Part two of a multi-part series
By Ed Rast
Do you understand the actual condition of San Jose’s city facilities and service levels, where and why your tax dollars are being spent, and the City operating budget by department? It’s okay. Most people don’t. But that makes it difficult for them to participate in a community budget discussion.
Last week, I briefly discussed San Jose’s budget process and suggested that if you wanted to knowledgably participate in the coming community outreach that you should read the January 2008 report, City of San Jose: Development of Strategies to Address the City’s General Fund Structural Budget Deficit, in which many of this and next year’s deficit reduction strategies are discussed.
I also pointed you to previous blogs of mine on Protect San Jose in which I discuss public safety conditions, under-staffing, and the city budget.
If you’ve done your homework, you’re already better informed than most of your friends and neighbors. But access to this knowledge isn’t a privilege for the select few. It’s granted to all of us by law.
California’s Public Records Act, part of the state constitution, provides “access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state.”
As part of the budget process, the people of San Jose deserve access to more complete, understandable, and essential budget information that clearly shows:
• past actual budget spending, staffing and city service performance results;
• the current city facility, service, and performance measurement conditions, organized by responsible department;
• proposed city budget priorities, source of anticipated revenue, proposed revenue increases, and spending proposals organized by category, projects and public-private service partnerships and service grants;
• proposed actual staffing requirements and performance measurements to measure progress in meeting performance goals; and
• how each budget appropriation will or will not affect San Jose’s residents, businesses, and city government and how it will improve our community.
If everyone understood this basic budget language, City leaders and residents could engage in a proper, meaningful, and informed dialogue, which is essential to open, transparent, and accountable government
In recent years, the budget process has improved, and most residents believe that city staff who prepare the budget have good intentions, but it is not enough to be well-intentioned if most residents and even some councilmembers cannot clearly understand the City’s budget document.
San Jose’s budget looks good until you look closely look at the document itself. You find lots of confusing words and numbers that:
• summarize revenue, spending and staffing data but do not provide sufficient detail of actual vs. budgeted staffing and expenditures, common national performance measurement comparisons other cities use in their budgets;
• compare five year’s worth of budgeted staffing but do not compare that data to actual staffing by department;
• do not provide comparisons on a per-resident basis for 10 large local cities or the 12 largest California cities so city services provided for cities of differing populations can be compared to provide possible context or footnotes to explain unusual differences or variances;
• do not provide comparisons with local cites for a) development costs and b) cost of doing business, both of which affect business location, job retention, and city revenue
• lack detailed information by department and a summary listing a) tax spending for public-private partnerships that provide city services, b) non-city service spending to other governments, or c) grants or other tax subsidies, under-market rents and free services donated to non profits, developers, corporations and property owners with a stated public purpose; and
• are not organized as they are in budget documents of most other cities — where each department’s revenues and expenditures are broken down in a single section — but in four or more sections, with detailed information routinely available in other city budget documents is omitted.
If you don’t agree with the current city service and facilities conditions, city budget priorities, or cost and service comparisons, then you need to be prepared now, not next year, when many decisions will have been made — if they haven’t been made already.
As a community, we can direct the City Council and City Administration to publish more understandable budget information; improve and simplify the budget process; prioritize city spending into what should be fully funded, partially funded, and not funded; and develop or change city policies that could increase future budget deficits.
This week, your homework is to look closely at San Jose’s budget documents, particularly the 2009-2010 Operating Budget.
In coming weeks, I will continue to help by making additional budget recommendations, providing you with information to understand the budget, and notifying you of important budget meetings.
For example, at the City Council meeting on Tuesday, October 27th, there will be a staff presentation, discussion, and public comment on upcoming labor contract negotiations. I encourage all of our readers to attend and add their two cents to the discussion.
Showing posts with label City Administration. Show all posts
Showing posts with label City Administration. Show all posts
Tuesday, October 13, 2009
Tuesday, October 6, 2009
Ask Ed Returns
Regular visitors to Protect San Jose know Ed Rast as a statistical guru, especially when it comes to public safety. In his regular Tuesday column, he's examined San Jose's exorbitant business taxes and fees, mismanaged budgeting priorities of City Administration, and our tendency to build more and more housing without bringing new jobs to the area.
A couple months ago, Ed opened up a dialogue with you, the reader, and he received some intriguing questions. Now, we're happy to open the floor again. This is your chance to Ask Ed.
Leave your questions in the comment space below, and stay safe.
A couple months ago, Ed opened up a dialogue with you, the reader, and he received some intriguing questions. Now, we're happy to open the floor again. This is your chance to Ask Ed.
Leave your questions in the comment space below, and stay safe.
Tuesday, September 29, 2009
A New Model
By Ed Rast
Did you know that California’s current 12.2% unemployment rate is the highest it’s been since World War II and that Santa Clara County’s 12% rate of unemployment is the highest among nine counties in the San Francisco Bay Area?
In a column this past weekend in the San Francisco Chronicle, Michael Bernick, former Director of the California Employment Development Department (1999-2004) notes that, “Since 1970 state unemployment has soared near or over double digits several times, and each time the economy came back.”
In times of recession, the key assumption that both state and local governments have relied upon for decades is that there will be an economic recovery in less than a year (recessions in 1990-91 and 2001 both lasted less than 8 months) followed by significant growth in jobs and tax revenue.
Is the model of a brief economic downturn followed by recovery and significant growth a realistic assumption upon which to base our city budget and revenue forecasts? Let’s look at what leading economists at the Federal Reserve Bank of San Francisco and UCLA’s Anderson School are saying...
The current California economic downturn differs from recessions past in at least two major ways:
One is its severity. The 12.2 percent unemployment rate — affecting more than 2.3 million workers — is not the highest it’s been, but it does not cover the roughly 1.3 percent of workers who are discouraged or marginally-attached — more than 200,000 — or the roughly 5.8 percent — over 1 million — workers employed less than full time for economic reasons. Now we’re talking about roughly 19.3 percent of workers affected by the recession.
Second, this recession is across all sectors and occupations, unlike previous recessions that affected a few industries. Construction is biggest loser, down 140,000 jobs and 18.5 percent from last year and over 300,000 jobs since December 2006. Business and professional services, trade, transportation and utilities have also seen dramatic cutbacks. California lost 110.000 retail jobs in auto dealerships, electronics, apparel, real estate, and other areas. Many of these jobs are not coming back because Internet sales more than make up for the loss.
Outsourcing and new technologies are reducing the need for workers. The breakdown of the employer-employee relationship and enormous growth of independent contractors has accelerated changes in the California job market. For months, economists have said that unemployment will remain above 10% and not drop significantly until 2010 or even 2011.
It is difficult to predict employment numbers. When hiring begins again, the job structure will look different because of technology and globalization. Will there be enough jobs in the future of California, Silicon Valley and San Jose? Let’s see what the experts have to say:
Michael Bernick tell us that “A next wave of job creation, fueled by California’s entrepreneurial ethos, must be our hope as we try to survive the current turmoil.
English economist Arthur C. Pigon says, “The latest gloomy forecasts ignore an important lesson of history,” that the “deeper the slump, the zippier the recovery.”
Michael T. Darda, Chief Economist for MKM Partners posits: “The most important determinate of the strength of an economic recovery is the downturn that preceded it.”
The City of San Jose receives about 40% of its revenue from commercial and office activities, and about 20% from retail activities — which use less city services than they pay for in taxes and use less land than homes that use more services than their taxes provide. We have not grown our jobs and tax revenues in proportion to or ahead of our growing population, as most other cities in Santa Clara County have done since the start of the Silicon Valley tech boom, as my previous blogs have clearly shown.
“Doing the same thing the same way and expecting a different result” has long been considered the definition of insanity. As it concerns job creation and growing the City’s tax revenues, this philosophy has allowed San Jose’s quality of life to slip below the levels provided by neighboring cities.
It is very difficult to accurately predict the future, especially the timing of a recovery in an uncertain world, and there are many influences on San Jose’s economy which we cannot control or change. However, we can control many city policies and processes that take longer than necessary, amend the high tax rates and fees that cause businesses to perceive San Jose as “unfriendly,” and improve how we compare to our main competitors: neighboring cities.
San Jose has an opportunity to take advantage of the coming economic recovery and build a strong base of jobs and tax revenue, but only if we change how we deal with nurturing startups, growing companies, and retaining companies.
We need to find out exactly why these businesses choose not to make their homes in San Jose. We must be honest with our residents about the many reasons we have lost thousands of jobs and millions of dollars in tax revenue.
San Jose should be comparing its practices to what other local cities have been more successful at doing. We must make sure that public receives adequate value for the dollars they spend and hat they are involved in budget discussion and decisions rather than just City Administration and a few insiders who, after decades of effort, have not been able to produce the needed jobs and revenue results.
Did you know that California’s current 12.2% unemployment rate is the highest it’s been since World War II and that Santa Clara County’s 12% rate of unemployment is the highest among nine counties in the San Francisco Bay Area?
In a column this past weekend in the San Francisco Chronicle, Michael Bernick, former Director of the California Employment Development Department (1999-2004) notes that, “Since 1970 state unemployment has soared near or over double digits several times, and each time the economy came back.”
In times of recession, the key assumption that both state and local governments have relied upon for decades is that there will be an economic recovery in less than a year (recessions in 1990-91 and 2001 both lasted less than 8 months) followed by significant growth in jobs and tax revenue.
Is the model of a brief economic downturn followed by recovery and significant growth a realistic assumption upon which to base our city budget and revenue forecasts? Let’s look at what leading economists at the Federal Reserve Bank of San Francisco and UCLA’s Anderson School are saying...
The current California economic downturn differs from recessions past in at least two major ways:
One is its severity. The 12.2 percent unemployment rate — affecting more than 2.3 million workers — is not the highest it’s been, but it does not cover the roughly 1.3 percent of workers who are discouraged or marginally-attached — more than 200,000 — or the roughly 5.8 percent — over 1 million — workers employed less than full time for economic reasons. Now we’re talking about roughly 19.3 percent of workers affected by the recession.
Second, this recession is across all sectors and occupations, unlike previous recessions that affected a few industries. Construction is biggest loser, down 140,000 jobs and 18.5 percent from last year and over 300,000 jobs since December 2006. Business and professional services, trade, transportation and utilities have also seen dramatic cutbacks. California lost 110.000 retail jobs in auto dealerships, electronics, apparel, real estate, and other areas. Many of these jobs are not coming back because Internet sales more than make up for the loss.
Outsourcing and new technologies are reducing the need for workers. The breakdown of the employer-employee relationship and enormous growth of independent contractors has accelerated changes in the California job market. For months, economists have said that unemployment will remain above 10% and not drop significantly until 2010 or even 2011.
It is difficult to predict employment numbers. When hiring begins again, the job structure will look different because of technology and globalization. Will there be enough jobs in the future of California, Silicon Valley and San Jose? Let’s see what the experts have to say:
Michael Bernick tell us that “A next wave of job creation, fueled by California’s entrepreneurial ethos, must be our hope as we try to survive the current turmoil.
English economist Arthur C. Pigon says, “The latest gloomy forecasts ignore an important lesson of history,” that the “deeper the slump, the zippier the recovery.”
Michael T. Darda, Chief Economist for MKM Partners posits: “The most important determinate of the strength of an economic recovery is the downturn that preceded it.”
The City of San Jose receives about 40% of its revenue from commercial and office activities, and about 20% from retail activities — which use less city services than they pay for in taxes and use less land than homes that use more services than their taxes provide. We have not grown our jobs and tax revenues in proportion to or ahead of our growing population, as most other cities in Santa Clara County have done since the start of the Silicon Valley tech boom, as my previous blogs have clearly shown.
“Doing the same thing the same way and expecting a different result” has long been considered the definition of insanity. As it concerns job creation and growing the City’s tax revenues, this philosophy has allowed San Jose’s quality of life to slip below the levels provided by neighboring cities.
It is very difficult to accurately predict the future, especially the timing of a recovery in an uncertain world, and there are many influences on San Jose’s economy which we cannot control or change. However, we can control many city policies and processes that take longer than necessary, amend the high tax rates and fees that cause businesses to perceive San Jose as “unfriendly,” and improve how we compare to our main competitors: neighboring cities.
San Jose has an opportunity to take advantage of the coming economic recovery and build a strong base of jobs and tax revenue, but only if we change how we deal with nurturing startups, growing companies, and retaining companies.
We need to find out exactly why these businesses choose not to make their homes in San Jose. We must be honest with our residents about the many reasons we have lost thousands of jobs and millions of dollars in tax revenue.
San Jose should be comparing its practices to what other local cities have been more successful at doing. We must make sure that public receives adequate value for the dollars they spend and hat they are involved in budget discussion and decisions rather than just City Administration and a few insiders who, after decades of effort, have not been able to produce the needed jobs and revenue results.
Tuesday, September 15, 2009
Return On Investment
By Ed Rast
Do you know what your taxes are being spent on and what city services or public benefits San Jose residents and businesses receive from them?
As we have discussed in “Just the Taxes Ma’am”, San Jose receives General Fund revenue of $663 per resident which is better than the average among 15 cities in Santa Clara County (5th) and the 12 largest cities in California (5th as well). Yet we continue to under-staff and under-fund essential city services including police, fire, and emergency medical services.
Budget documents prepared by San Jose city staff omit important revenue, staffing, and expenditure details. We frequently hear about city government spending in newspaper, television, or radio news, mostly as a result of a controversy, non-profit emergency funding, or critical City Auditor reports and Civil Grand Jury reports.
Most residents and businesses have little idea what their taxes are being spent on. But it’s not for lack of curiosity.
The lack of readily available and detailed city service spending and tax subsidy reporting makes it difficult for residents — not to mention the City Council — to understand where our taxes are being spent. This is particularly true for: 1) spending for services from non-profit, community-based organizations, school districts, or another government organization, or 2) corporations, developers and property owners receiving grants, economic development incentives or tax subsidies.
Here is a list of organizations receiving over $200,000 from the City of San Jose to provide a service in Fiscal Years 2005-2006 and 2006-2007. This is an incomplete list. We do not know how much support they received above $200,000, and we don’t know what specific service or services some of them provided as a public benefit to San Jose.
Here are two lists of organizations receiving grants from the City of San Jose in Fiscal Year 2007-2008, the first sorted alphabetically and the second by city service area and core services.
Now, read the two City Council policies on grants:
Council Policy 9-12 – Emergency Financial Assistance to Non-Profit Organizations
Council Policy 9-13 - Grants to Outside Entities
There are two questions you should be asking about these non-city services paid for with your taxes, and they’re multiple choice:
1. Who is receiving these services?
a) The general public
b) Individuals in need
c) Individuals, groups or companies that should be paying for these services
d) Residents and local businesses who pay city taxes
2. How should we classify these services?
1) Essential city services,
2) Services that the City should provide
3) Services we would like to provide if we did not have a budget deficit
4) Services that the City should not be providing
Do we know the answers? If not, why doesn’t the city administration make this information easily available and obtainable?
How can the Council and public make good policy, budget priorities, and spending decisions if we do not know where are our taxes are being spent, what tax subsidies are being provided and to whom, what services we receive, who is being provided outside services and what is the public benefit for our taxes spent?
Do you know what your taxes are being spent on and what city services or public benefits San Jose residents and businesses receive from them?
As we have discussed in “Just the Taxes Ma’am”, San Jose receives General Fund revenue of $663 per resident which is better than the average among 15 cities in Santa Clara County (5th) and the 12 largest cities in California (5th as well). Yet we continue to under-staff and under-fund essential city services including police, fire, and emergency medical services.
Budget documents prepared by San Jose city staff omit important revenue, staffing, and expenditure details. We frequently hear about city government spending in newspaper, television, or radio news, mostly as a result of a controversy, non-profit emergency funding, or critical City Auditor reports and Civil Grand Jury reports.
Most residents and businesses have little idea what their taxes are being spent on. But it’s not for lack of curiosity.
The lack of readily available and detailed city service spending and tax subsidy reporting makes it difficult for residents — not to mention the City Council — to understand where our taxes are being spent. This is particularly true for: 1) spending for services from non-profit, community-based organizations, school districts, or another government organization, or 2) corporations, developers and property owners receiving grants, economic development incentives or tax subsidies.
Here is a list of organizations receiving over $200,000 from the City of San Jose to provide a service in Fiscal Years 2005-2006 and 2006-2007. This is an incomplete list. We do not know how much support they received above $200,000, and we don’t know what specific service or services some of them provided as a public benefit to San Jose.
Here are two lists of organizations receiving grants from the City of San Jose in Fiscal Year 2007-2008, the first sorted alphabetically and the second by city service area and core services.
Now, read the two City Council policies on grants:
Council Policy 9-12 – Emergency Financial Assistance to Non-Profit Organizations
Council Policy 9-13 - Grants to Outside Entities
There are two questions you should be asking about these non-city services paid for with your taxes, and they’re multiple choice:
1. Who is receiving these services?
a) The general public
b) Individuals in need
c) Individuals, groups or companies that should be paying for these services
d) Residents and local businesses who pay city taxes
2. How should we classify these services?
1) Essential city services,
2) Services that the City should provide
3) Services we would like to provide if we did not have a budget deficit
4) Services that the City should not be providing
Do we know the answers? If not, why doesn’t the city administration make this information easily available and obtainable?
How can the Council and public make good policy, budget priorities, and spending decisions if we do not know where are our taxes are being spent, what tax subsidies are being provided and to whom, what services we receive, who is being provided outside services and what is the public benefit for our taxes spent?
Tuesday, September 1, 2009
Cost of Doing Business
By Ed Rast
Did you know that San Jose, without sufficient jobs for its residents and lacking the tax revenue that would generate — has raised taxes and fees to the point that the cost of doing business in our city is prohibitive to recruiting new businesses.
As I noted last week, San Jose loses 50,069 working residents — or 5.6% of our residential population — during the day when they commute to jobs in other cites.
Businesses looking to startup, grow, or relocate review many factors when making a decision about where to locate their operations: availability of skilled workers and management, housing for those workers, access to transportation, city service levels, quality of life, customers, suppliers, the city’s public policies, time to approve permits. All of these factors contribute to the “cost of doing business” in a particular locale.
A 2008 survey by the Kosmont-Rose Institute ranks San Jose as a “High Cost of Doing Business” city based on city business, sales, property, electric and phone utility rates, and state corporate income taxes. Community data takes into account city population, FBI Crime in the United States rates, taxable retail store sales, and transportation and economic development Incentives to create a complete understanding of the business climate in a city.
The Kosmont-Rose Survey User Guide explains the methodology behind the rankings.
The Kosmont-Rose survey is widely used by corporations, real estate developers, community planners, and public officials. Business relocation specialists use it to compare cities, especially when trying to decide between desirable locations.
Economic development officials use it to target companies in high cost cities that might be relocation candidates as we have seen with relocation campaigns run by states like Texas, Arizona and Nevada. Many former San Jose companies have moved their jobs or expanded in other states
California’s corporate tax rates are among the ten highest in the nation per the Kosmont-Rose Index of Corporate Tax Rates by State.
This Santa Clara County Cost of Doing Business and Jobs Map shows the cost of doing business ranking and the number of jobs per 100 employed residents for cities in Santa Clara County. Here are the top seven cities in jobs per 100 employees and their cost of doing business:
Palo Alto : Average CODB; 254 jobs per 100 employed residents
Santa Clara: Low CODB; 218 jobs per 100
Milpitas – Very low CODB; 164 jobs per 100
Mountain View: Average CODB; 147 jobs
Cupertino – Average CODB; 147 jobs
Campbell – Low CODB; 109 jobs
San Jose – High CODB; 88 jobs
This South Bay Area Cost of Doing Business Map shows other cities color-coded by cost of doing business. Note that job growth in Northern California has come mostly in inland cities with lower costs of doing business.
A February 2009 survey by the Ticon Company entitled Tenant Improvement Permits and Fees shows that fees and plan check times for a 10,000 square-foot tenant improvement with a valuation of $300,000.00 range from $4352 to $9763 on average. San Jose’s fee for the same permit is $24,000.
A high cost of doing business, while not the only factor that determines where a business will locate, is many times a “deal breaker” in these decisions, especially when the debate is between desirable neighboring cities, a problem San Jose knows all too well in Silicon Valley.
California city government revenues can be significantly increased or decreased by business activity – through jobs and consumer sales taxes or increases in business tax and fee rates. The local cities with more jobs and retail stores per resident have higher revenues and a lower cost of doing business than San Jose.
However, instead of trimming back on non-essential services, San Jose’s city administration chose to increase tax and fee rates to balance the City budget.
See my blog from last week for comparisons of local city tax revenue and jobs.
Did you know that San Jose, without sufficient jobs for its residents and lacking the tax revenue that would generate — has raised taxes and fees to the point that the cost of doing business in our city is prohibitive to recruiting new businesses.
As I noted last week, San Jose loses 50,069 working residents — or 5.6% of our residential population — during the day when they commute to jobs in other cites.
Businesses looking to startup, grow, or relocate review many factors when making a decision about where to locate their operations: availability of skilled workers and management, housing for those workers, access to transportation, city service levels, quality of life, customers, suppliers, the city’s public policies, time to approve permits. All of these factors contribute to the “cost of doing business” in a particular locale.
A 2008 survey by the Kosmont-Rose Institute ranks San Jose as a “High Cost of Doing Business” city based on city business, sales, property, electric and phone utility rates, and state corporate income taxes. Community data takes into account city population, FBI Crime in the United States rates, taxable retail store sales, and transportation and economic development Incentives to create a complete understanding of the business climate in a city.
The Kosmont-Rose Survey User Guide explains the methodology behind the rankings.
The Kosmont-Rose survey is widely used by corporations, real estate developers, community planners, and public officials. Business relocation specialists use it to compare cities, especially when trying to decide between desirable locations.
Economic development officials use it to target companies in high cost cities that might be relocation candidates as we have seen with relocation campaigns run by states like Texas, Arizona and Nevada. Many former San Jose companies have moved their jobs or expanded in other states
California’s corporate tax rates are among the ten highest in the nation per the Kosmont-Rose Index of Corporate Tax Rates by State.
This Santa Clara County Cost of Doing Business and Jobs Map shows the cost of doing business ranking and the number of jobs per 100 employed residents for cities in Santa Clara County. Here are the top seven cities in jobs per 100 employees and their cost of doing business:
Palo Alto : Average CODB; 254 jobs per 100 employed residents
Santa Clara: Low CODB; 218 jobs per 100
Milpitas – Very low CODB; 164 jobs per 100
Mountain View: Average CODB; 147 jobs
Cupertino – Average CODB; 147 jobs
Campbell – Low CODB; 109 jobs
San Jose – High CODB; 88 jobs
This South Bay Area Cost of Doing Business Map shows other cities color-coded by cost of doing business. Note that job growth in Northern California has come mostly in inland cities with lower costs of doing business.
A February 2009 survey by the Ticon Company entitled Tenant Improvement Permits and Fees shows that fees and plan check times for a 10,000 square-foot tenant improvement with a valuation of $300,000.00 range from $4352 to $9763 on average. San Jose’s fee for the same permit is $24,000.
A high cost of doing business, while not the only factor that determines where a business will locate, is many times a “deal breaker” in these decisions, especially when the debate is between desirable neighboring cities, a problem San Jose knows all too well in Silicon Valley.
California city government revenues can be significantly increased or decreased by business activity – through jobs and consumer sales taxes or increases in business tax and fee rates. The local cities with more jobs and retail stores per resident have higher revenues and a lower cost of doing business than San Jose.
However, instead of trimming back on non-essential services, San Jose’s city administration chose to increase tax and fee rates to balance the City budget.
See my blog from last week for comparisons of local city tax revenue and jobs.
Monday, August 31, 2009
Sleeping Giant
By Pete Pomerleau
Admiral Yamamoto could have been speaking for the San Jose City Council when he said: "We have awoken a sleeping giant." Yamamoto’s sleeping giant was the United States, awoken by the bombing of Pearl Harbor. The giant in today's terms is the body of active and retired employees of the City of San Jose, and the battle is over our pension plans.
For those not up to speed, the City is in full-on attack mode. City administration hired an outside agency from Canada called Cortex to look at making our pension plan "better." We were assured during meetings with these consultants that we as stakeholders would have a say in any re-organization. I can tell you for a fact that we will, because this is a clear meet-and-confer issue under our contracts, as noted by Bobby Lopez and Randy Sekany in their blog last week on Protect San Jose.
I spent two nights last week listening to and addressing some of the changes proposed by Cortex that the City is planning to ram down our throats. Beyond the damage these changes would do to officer morale as well as our recruitment and retention efforts, the proposed plan is just plain flawed.
The best people to manage a pension fund are the employees who pay into it. City staff has been trying to figure out ways to cut into our well-managed plans for years to subsidize the many financial quagmires they’ve gotten themselves into. We have to scale back on our new Southern Substation because of poor business decisions and practices made by supposed experts. We couldn't even get our new City Hall completed without numerous problems, and we hired the best architects in the country. Now the city wants us to hire more experts to manage our pensions. Well, I’ve got news for you: You could hire Warren Buffet to manage our funds, but he wouldn’t be able to guarantee higher returns.
I want to share some other ideas that were presented to us by Cortex and some of our responses. For reference, you should click here to open their report, which City Manager Figone brought before the City Council on June 23rd.
On page 27 of the report (p. 33 of the pdf), Cortex cites “good” examples of companies that changed their retirement boards in similar ways. Funny, but the numbers I have tell quite a different story:
• Canada Pension Plan: lost 18.6%
• National Railroad Retirement Investment Trust: lost 19%
• Yale Corporation Investment Fund: lost 25% this year
On the other hand, during 2008, the San Jose Police and Fire pension plan lost 5.1% and the Federated plan lost 3.1%. The question begs to be asked: What are we getting by putting our future in the hands of the “experts”?
As members, we contribute a chunk of our salaries every payday to the future of our plan. We also contribute our tax money into the plan along with every other resident. This is a well-developed plan that has generated tens of millions of dollars in returns to the City. We never asked for a bigger cut while the City reaped the rewards in the bullish years. But they have seen it fit to attack and demonize us in the court of public opinion in the lean years.
Maybe in the future the City should think about putting some revenue away for a rainy day, rather than spending it on non-essential services. Wouldn’t that be a sound business idea?
Before I sign off, you should know that Councilmembers Ash Kalra and Rose Herrera sat through both community outreach meetings last week. They listened as City employees described their frustrations. Rose even walked through the crowds and spoke one-on-one with us. This is a fine example of the dialogue we so desperately need to have with our Councilmembers. I’d like to thank Ash and Rose for leading the way.
Admiral Yamamoto could have been speaking for the San Jose City Council when he said: "We have awoken a sleeping giant." Yamamoto’s sleeping giant was the United States, awoken by the bombing of Pearl Harbor. The giant in today's terms is the body of active and retired employees of the City of San Jose, and the battle is over our pension plans.
For those not up to speed, the City is in full-on attack mode. City administration hired an outside agency from Canada called Cortex to look at making our pension plan "better." We were assured during meetings with these consultants that we as stakeholders would have a say in any re-organization. I can tell you for a fact that we will, because this is a clear meet-and-confer issue under our contracts, as noted by Bobby Lopez and Randy Sekany in their blog last week on Protect San Jose.
I spent two nights last week listening to and addressing some of the changes proposed by Cortex that the City is planning to ram down our throats. Beyond the damage these changes would do to officer morale as well as our recruitment and retention efforts, the proposed plan is just plain flawed.
The best people to manage a pension fund are the employees who pay into it. City staff has been trying to figure out ways to cut into our well-managed plans for years to subsidize the many financial quagmires they’ve gotten themselves into. We have to scale back on our new Southern Substation because of poor business decisions and practices made by supposed experts. We couldn't even get our new City Hall completed without numerous problems, and we hired the best architects in the country. Now the city wants us to hire more experts to manage our pensions. Well, I’ve got news for you: You could hire Warren Buffet to manage our funds, but he wouldn’t be able to guarantee higher returns.
I want to share some other ideas that were presented to us by Cortex and some of our responses. For reference, you should click here to open their report, which City Manager Figone brought before the City Council on June 23rd.
On page 27 of the report (p. 33 of the pdf), Cortex cites “good” examples of companies that changed their retirement boards in similar ways. Funny, but the numbers I have tell quite a different story:
• Canada Pension Plan: lost 18.6%
• National Railroad Retirement Investment Trust: lost 19%
• Yale Corporation Investment Fund: lost 25% this year
On the other hand, during 2008, the San Jose Police and Fire pension plan lost 5.1% and the Federated plan lost 3.1%. The question begs to be asked: What are we getting by putting our future in the hands of the “experts”?
As members, we contribute a chunk of our salaries every payday to the future of our plan. We also contribute our tax money into the plan along with every other resident. This is a well-developed plan that has generated tens of millions of dollars in returns to the City. We never asked for a bigger cut while the City reaped the rewards in the bullish years. But they have seen it fit to attack and demonize us in the court of public opinion in the lean years.
Maybe in the future the City should think about putting some revenue away for a rainy day, rather than spending it on non-essential services. Wouldn’t that be a sound business idea?
Before I sign off, you should know that Councilmembers Ash Kalra and Rose Herrera sat through both community outreach meetings last week. They listened as City employees described their frustrations. Rose even walked through the crowds and spoke one-on-one with us. This is a fine example of the dialogue we so desperately need to have with our Councilmembers. I’d like to thank Ash and Rose for leading the way.
Tuesday, August 18, 2009
Priorities and Objectives
By Ed Rast
Did you know that 4376 criminal cases in San Jose were not investigated in FY 2007-2008 due to a lack of police officers and resources, up 70% from 2,574 uninvestigated cases the previous fiscal year?
It is estimated that 5,800 cases — or almost 10% of all cases received — were not investigated in FY 2008-2009. This would mean an increase of over 125% in uninvestigated crimes in just two years.
Estimates predict that 4,500 criminal cases will not be investigated in FY 2009-2010... even if the eight new police officers approved in 2008-2009 budget for Investigative Services are hired to improve case investigations and clearances in burglary and auto thief.
The 2009-2010 proposed operating budget (p. VII 282) states that these eight investigative officers could instead be assigned to “service demand increases related to annexation of County pockets within San Jose, normal population growth and the impact of proposed reductions to other police services.”
The State of California plans to take $75 million from San Jose’s Redevelopment Agency and borrow $20 million of San Jose's property and sales tax revenues to balance the state’s $24.1 billion budget deficit, which means that previously eliminated public safety staff and budget cuts are back on the table.
So how can San Jose city administration year after year propose cuts to police staffing and funding if public safety is the No.1 budget priority of residents, neighborhood leaders, and most of the City Council?
Because our city administration:
1. Does not have a clear definition of “essential city services” — which always includes police, fire and emergency medical services — to be used to prioritize budget cuts;
2. Does not link city budget items to clear performance service objectives* (see below);
3. Does very few city service and cost comparisons to other large California cities or local cites using national performance measures; and
4. Does not link staff compensation to the achievement of department-specific service objectives in the budget, which are linked to long-term city goals.
We will continue to see police staff and budget cuts until our city administration defines their budget priorities and expenditures are linked to clear performance objectives and measurable standards.
* A performance service objective is defined in a budget document from nearby Sunnyvale as “generally a two-part sentence, describing both the service to be provided and the measurable standard with which it’s results will be compared.” For example, here’s the police service objective from Sunnyvale’s budget: “a) Provide quality investigations to aid the District Attorney in the prosecution of criminal cases in order that criminal charges are files on 90% of the cases submitted for review; b) promote the safety of the community and an atmosphere of security, primarily through the deterrence and prevention of crime and the apprehension of offenders in order that the city remains within the lowest 25% of Part 1 crimes for cities of comparable size at a cost of $103.82 per capita.” Now that's specific!
Did you know that 4376 criminal cases in San Jose were not investigated in FY 2007-2008 due to a lack of police officers and resources, up 70% from 2,574 uninvestigated cases the previous fiscal year?
It is estimated that 5,800 cases — or almost 10% of all cases received — were not investigated in FY 2008-2009. This would mean an increase of over 125% in uninvestigated crimes in just two years.
Estimates predict that 4,500 criminal cases will not be investigated in FY 2009-2010... even if the eight new police officers approved in 2008-2009 budget for Investigative Services are hired to improve case investigations and clearances in burglary and auto thief.
The 2009-2010 proposed operating budget (p. VII 282) states that these eight investigative officers could instead be assigned to “service demand increases related to annexation of County pockets within San Jose, normal population growth and the impact of proposed reductions to other police services.”
The State of California plans to take $75 million from San Jose’s Redevelopment Agency and borrow $20 million of San Jose's property and sales tax revenues to balance the state’s $24.1 billion budget deficit, which means that previously eliminated public safety staff and budget cuts are back on the table.
So how can San Jose city administration year after year propose cuts to police staffing and funding if public safety is the No.1 budget priority of residents, neighborhood leaders, and most of the City Council?
Because our city administration:
1. Does not have a clear definition of “essential city services” — which always includes police, fire and emergency medical services — to be used to prioritize budget cuts;
2. Does not link city budget items to clear performance service objectives* (see below);
3. Does very few city service and cost comparisons to other large California cities or local cites using national performance measures; and
4. Does not link staff compensation to the achievement of department-specific service objectives in the budget, which are linked to long-term city goals.
We will continue to see police staff and budget cuts until our city administration defines their budget priorities and expenditures are linked to clear performance objectives and measurable standards.
* A performance service objective is defined in a budget document from nearby Sunnyvale as “generally a two-part sentence, describing both the service to be provided and the measurable standard with which it’s results will be compared.” For example, here’s the police service objective from Sunnyvale’s budget: “a) Provide quality investigations to aid the District Attorney in the prosecution of criminal cases in order that criminal charges are files on 90% of the cases submitted for review; b) promote the safety of the community and an atmosphere of security, primarily through the deterrence and prevention of crime and the apprehension of offenders in order that the city remains within the lowest 25% of Part 1 crimes for cities of comparable size at a cost of $103.82 per capita.” Now that's specific!
Monday, August 17, 2009
Paperwork
By Bobby Lopez
I don’t know about you, but I was having a good weekend up until yesterday morning. That’s when I saw this article in the Mercury News.
A long-awaited police substation is about to cost $5 million more than the City originally thought. It’s the second time this year City administration has had to adjust their numbers because of “flawed design documents”. To add insult to injury, they want the council to pay for the cost overrun with funds that are meant for a police driver safety training center.
In the past, I’ve pointed out numerous examples of wasteful spending coming out of City Hall. This is just another example, and it comes at the expense of cops.
This substation has been a long time coming. Our officers and support staff are stretched too thin to keep our streets and neighborhoods safe. A second home in South San Jose would relieve some of the pressure. Councilmember Kalra has it right the Merc story when he says, “it’s something we need to do.”
But think of the cops we could put on the beat with $5 million. Think of the new technology SJPD could use to improve reporting and records keeping. Think of the community policing programs we could fund. I think about it, and it makes me cringe, because instead of spending that $5 million on public safety, we’re making up for messy paperwork.
Recently, we’ve been hearing about how police pensions and benefits are bleeding our City coffers dry. Maybe things wouldn’t be so bad in the first place if the City spent our tax dollars wisely.
Bobby Lopez is President of the San Jose Police Officers' Association
I don’t know about you, but I was having a good weekend up until yesterday morning. That’s when I saw this article in the Mercury News.
A long-awaited police substation is about to cost $5 million more than the City originally thought. It’s the second time this year City administration has had to adjust their numbers because of “flawed design documents”. To add insult to injury, they want the council to pay for the cost overrun with funds that are meant for a police driver safety training center.
In the past, I’ve pointed out numerous examples of wasteful spending coming out of City Hall. This is just another example, and it comes at the expense of cops.
This substation has been a long time coming. Our officers and support staff are stretched too thin to keep our streets and neighborhoods safe. A second home in South San Jose would relieve some of the pressure. Councilmember Kalra has it right the Merc story when he says, “it’s something we need to do.”
But think of the cops we could put on the beat with $5 million. Think of the new technology SJPD could use to improve reporting and records keeping. Think of the community policing programs we could fund. I think about it, and it makes me cringe, because instead of spending that $5 million on public safety, we’re making up for messy paperwork.
Recently, we’ve been hearing about how police pensions and benefits are bleeding our City coffers dry. Maybe things wouldn’t be so bad in the first place if the City spent our tax dollars wisely.
Bobby Lopez is President of the San Jose Police Officers' Association
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