Oliverio for Supervisor 2018

Independent - Transparent - Fiscally Responsible

Prioritizing Future City Spending

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At the upcoming Aug. 7 City Council meeting, the discussion will focus on how to prioritize city spending IF revenues increase. So, in the example below, if revenues increase by $10 million—either by revenue growth or tax increase—this is how I think it should be spent by percentage. We will still be spending money on all of the city services included in the current budget, however, this example is for future potential revenue that is above the budget passed in June:

53% — Police $5.3M
15% — Road Paving $1.5M
5% — Planning, Building & Code Enforcement $500K
4% — Libraries $400K
2% — Tree Planting & Tree Trimming by Our City Forest $200K
2% — City Attorney’s Office $200K
2% — Information Technology $200K
2% — Pedestrian & Bicycle Safety-slowing cars down in neighborhoods $200K
3% — Pay down Debt $300K
2% — Save Money for Rainy Day Fund $200K
10% — Discretion of City Manager with Approval by Council to be Distributed to Human Resources, Finance, Public Works, Economic Development and/or a Need That Becomes Apparent in the Future $1M

There is no extra allocation for the Fire Dept., as Fire Chief William McDonald and staff have been successful in obtaining federal grants. Federal grants are great in the short term, but they will make it more difficult to allocate future funds to hiring police officers—which is why the majority of future revenue is allocated to police. In addition, I agree with the 2011 Santa Clara Civil Grand Jury that San Jose could utilize three firefighters on a fire engine like every other city in the county. The data in San Jose shows that calls for service are 4 percent structural fires and 96 percent non-fire calls, mostly medical. Any cost savings from realigning resources to match call data should go to police.

We need to allocate general fund dollars to the Planning Department rather than increasing and relying on fees. Development can be sped up this way, increasing our tax base and private sector employment base to fund city services. Funding of Code Enforcement to keep our city safe/looking good and also could bring in revenue by assessing fines to irresponsible property owners—especially apartments that are ill kept.

Adding some funding to libraries is good, but much more can be done with volunteers to keep the doors open than is done today.

One way to make San Jose more visually attractive is through more tree planting, including maintenance, which also has other positive environmental attributes. Putting 5 percent aside to pay down high interest debt and save for a rainy day fund is prudent. Allocating something, even though small for Information Technology, must be done to achieve efficiencies and put a down payment on upgrading the financial software of the city to enable more sharing of financial information with the public.

The city manager, as chief operating officer, needs flexibility in allocating funds where the council or general public may not be aware of the need today. Of course, any action should require Council approval, but 10 percent between so many different needs may not provide enough. The city manager will have to make do.

Libraries, Police: Two Great Tastes That Taste Great Together

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A citizens signature drive is underway to secure a certain percentage of the budget for our libraries. This would replace the library parcel tax set to expire in 2014. If enough signatures are collected, the measure could be placed on the ballot in November.

Single-issue advocacy may come at the cost of something else. However, setting aside a specific percentage of the budget for a specific purpose is the only way to guarantee it is done. Elected officials often fund services not within their scope of responsibility. Last month, I proposed examining and collecting data for setting a certain percentage of the budget—higher than today’s percentage—for the police department. My proposal will come back for discussion during the budget process.

You can argue the merit perspective on both libraries and public safety. On one hand, public libraries are an equalizer, which allow youth the opportunity and access to information both paper and electronic. Libraries are considered a special place in the heart of many academics that populate our valley.

On the other hand, police are the only enforcement of the Social Contract that allows us to walk back and forth from the library without being assaulted. We can always hope for the best in prevention, but there are those in society who are deviant. Even if they’re provided a free public education, an open library or community center, they opt out. At this point, a book or DVD won’t do much to stop an act of violence while you’re going to and from the library.

Perhaps we could combine the ideas and set a percentage of the budget for police and libraries. It would bring together the two most popular city services and cover the bases with both camps of San Jose residents. I believe most would say that a city is doing good job when it has an excellent police force and library branches that are open. Otherwise, the risk is that tax revenue could be spent on items not in the City Charter.

We should strive to have the best city possible—a library system open seven days a week, augmented by unpaid volunteers, and a police force able to respond to calls for service. Being proactive could eventually enforce the quality-of-life concerns our residents have.

Libraries Provide More Bang for the Buck

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As city revenues have continued to decline, more money has been allocated to public safety both in real dollars and as a percentage of the general fund budget. Sixty percent of our general fund is allocated to public safety versus 40 percent 20 years ago. That 60 percent includes public safety pension costs and consumes our top four revenue sources combined: property tax, sales tax, utility tax and phone tax revenues.

In real dollars, San Jose spends $115 million more on public safety then we did 10 years ago, yet we have less personnel—while our population has grown from 950,000 to one million. One could contrast this at the federal level where our military budget (public safety) is dwarfed by entitlement programs like Social Security, Medicare, Medicaid and the interest on the national debt.  As this spending allocation has transpired in San Jose it is a struggle to pay for other services in our City Charter, such as libraries.

San Jose libraries have been delivering more with less for years. They have been doing so by restructuring how they deliver their services. If the libraries had not changed then residents would have fewer library services today. Our library system has used technology to become more efficient. Ninety five percent of library users use self-checkout. This has been a huge savings on the number of people needed to run a library, plus it has created a more efficient use of the library consumer’s time. I remember having to wait in massive lines at the library back in the day when checking out.

Several libraries have automated book sorting equipment where your item is scanned, sorted and transported down a conveyor belt so items get back on the shelf faster and with fewer people.  The libraries have implemented technology to augment their service to residents. The same way I believe photo radar or red light running cameras could augment pedestrian safety by issuing tickets 24/7.

Back in 1995 our library system loaned out 4,816,242 items with 288 full-time staff. In fiscal year 2009-2010 our library loaned out nearly 15 million items with 365 full-time staff. Triple the usage—plus new branch libraries—but we did not triple the employees. Was this the equivalent goal of outsourcing by using technology?

We see the value in libraries not only from testimonials at council meetings but also by the numbers. Last year 14,919,873 items were borrowed from the library and 7,642,747 visitors walked into our libraries (not unique visitors and not all San Jose residents). Six of our libraries loaned more than one million items during the year. Berryessa, Evergreen and Tully loaned out over 100,000 items a month. The most visited library in 2009-2010 fiscal year is Tully with 530,320 visitors and the least visited library was Almaden with 107,878 visitors.

The library is looking to stay ahead of obsolescence by offering technology like free WiFi at all branches, text-a-librarian service, eBooks with over 109,000 downloads, online magazine and newspaper subscriptions as well as subscriptions to 60 different research resources.  Ninety eight percent of new library card registrations and 62 percent of overdue fine payments are done online.

The Partners in Reading program, which provides literacy classes to adults, has been a catalyst for volunteers. More than 25,498 hours were contributed by volunteers which equates to $593,000 in cost avoidance. Fifty eight percent of this program is funded by the general fund with the remaining coming from grants.

The Library Parcel Tax was first approved in 1994 and renewed by over two-thirds of voters in 2004. That tax provided $7.2 million to the libraries this year which funded 47 percent of the materials budget and 41 full time library staff. The Library Parcel Tax is $27.80 for a single family home and displayed on your property tax bill. This parcel tax will expire in 2014 and would likely go back to the voters for their consideration in either June 2012 or November 2012.

Should San Jose voters going forward select any new taxes go to specific city departments? We have set up rules at the state level, for example, with Prop 98 and education funding.  Measure R in Palo Alto for example would have required a citywide election if a fire station was to be closed or a reduction in fire staffing but it was rejected, with 75 percent voting no.

The deficit going into next year is approximately $70 million. This means anything cut last year is not being restored and more cuts will have to be made.  Residents will lose services unless we deliver services differently asap. The Council will meet all day on Nov. 18 to discuss the deficit in public session.

Small Decisions Can Result in More Layoffs

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Last week, at the city council meeting, I removed an item from the consent calendar on the agenda for discussion. As you may remember from my blog about San Jose’s million-dollar golf nets, consent calendar items do not have individual discussion, but rather are voted on all at the same time. If one wants to discuss a consent item, you have to “remove” it for discussion.

The item I removed was asking $993,876 for the library to spend over the course of seven years on an online tutoring service for kids. Nearly a million dollars is a significant amount of money. The $993,876 was not restricted funds and could have been spent on librarians instead. My comment/question to the council was: If we know we are going to have to do layoffs of library staff on July 1, 2010 to balance the budget, then maybe we should hold off on discretionary spending so we can retain staff to keep our libraries open. This expenditure is approximately two librarians salary each year for seven years. My comment fell on deaf ears and the council voted to spend this money; I voted against this expenditure.

When it comes to the libraries, the core deliverable to me is that libraries are open as many hours a week as we can afford, so users can access information and have a place to study. Any and all other programming should be funded after libraries are open seven days a week. If we have funds left over after libraries are open seven days a week then we can start evaluating the option of adding different programs. Until then, the City’s money should be used to keep libraries open with staff.

The online tutoring service could be canceled from year to year; however, good luck ever canceling a program/service once it starts.

On another note, I posted a survey last week regarding the Redevelopment Agency (RDA) budget. The RDA board adopts the final budget on Dec. 8. A person shared with me that the question I posted below (which appears on the survey) was “biased.” I shared that the information I gave was factual, not biased. I thought I would share the question with you here. I have added commentary in bold parenthesis:

The Redevelopment Agency has spent $774 million on housing (true) making San Jose the number-one provider of affordable housing in the state of California (true) by financing 18,000 units (true) of affordable housing while neighboring cities do next to nothing for affordable housing. (Neighboring Cities have not met the Association Bay Area Governments (ABAG) affordable housing targets, while San Jose has exceeded overall ABAG affordable housing targets). With so much given to affordable housing and so many people in need of jobs (12.5 percent unemployment), should the RDA borrow money from affordable housing reserves this year, as allowed by state law (true), to be spent instead on economic development to help create jobs?

The Redevelopment budget survey can be found here. It closes this week.

Happy Thanksgiving San Jose.