proposed spending a one time, drop-in-the-bucket amount of $1.6 million on software to manage the scheduling of parks, reserving facilities and family camp. The scheduling and reservations were previously done by hand on paper.

I challenged the expenditure and asked the questions I mentioned above to staff. I wasn’t completely satisfied with their answers, and it appears when it came down to it, they were not satisfied with their answers either. They took on the challenge to investigate my questions further; they went looking to see if money could be saved and if there was a better, more efficient alternative out there.

I am happy to say that staff exceeded my expectations (and I think their own) and brought back a much better proposal in December 2007, which the council accepted.

Staff began by doing a very thorough ROI, justifying the expense by the amount of hours it would save city workers at the community centers. Then, staff chose a web-based solution which is hosted and reduces our upfront and ongoing costs. The amount for this new alternative: $125,000. Yes, indeed.  So, we might have—could have—spent $1.6 million in one-time money for the same solution that we are spending $125,000 on instead.

The $1.6 million proposal is the typical software sale of massive upfront license fees and servers. However, the $125,000 proposal does not require servers or massive upfront dollars. Instead, we spent $125,000 on implementation and training and received a better model.

The city would have owned the software with the $1.6 million dollar option. However, we do not want to own it. Ownership equals expensive and timely upgrades, bug fixes and daily maintenance. Plus, in five years the software and servers would be outdated and we would have to spend more money to update them. Thus the process of spending to keep up would be never ending.

Also important to mention is that the city does not pay any future fees for this purchase. The costs are covered by fees the users pay when they book a room or recreation area. So residents can make reservations from home on the internet vs. driving down to the community center. The vendor of the software company makes money over time based on a portion of individual user fees instead of $1.6 million up front.

My value-add is that I can do my part in trying to save the city money when I can. Every bit of money saved is a good thing in my book. With money saved—especially on technology—we can help pay off the deficit, hire public safety officers and fund traffic calming.

Last week the San Jose City Council discussed the issue of co-payments for retired city workers and their dependents. The recommendation from the city manager was to defer adding co-payments for one year to allow more time for this issue to be researched. Whatever the outcome, the decision will affect 3,000 retired city employees, including dependents, and the city budget.

The city would save $1,121,000 by applying co-payments to retirees and their dependents. This is quite a savings in itself—even more of a savings when you look at the city’s deficit.

Why is the topic of co-pay being discussed?  Well, the fact that applying co-pay could save the city money is a good reason. Also, co-pay makes those who choose to go to the doctor accountable. For example, if one does not have to pay to see a doctor, then the service might be overused since it is free. If the city applied co-pays for each doctor visit and prescription, it would make one think twice about the necessity of a doctor visit.

This is largely due to the effect of “consumerism.” Employers find that having co-payments reduces health insurance premiums; however, by doing so it increases out-of-pocket costs. I have always had a co-payment attached to any and all of my doctor’s appointments. In addition, both my parents, who are retired teachers, make co-payments with their Medicare and out-of-pocket private insurance—no exceptions.

The issue here is what the city has “promised” its retirees and making sure the city keeps its promise. An overhaul of retirement benefits will not happen soon; however, thoughtful ideas should not be ignored.  I think there is an opportunity for the city to keep its promise to retirees and save the city money.

One idea that I shared at the council meeting last week was to apply co-payments with the security of the city reimbursing the retirees and their dependents for them.  For instance, a retiree would go to the doctor and pay a $10 co-pay to see a physician.  The retiree would receive a receipt for the co-pay and mail it in to the city who would reimburse the retiree 90 percent, or in this case $9.

Let’s take, for example, that all 3,000 retirees/dependents go to the doctor four times a year and receive a monthly generic prescription twelve times a year. The twelve prescriptions would be $54 and four visits would be $36, which totals $90. (Original out of pocket for beneficiary is $100.) Therefore, $90 x 3,000 retires=$270,000. You then have the “difference,” or, better said, the “savings” to the city of $851,000 (the difference between $1,121,000 and $270,000).

Now, some of you out there are probably saying that it will cost the city more then $851,000 to manage the reimbursement.  I have an answer for you: No, it won’t.

The city could easily implement a system that allows for reimbursements of this nature. For example, we could spend a few hundred dollars for Quick Books online—a web based system. Then, the city could import, via Excel, the information of all those eligible for reimbursements—retirees and their dependents—into Quick Books. Then, when a retiree/dependent receives their receipt, they can mail it in to the city and the (one) accounts payable person will enter the receipt into the system and mail the reimbursement check. The city auditor could have real-time access to Quick Books to oversee the transactions. Another viable alternative is that we consider contracting with a reimbursement service as is done for State of California employees.

Of course there are variables; however, I think it is important to ask the question: How can we do both? How can we keep our commitments to retirees and save the city money?  The answer does not have to be one or the other.

Saving the city money and keeping promises can be accomplished.  It’s not easy, but those involved, including me, are going to have to try harder to find the middle ground.

As I bid 2007 goodbye and welcome 2008, I think of the many issues that my colleagues and I will be working on in one way or another. Whether balancing the budget, protecting our resources like industrial land or implementing the mayor’s Green Vision, among others, it will take collaboration, perseverance and, above all else, a good sense of humor to keep us all in check.

As I make my list of resolutions for 2008, I have decided to make an attempt to not get “stuck” in the office. If I really want to learn more about San Jose then I will need to spend time in the field and explore the different facets the city has to offer.

San Jose reminds me of a jigsaw puzzle where the neighborhoods are the pieces and we are trying to make them all fit together. Each neighborhood and district has its own history and demographics that are unique.

All ten districts are drawn according to population. Therefore, when the population changes in each district, the boundaries of the districts are then redrawn. For example, does anyone remember when former Mayor Hammer represented District 3?  Well, guess what? Susan hasn’t moved but she now she lives in District 6 because district lines fluctuate.

I love my district because I am familiar with it. I was born and raised here and now own a home here. However, insulation is not something that one should base citywide decisions on. I want to challenge myself to go outside of my comfort zone and explore San Jose and all its wonders.  Therefore, I have decided to tour each district with its councilmember. This is sort of like “shadowing” different occupations within a company like engineering, marketing, sales, operations, etc.

I could continue to go out on my own and investigate each district; however, I would rather look to the “experts”—my fellow elected colleagues—for their expertise regarding the districts they represent. Sure, I have lived in San Jose for 38 years, but so many things have changed and will continue to change that I feel touring the districts will be a good start for 2008.

I am in the process of scheduling a tour with each councilmember. I started my tour with Councilmember Madison Nguyen who represents District 7. It was good for me to listen to Madison explain the different areas, points of interest, etc. in her district. The opportunity to listen to my colleague outside of the office on her turf was a great experience for me. I learned so much more from actually being there than I would have by reading a memo.

Life is good in San Jose. I have a feeling that 2008 is going to be a productive year.

This season is a fun time of year—getting together with friends and family whether it is for Christmas or Hanukah or another celebration—with holiday parties, a lighter work load due to the end of year, shopping for gifts for loved ones and getting extra rest. This is also the time of year for enjoying the plentiful decorations that compliment our city.

San Jose is a destination point for holiday celebrations. Our city is known for its traditions of Christmas in the Park, skating under the palms, and the beautifully decorated Fairmont Hotel. In addition, there are the many neighborhoods that go all out to decorate for the holidays.

I like to take the opportunity to drive around the neighborhoods and look at all the decorations and lights. Some homes are decorated with the intensity of Chevy Chase’s home in National Lampoon’s Christmas Vacation, but without all the chaos. There are many streets in Willow Glen and the Rose Garden where house after house have Christmas trees on their front yards. This has become a tradition over the decades and is growing in other neighborhoods as well.

I would like to share three favorite locations that I enjoy visiting each year:

Cherry Ave/Glen Eyrie Ave:
Five home owners got together and combined forces. Each home has a huge reindeer, including Rudolph. One home has Santa suspended in the air so it looks like he is flying. The sleigh is connected to the reindeers by lights on a string.

Cherry Ave/Robsheal Dr:
An actual live Santa sits on the porch in the evenings for photo ops. The display includes lights on the roof and many scenes on the lawn. This family takes donations for the Make-a-Wish Foundation. With lights on the roof and displays galore they must have a massive PG&E bill. However, be aware that they take their lights down on December 26 every year.

Minnesota Ave /Newport Ave:
This beautiful historic Victorian is lit up each year. The attention to detail with lights is breathtaking.

Please take this opportunity to share homes or neighborhoods that you enjoy visiting.