Oliverio for Supervisor 2018

Independent - Transparent - Fiscally Responsible

Civil Service Rules

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The City of San Jose has adopted Civil Service Rules that state what is and what is not allowed in regards to employment. The City Charter allows for changes to Civil Service Rules by a Council vote, and does not necessarily require a city-wide election.

SECTION 1103. Civil Service Rules; Manner of Adoption.

Civil Service Rules for the Classified Service shall be adopted, and may from time to time be repealed or amended, by ordinance of the Council. Upon adoption, Civil Service Rules shall have the force and effect of law.

The Council may adopt, repeal or amend any Civil Service Rule for the Classified Service, provided it first receives from the Civil Service Commission a report or recommendation with respect to the proposed new Rule, if a new Rule is proposed to be adopted, or with respect to the proposed repeal or amendment of an existing Rule if an existing Rule is proposed to be repealed or amended; provided, however, that if the Civil Service Commission refuses or fails to submit to the Council a report or recommendation on any proposed new Rule, or proposed repeal or amendment of any existing Rule, within ninety (90) days from and after the date the Council requests such a report or recommendation, the Council may adopt such new Rule or repeal or amend such existing Rule, without first receiving a report or recommendation thereon from the Civil Service Commission.

The years ahead for local government will be tough, as property tax revenues will continue to be low and the true costs of pensions are revealed.  If layoffs are inevitable, then let’s examine the current system of layoffs by seniority.

The current method means we lose some of the most productive people and create a large age gap if/when we are in the position to hire down the road. Instead, perhaps we should look to see if there is an alternative that might involve employee performance as well as seniority. Maybe only lay off employees who are evaluated as “needing improvement” before laying off productive employees with less seniority. Or if two employees have nearly equal seniority, leave some allowance for merit—such as education, training, evaluations and certifications—to be used in the final determination.

Also, we should explore allowing those that are closer to retirement the ability to choose on their own accord to retire early in a way that would still provide the savings to balance the budget. Employees with more seniority are paid more than those with less seniority, so a change may allow fewer layoffs of city employees that provide services to residents.

I believe the Civil Service Commission, chaired by Bill Brill, business representative for IBEW union Local 425, should review and give their recommendation to the City Council in 90 days per the City Charter.

Thanks to Friends of the San Jose Rose Garden who hosted a great volunteer event on Saturday. Many unpaid volunteers braved the cold to help keep the park looking great. Special thanks to Terry Reilly, Beverly Rose Hopper and Myles Tobin for the heavy lifting.

Click this link for a short video of Saturday’s volunteer event at the San Jose Rose Garden.

Google vs. Microsoft

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More than a year ago, the San Jose City Council was presented with renewing its Microsoft desktop licenses. This can be an expensive line item. We have spent over seven figures in the past for licensing alone on this item.  I thought to myself, and later spoke at the Council meeting, that there is no real competition for this purchase we were about to approve and wondered if we could do better. In the end, we got a government discount from a Microsoft reseller, but it was not truly competitive since Microsoft did not have any competition at City Hall.

Do you remember how Netscape used to sell web browsers? Fast forward, and now, with competition, web browsers are free. So I thought: Why not inject direct competition for our email and Microsoft Office applications?  Google offers free email, calendaring, documents, forms, spreadsheets, presentations, etc., in a Software as a Service (SaaS) model—also called cloud computing.

With competition I think we may get a better price next time we renew. Or we may find a solution where we discover more value.  So outside of price, since Google is free, it’s a good deal (one can pay a small annual subscription for customer support). But there are other attributes as well.

First, one does not get stuck on old software, since Google is SaaS, which constantly updates the software. As a result, your information technology (IT) team does not have to update the server and the individual computers for upgrades and bug fixes, keeping your internal IT costs down.  Also, an organization is not dependent on the IT person who runs the Microsoft exchange server. In most cases, if the person responsible for this item leaves, then the organization will have big problems. Google makes it much easier to manage, thus the city would not be dependent on a specific IT person.  Google also allows for improved public records act requests by simply searching every email with keywords.

Personally, I enjoy collaboration via Google Apps in being able to share documents in the cloud (no vpn needed) under revision control with others in real time. It also allows the author to share or edit the document. No more going back and forth, sending endless emails with out-of-date revisions of a document.

At our Dec. 14 meeting the City Council approved a 12 month pilot of Google Apps that I initiated. There is no cost or obligation to purchase. We look forward to competition for our city dollars. (I do not own any shares of Google.)

Tax Base Erosion Night

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It is that time of year again, with lobbyists circling City Hall in preparation for the General Plan hearings.

With the leadership of Mayor Reed, modifications to our General Plan (GP) have been reduced to once a year, for the most part. At the GP hearings, applicants make their case as to why current land-use designations should be changed to allow for the applicant to build what they want, regardless of how the land is currently zoned.

These “conversion” requests are typically for land that is industrial/commercial to housing.  Or it could be extending the urban growth boundary to allow for more suburban sprawl. By the way, San Jose currently has over 21,000 units of housing approved and entitled on land zoned residential that has not started construction.

With more conversions of our industrial, commercial and retail land, we are pecking away the tax base a little at a time, which narrows our future options down the road.

Either you view San Jose as a dead city with little chance of economic growth (so go ahead and convert each proposal put before you because it doesn’t matter), or you have the view that there is future potential for San Jose to bring more small business and large business. I feel San Jose has not reached it’s potential but will be severely handicapped if we allow death by a thousand cuts when it comes to land use. San Jose will be fighting for a smaller piece of the economic pie in the United States as globalization continues and our national debt reels out of control. San Jose should control it’s destiny by standing firm in not changing land-use designations to housing.

At the budget hearings on Nov. 18, I shared that I would have a very difficult time asking employees for wage concessions if the Council cannot hold the line on the conversion of employment land. Seems only fair: If you are going to ask someone for money to pay your utility bill, don’t leave the furnace on all day when you’re at work. The Council has had to tell residents and employees “no” this fiscal year because of past decisions. I cannot and will not jeopardize more city jobs that provide services with conversions that hurt our future tax base.

In one of my first votes on the City Council, I voted to rezone industrial land to housing. I later wrote about my regrets regarding this vote.

One of the proposed exceptions that the Council denied in May 2008 on a 6-5 vote is back again with a different lobbyist. The same property owner also owns land where the proposed baseball stadium would be located. I met with the property owner representatives who said if the City would rezone this piece of land then they would consider selling the other piece of land to the City for baseball. I believe each rezoning should be judged on its own merits and not tied to a quid pro quo. I wrote about this property the last time it came to Council.

Exceptions to our General Plan (tax base erosion) will be heard Tuesday, Dec. 7, not before 7:15pm. I would be impressed if more than one person, whether it be city employees or San Jose residents, would speak at the Council meeting and simply say, “hold the line—please do not convert our future tax base.”

Congratulations to the Willow Glen Rams winning the CCS Division 2 Football championship over Sequoia of Redwood City. An incredible season that rallied the school and neighborhood. The star quarterback is the son of my classmate and friend from Willow Glen High. Sadly, my friend passed away from cancer several years ago however his son is the spitting image of his father, which makes it a very special victory.

Budget Planning for 2011-2012

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Last Thursday, the council had a study session for San Jose’s 2010-2011 budget. The public meeting received little media attention. Perhaps, since the holidays are near, we only want to hear the good news…and next years budget is far from good. There is no dispute on the data—just the direction we shall choose to balance the budget.
Here is a link to the 88 page presentation given to Council by the budget office. (Click on “2011-12 Organizational & Budget Planning” to view the presentation.)

The Council was challenged by the grim financial data and gave direction to continue with the 10 percent total compensation cuts that was requested last year. This is not an additional 10 percent but rather a request to keep the current 10 percent concession that was already agreed to by some of the labor unions. The 10 percent concession that several of the unions agreed to last year were “one time only,” meaning only for this fiscal year (2010-2011) and not ongoing. The three largest unions did not accept the 10 percent reduction last year and one actually got a raise.

If the Council chose not to ask for 10 percent pay cuts and spare public safety we would layoff two of every five non-sworn positions. So two out of five librarians, attorneys, IT staff, finance, auditors, code enforcement, planning department, public works, department of transportation, economic development, community center staff, etc….This would result in 81 percent of the budget allocated to public safety. If however 10 percent total compensation cuts were achieved then 72 percent of the budget would be allocated to public safety. (Slide 32)

Outsourcing is back on the table as a way to reduce costs and keep other city departments from having more layoffs. Last year we outsourced janitorial services which resulted in a $4 million savings and the facilities are just as clean.

I made several statements from the dais that included:
• not converting employment land to housing
• eliminating discretionary funding of charities with Healthy Neighborhood Venture Funds
• not raising fees so we become uncompetitive with our neighboring cities,
• keep the jobs/revenue team in place for companies locating to San Jose,
• Council should be limited to how many memos (flavor of the day) for new policies they can submit in a year
• rank current staff workload on what is most important (selling Hayes mansion and getting out of golf business)
• allow for union negotiations to be done in public
• instead of closing fire stations or laying off police officers reduce staffing at the slower fire stations to the same staffing levels as our neighboring cities
• finalize a new retirement system for new employees
• new facilities not be opened with full staffing
• outsourcing park maintenance or look at outsourcing by attrition where we hire private contractors as people retire
• look at new revenues once Council makes the hard decisions
• over time look at taxes that have positive environmental results and not only focused on property owners like parcel taxes instead look at solid waste dumping fee and the utility tax (water, electricity & gas)

We are suffering from severe financial duress; however, we do have options, as I have shared above. Perseverance and goodwill are not dependent on budget numbers, therefore “this too shall pass.”

Annexing County Pockets

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During the past few years, the City of San Jose has annexed 42 county pockets. These annexations came about in two ways. First, the State of California changed the law that made county pockets that are under 150 acres unable to vote on whether not they wanted to be annexed. Second, the County of Santa Clara had wanted San Jose to annex county pockets for years. San Jose avoided the topic until there was a court settlement with the County where the City agreed to annex a portfolio of county pockets from west to east based on the “sphere of influence”—lines that have been drawn for decades that indicate which cities county pockets would be annexed into.

By default, county pockets are different depending on their location and needs. Some county pockets have a high crime rate and gang activity while other pockets have an extremely low crime rate and no gang activity. Some county pockets do not have storm sewers, streetlights or sidewalks while others do have such infrastructure. The more affluent county pockets have higher real estate values and therefore bring in more property tax revenue to cover services while less affluent county pockets have lower property values and thus lower property tax revenues.

Last week, the city voted to annex the last under-150-acre county pocket in District 9 that is surrounded by San Jose on three sides, a combination of commercial and residential which is just down the street from the Camden Community Center. The commercial properties are along Camden Avenue and Bascom Avenue while the residential is tucked away in a neighborhood of single family homes in the $800K range.  The majority of residents of this particular county pocket wanted to be annexed by Campbell instead of San Jose. They spoke at the council meeting to how they identified with Campbell and not San Jose since they liked a small-town feel and Downtown Campbell was closer then Downtown San Jose.

There was also a concern about response time for fire, so after further study it was concluded that County Fire, based on geographic location, would continue to better serve the residents. Therefore the current fee for the fire district on the homeowner’s property tax bill would continue to go to county fire so the service would not change.  Due to the higher property value of the homes and the commercial land this annexation resulted in positive revenue for The City of over $230,000 per year. While prior annexations will cost the city money due to less revenues from property tax this one was positive. So going against all the speakers at the meeting the council voted to annex the pocket.

On a personal note, it was tough a tough vote for me since my childhood friend was the neighborhood association president for this county pocket and did not want San Jose annexation. It’s important for me to separate what is best for the city as a whole. If at any time I was told I could pick and choose which county pockets to annex, then I may have voted no on the pockets that were going to cost our city money.

I think if we were doing it all over again it would have been wise to annex the higher property value pockets first so we could bring in the revenue to pay for city services. Sometime in the future, and it is not known when, the City may annex the very large county pockets such as Burbank in District 6, Cambrian Plaza in District 9, two in District 7 and the massive county pockets in District 5 which would make up about a third of the entire district.

Here is the presentation on annexation that was given to the city council by the planning department.

Worst Roads, but Great Pensions

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Last week, Council dove into a study session about street paving. As you may have heard, San Jose came in last on a national survey on road conditions. This survey was done prior to the $12 million in federal stimulus money that was allocated to San Jose for road paving this summer.

San Jose’s cost to maintain roads is high due to our suburban sprawl. Total lane miles in San Jose is double that of San Francisco, which came in second for worst roads.

San Jose has 2,370 miles of road (60 feet wide) that would stretch from here to Detroit!  (Could you imagine if we continued on the notion to build out Coyote Valley and increase our road network plus the sidewalks, sewers, street lights and signalized intersections?) Those 2,370 miles of road are split between 1,570 miles of neighborhood streets and 800 miles of major streets. State and federal grants for street paving (if you get them) typically only apply to the major streets and not the majority of neighborhood 25-mph streets where we live.

Staff presented us with the dilemma that as streets wear down they are more expensive to repair. For example, to “reseal” a street in good condition may cost $35K-$70K per mile, however if a street is in poor condition the price rises to $200K-$800K a mile. Complete rebuilding of a street is the most expensive at approximately $1.8 million per mile!  So transportation engineers do their best to with the limited dollars to try and keep streets from falling into poor condition.

Some streets are being left behind since they are so expensive to repair. So, thus a trade off: Do we fix one mile of a terrible street or instead 10 miles of streets that are in fair condition? Well, if you live on those 10 miles of streets it is great; however those on the one mile of terrible street are left behind.

Inevitably, the decision to repair, rebuild, etc., always turns to money. The city has lowered it’s road repair budget at the same time as other department budgets were being trimmed. As the structural budget deficit took hold and the portion of the pie chart for road paving got smaller, other portions of the pie chart, such as pensions, got bigger. One proposal on how to pay for the deferred maintenance backlog (streets only) of $250 million (which may swell to $1 billion by 2020) was an annual parcel tax of approximately $300.

A comparison is that many households pay $480 a year for basic cable TV or $600 for high speed Internet, so paying $300 for streets each year would be just be considered another household expense.  The other factoid cited in favor of a parcel tax was that the annual cost for car repair due to poor roads is $700 a year.

Of course this $300 parcel tax was preliminary, and other parcel taxes may arise based on different properties, or a Council decision to charge a big-box store more since their store generates many car trips. Cities alone do not have the ability to raise gas taxes so parcel taxes, sales taxes or utility taxes are the main ways to raise revenue for ongoing expenses. Gas taxes make those who drive on roads pay for them; however some of the biggest culprits for wear and tear on streets—buses, garbage vehicles and commercial delivery trucks—are exempt by state and federal law from paying a fee to cities for the damage they cause.

One of my questions at the study session was: “Since the city council policy exempts affordable housing from paying construction taxes which go towards road paving, how much money have we lost and/or could have had in the coffers for street paving from affordable housing?” Unfortunately, staff did not have the answer readily available. I am aware that the city has lost approximately $80-$90 million for our parks with a similar exemption for affordable housing developers. My back-of-the-envelope calculation is we have lost out on approximately $30 million that could have gone to road maintenance.

I think it is important that we know these things since a council policy has cost implications. If we raise your taxes for road repair but then make exemptions for something else, then maybe the tax should be called an affordable housing tax instead of tax for roads or parks.

Here is a link to the staff presentation on road repair. Click on Pavement Maintenance (Street Paving) Study Session Presentation-October 12, 2010