The final-final vote for the budget is tomorrow, to enact appropriations. Much work goes on behind the scenes with our budget office. Each time a change is made it is an arduous effort to balance the books and calculate the impact on the budget.
If there is a compensation cut in a private sector, it is simply a reduction off the top of base pay — that is easy to calculate. However, when we have unique requests from labor unions that require municipal code changes or legal interpretations of the city charter, it gets complicated.
Quickly, there is a ripple effect that creates work for the budget office, finance department, City Attorney, retirement department and office of employee relations.
This is why I believe labor negotiations as public meetings would be best, because information can be shared early on and we’ll know the ramifications of different options.
Part of the pain of the budget office is that our city uses 20-year-old financial software. When you are dealing with a $3 billion budget with many different types of funds and unique requests, much of the process becomes manual. This is time consuming and increases the chances of error.
Installing new financial software is no easy task and is at least a $10-15 million line item (Interestingly, $14.3 million is the projected payout this year for accrued sick leave).
When we talk about core services, we may think of sewers and streets. Nonetheless, there is the need to make things work on the back end.
Considering San Jose’s structural deficit, it will be quite a challenge to figure out how to pay for this financial system. Open source software can be looked at as an alternative, but we are talking about managing a complex multibillion dollar budget. So, I am inclined to choose a solution that has a track record.
There are so many needs in San Jose that competing for limited funds and resources has become a trading game. Some will say that public safety, for example, is so important we should spend the reserves to avoid cuts. I acknowledge this argument. I’m open to draining the reserves and then — when the State of California takes more money from cities or the tax revenues dip — we simply start laying off people with a two week notice.
However, it is not a choice I would make. Why spend all the reserves while we still fund charities with $10 million in Healthy Neighborhoods Venture Funds (HNVF)? I mean, if public safety is really so important and people are saying that “people will die” because of the budget cuts this year, why continue to do things that are discretionary with general fund dollars?
The HNVF money is not legally restricted like RDA funds or capital funds. All it takes is six votes to redirect this money.
I am not sure why city employees do not support the HNVF money, to be used for themselves and their colleagues. I think that our employees are worth keeping and worth using the HNVF money to keep them employed.
This might be another disconnect between the city employees and the larger labor union movement that supports the HNVF status quo over their own membership’s employment. We cannot be everything to everyone during tough fiscal times.
Some say we are heading into another financial storm. The Federal Reserve and the federal government still have the foot on the gas. But, the economy is sputtering. We had terrible housing numbers last week, and a weakened consumer spending outlook, thus revising GDP growth down last quarter.
Sovereign debt in Europe and Japan continues to be a worry. Japan is going to limit bond spending which seems like the lifeblood of government. The Fed is saying that they may have no rate hikes utill 2012, in an effort to spur activity as financial conditions have become more volatile as the banking sector in Europe is having issues. Cries for austerity abound regarding our huge national debt, so it is unlikely we’ll get more federal stimulus dollars. The Fed stopped buying more mortgage-backed securities last quarter.
The USA may have Japan-disease, where we have a lost decade of slow growth plus high unemployment. After the early ‘80s recession, the economy in the USA grew at 7 percent and 9 percent five quarters in a row. Last quarter, the economy grew at 2.7 percent barely, which barely kept pace with new entrants into the job market. The government sector is leveraging to the hilt, but the private sector is deleveraging even with ultra-low rates.
Most of the tools have been used by the Fed to boost the economy, and there are not many bullets if there is a double dip recession.
To read more about the “Broken State of America,” check out the cover article of Time magazine this week:
http://www.time.com/time/nation/article/0,8599,1997284,00.html
So, considering all of these macroeconomic factors, would you spend down the reserves (which is a total of 2.5 weeks of payroll) the City of San Jose has on hand? Would you personally spend your own savings down to zero if you had other alternatives?
Come out and enjoy the Rose, White and Blue Parade on July 4th. Sponsored in part by the San Jose Redevelopment Agency and The Alameda Business Association.
http://www.rosewhiteblueparade.com/index.htm
Pierluigi,
I hope that you and others on the Council are paying close attention to the crime rate here in San Jose. Today’s paper has an article about an armed robbery home invasion, and over the weekend they reported a serious shooting that has a City employee in ICU.
“San Jose police Lt. Mike Sullivan said the home invasion was reported about 5 a.m. in the 300 block of Fuller Avenue on the outskirts of North Willow Glen.”
http://www.mercurynews.com/top-stories/ci_15393627
Isn’t this in YOUR district?
The paper has been full of these types of crimes in the past several months. Remember that when you vote to lay off Police. You will be opening up a serious Pandora’s box, endangering citizens, and sending a clear message to criminals that the City could care less about public safety.
yes, use the politics of fear instead looking at the actual total compensation to police officers (and firefighters too).
There was an article in the paper recently that compared the compensation level in SJ workforce and if I am not mistaken, in terms of total compensation per employee, the police and fire depts have the highest levels behind only the lawyers.
Yes, they have tough jobs but so do our soldiers and no soldier is retiring comfortably after their service. There are many qualified candidates who will be happy to take the job even if the pay was less.
If the current police and fire personnel really cared about public safety, they should accept the reduction in compensation (which is still very generous) and not force the city to choose the layoff option. We’ll just have to see whether their pocketbook is more important than public service.
“There was an article in the paper recently that compared the compensation level in SJ workforce and if I am not mistaken, in terms of total compensation per employee, the police and fire depts have the highest levels behind only the lawyers.”
If there was an article in the paper, please provide a link so we can read about this.
Kenny said, “.yes, use the politics of fear instead looking at the actual total compensation to police officers (and firefighters too).”
Kenny,
I can assure you fear politics is not the card being dealt here. I guess you’ll have to see it for yourself.
Also, Police gave 5% back on their last contract. Another 10% would be 15% not 10. Police have only used Binding Arbitration twice in 30 years, so lets keep the facts straight.
Several months ago I wrote that the standoff would pit veterans against new hires. That has come true. By refusing to accept their share of the pain, the veteran cops and firefighters threw the new recruits under the bus. Thanks to the unions, layoffs go by seniority, not by competence on the job.
JMO said, “Thanks to the unions, layoffs go by seniority, not by competence on the job.”
Sorry but that argument doesn’t fly. I don’t know any private, non-Union companies that don’t fire first hired. Hence the reason big corporations still have useless overpaid idiots on the job, and hard working employees on unemployment.
“By refusing to accept their share of the pain, the veteran cops and firefighters threw the new recruits under the bus.”
The police officers have done no such thing. They have made offers to the city, and continue to negotiate. Even the Mercury published an aritcle acknowledging this.
I wonder if an agreement is brokered, and jobs are saved, if you are going to write a blog commending SJPD for compromising and saving jobs.
Many companies fire based on competence, not seniority. I have worked for some, and been the owner in a couple.
Well that was a whole lot of hot air that said nothing. You can quote the hourly stock market report all you want but the fact remains that you sir voted to lay off public safety workers. If you ask me, you are not as smart as you think you may sound.
There is no EASY solution but there is a simple straightforward answer. Follow the lead of private enterprise. Reduce the number of City Employees to what the City can afford.
I do not like seeing people lose their jobs but it makes more sense to cut 600 jobs than to make 6,100 suffer through pay cuts.
Swallow hard and quit dancing around the problem!
Yes, I would if I was talking about my personal protection. For you it’s all surgical so do as you will. The Mayor has his personal bodyguard and you have/will always enjoy VIP police priledges so it will not effect you.
BTW, people are hurt, and you could argue will die as a result of police/fire cuts. Following an early morning homocide several days districts/beats were overwhelmed to the tune of just one district with 14 calls pending! That’s 14 families, homes, emergencies taking a number like at a deli. Of course, not you, if you were calling 911 you would go to the top of the list Mr Councilman. Stop when you hear a lie. You can not and will not. Politicians like you are disgusting! You wanna talk about paying for software, boo hoo, while laying off police/fire. You don’t deserve the finest and bravest of this city….
Just a lowly police officer,
First, I want to thank you for your service. The majority of us do appreciate you and the work you do in our community.
Having said that, I was reading the comments in this article about the home invasion robbery, and I am very concerned about people arming themselves. I have read some horror stories about guns in the home. I think if crime keeps rising and if we lose more Police, this is exactly what will happen. What are your thoughts on this?
http://www.mercurynews.com/top-stories/ci_15393627
“Following an early morning homocide” Geez, a cop that can’t spell homicide correctly. That’s comforting.
Thanks for your critical eye from the comfort of your couch. It’s called a mistake, I know how to spell. FYI: I worked a 15 1/2 hour shift before that post and still managed to get in a workout. All that so that I could be prepared to save weak and sorry citizens like you who only know how to sling insults at those that stand between you and your local Westside Mob gang member.
Pier,
Why do you and the entire city council get the entire month of July off every year? You get a great salary from the city, a huge car allowance, and great benefits. You guys don’t need an entire month off of work from the city.
Also, you have done a wonderful job at demonizing and demoralizing city workers, most of whom are very dedicated and hard working individuals.
The whole government takes a month off. Look no further then the County, the State and the Feds.
Why take July off? Same reasoning as requiring federal workers to take at least two weeks of annual leave or lose it per year (they can roll over some). Studies have shown that workers come back refreshed and more productive if they take at least some time off (sick and vacation time) rather than just banking it for retirement.
Also, some legislatures are only part time, like in Texas, and its been noted that you get less complex law coming out of the state capital if you don’t give them a full-time salary and year round staff. One could extend this to SJ and suggest that one month off might not be enough. Do we really want all the trapping of a big city? If so, a full time council and staff is part of the ante.
No offense, Blair, but giving politicians time off in California has not led to better legislation. You must be living in the world of academia to suggest that one month off for the city council “might not be enough”. If so, the San Jose City Council should just be a part time position.
The less time that our heavily medicated politicians have to dream up garbage legislation (“Happy Meal bans”) the less damage they can do.
http://www.youtube.com/watch?v=JWOoqmrOCH8
Look at it another way, Curious. That’s a full month that they can do no harm.
Maybe if they all went to Arizona and saw the problem on the ground, they’d think better of their stupid boycott/censure.
” This might be another disconnect between the city employees and the larger labor union movement that supports the HNVF status quo over their own membership’s employment”
City labor unions DID NOT CARE about deficits because city employees received yearly pay, benefits, pensions increases during budget deficits
City Hall paid increased budgets and city construction projects by increasing taxes / fees, cutting service levels, eliminated 800 + empty jobs, deferring facilities and street maintenance and increasing $3-5 billion city debt
Has anyone heard of the golden handshake? Its where you encourage people close to retirement to retire by offering them a couple extra years of service credit if they do it during a window of time you open up. It costs a little up front in additional pension contributions, but it is offset by the cost savings with younger workers who are at Step 1 or 2 in the ladder of salary progression and thus cost much less than senior staff.
I’m familiar with this in the context of CalPERS, but it may not make the same sense with the CoSJ’s self-funded pension system. Just putting it out there as something for future discussions.
Santa Clara County allegedly eliminated a few hundred jobs to balance it’s budget; but, according to the Murky News, only five people actually lost their jobs.
Only in government can you balance a budget by eliminating unfilled positions.
Well said Sir
I agree with you. I would rather cut funding to charities then cut public safety. However I know you serve with ultra liberal councilmembers who like to please everyone. Also stop building affordable housing. Adds to crime rate and they do not pay property taxes.
Eliminate the 16 staff member Office of Cultural Affairs.
“It’s tough to cut the benefits of police officers, firefighters and schoolteachers.
But the long recession has cast a glaring light on the fact that public and private workers increasingly live in separate economies.
Private-sector employees face frequent job turnover, relentless downsizing, stagnant wages and rising health-insurance premiums. They fund their own retirement through 401(k)s and similar plans, which rise and fall with the tides of the economy. Many public-sector workers, by contrast, enjoy relative job security, and the number of government jobs rose even as the overall unemployment rate shot just past 10%. “
“The great reckoning of 2010 took us years to create and will be years in the fixing. It’s not as if the economic crisis isn’t plenty painful already.
In government, as in life, there are cuts that injure and cuts that heal.
As they continue to slog through the wreckage of the Great Recession, state and local leaders have a challenge to be surgeons rather than hacks and make this era of crisis into a season of fresh starts. “
Part 3 http://www.time.com/time/nation/article/0,8599,1997284-3,00.html
Here are 5 tough political choices Council faces
1) Cut 10% city employee costs by unions volunteering pay give back
2) Layoff city employees
Council chose Smart Political Choice: – Ask City employees to take 10% pay cut and if they Refuse City Unions they appear ” greedy ” which is a Bad Political Choice with voters, while Council looks good
Most voters don’t have excessive city benefits and pensions plus many families took recent 10% pay cuts vs layoffs so have little sympathy for “greedy city employees ” choosing layoffs and reduced services over 10% pay cuts
Labor’s control of City Council is over.
Labor will pay for picking layoffs and services reductions at polls and in pay and benefits for many years
3) Use reserves which delays solving budget problem – making next year worst
4) cut other city budget items – Council finds not politically possible
5) Raise taxes – already too high and not possible to cover deficit
City Union’s Bad Political Choice,
I think you’re making a huge incorrect assumption here. You do of course realize that layoffs will occur whether the Unions take a pay cut or not right?
Don’t buy into all the hype you’re reading. Look at the huge waste and overspending done by our Mayor and Council through the past few decades. I think you might get a better idea of how we got here in the first place~
Kathleen says “…You do of course realize that layoffs will occur whether the Unions take a pay cut or not right?” Does she really not know that the layoffs will be greatly reduced if there are union concessions? This is already evident in the departments where employees have stepped-up to the plate—many whose jobs were to be cut have kept their jobs due to the concessions that have been made.
Just Sayin –
You don’t get the point yourself. What about the City Manager hiring a new Deputy City Manager at $130,000 a year? What about the spending on new projects that is still occuring, that is not being cut, that could save the city money? And by projects, I am not talking essential City Services. It is easy to place the blame on city employees and benefits. But in this economy, and with the City demonizing employee pay, you will only see what you want to see.
Just Sayin said, “Does she really not know that the layoffs will be greatly reduced if there are union concessions?”
I don’t believe that will be the case. You see many employees have decided to retire because of this ultimatum. So even if you get concessions, the City will still have to lay off workers to get the budget they want. Secondly, if pet projects keep being funded, not cutting from the top highest paid employees downward, funding useless departments, if overspending keeps happening, and loans keep being forgiven it will all be a wash.
For example, lets say you look at your budget and cut out vacations, going out to eat, but keep using your credit cards on none essentials, you’ll end up in the same boat. Welcome to the City of San Jose’s way of “balancing the budget.”
I think this situation comes down to the neutering of professional staff under Mayor Gonzales who cleaned house and brought in his own City Manager and RDA director. These positions are meant to moderate the political tides and provide not only institutional memory by a check and balance against the political leadership with professional restraint on fiscal matters.
I think the system is restored now, but 1 or 2 term council members aren’t always the best long term planners for fiscal prudence, especially when they’re known to be prone to running for higher office as soon as the opportunity presents itself.
There are actually other choices you didn’t mention, but I’m weary of the whole budget mess and political crap and glad it’ll be behind us for another 9-12 months after the meeting Tuesday.
Would like to see some big picture thinking and planning like we see with the General Plan for our financial future occur sometime other than budget deadline time.
I completely agree with your message regarding the problems that started during Mayor Gonzales’ autocratic regime. Mayor Reed inherited a number of problems that were created during his predecessors term.
During the Gonzales era, the City Manager and most of the senior staff were replaced by managers from out of the area, many of them from out of state. They had no loyalty to this community and moved on leaving the problems they helped to create behind them. One of the biggest problems was the overly generous benefits that were conferred on Police and Fire.
While I think San Jose’s public safety employees do a good job, I think their compensation is over the top. And it’s very disappointing that, while other City workers were willing to make sacrifices to save jobs and to maintain services to the public, Police and Fire were unwilling to share the pain.
When the police take 45 minutes to get to your house after you’ve called 911 maybe you’ll understand a librarian and city attorney are not equal to the job police officers do.
Hi Mom! What you need to consider is that the Fire Union was the 1st of the city workers to make concessions…In 2007 the Firefighters offered to not take any raises… They have offered numerous concessions that the city refused (Alex Gurza OER) to even consider. While the City Administration has told the public and the media that all they want is a 10% concession the reality in the City offer is in the realm of 23 to 25% cut in pay. Also the out going Fire Chief just took 8% in pay for over 100 Fire personnel that were the most experienced Paramedics in the Department! He also took away their ability to work as a Paramedic on scene! What you will now get is a greatly reduced level of service on medical calls. You live in Willow Glen…lots of kis and elderly, so if your parents, husband have any serious medical event now you will have only one person on scene that can give medications, start an IV, read an EKG and take appropriate action, intubate a person in respriatory distress, or perform Pediatric Advanced Life Support for your child until an already thinly staffed ambulance conpany arrives on scene. So just to let you know Fire and Police have stepped up to the plate. They have been for several years! City management is playing a game of chicken and we are caught in the middle!
The pension system in place guarantees an annual rate of return of 8%. If that minimum isn’t met, they General Fund makes up the didfference annually.
Given that pension funds must invest conservatively, an 8% annual rate of return is barely sustainable in great market years. In a recession, getting 2% is the best you can hope for.
I understand this guarantee is not in the union contracts, but in the city charter. What group of idiots put that provision in the charter? The current mayor and council need to do whatever it takes to amend that charter windfall for city employees.
Geez, an overpaid attorney who can’t spell “didfference” correctly. That figures.
JMOC – What’s that they say about people who live in glass houses not throwing stones…?
touche
Ahhh, the old “FUD” premise – create Fear, Uncertainty and Doubt.
Some good points. I’d like to see a cost-benefit look at bringing ambulance service in house (fire department is already the first responders for most 911 calls) After stabilizing a patient who needs medical attention, a private ambulance company shows up and transports the person (if needed) to the hospital and then bills the private insurance and the county and anyone else who looks to have deep pockets.)
I suspect we’d stand to gain about $7 million a year in potential revenue with such a move and actually improve public safety by being able to have paramedic trained first responders also do the transport.
Up in Budget Smoke
( Cheech & Chong – Up In Smoke –
http://www.youtube.com/watch?v=ZCZap4o777g )
( Pierluigi )
Up in smoke
That’s where budget money goes
in city pensions, subsidies
and sometimes up my nose
When troubled budget times
Begin to bother me
I take a big toke
and all my budget cares
Go up in smoke
( Chuck )
Up in smoke
Donde todos es mi rey
There are no signs
Que dice no fumer
So I roll un “bomber” budget
Y me doy, un buen toke-ay
Y despues I choke
Y todos mis cares
Go up in smoke
Come on Council let’s get high
( Council – All together )
Up in smoke
That’s where budget gonna be
‘Cause when I’m high
The budget deficit
Don’t bother me
When life begins
To be one long
and confusing budget joke
I take a big toke
and all our budget cares
Go up in smoke
I take a big toke
and all our budget cares
Go up in smoke
Pier,
If we can’t afford decent police protection, then try a pilot program where law abiding citizens are encouraged to take training and own firearms.
Ya, let Novice respond to all calls for service at the Olverio residents. Novice, i”m hurting because I’m laughing to hard.
C’mon Manny. You know what I meant – home defense/self protection/deterrence.
Look at it this way, if SJPD runs the gun training/safety/certification program, the proceeds can go directly back into SJPD.
Net-net is that you have a citizenry that is able to defend itself and a city with a reputation that deters crime.
Wouldn’t it be nice for once, just once, to be from a place that is known for something grounded in common sense instead of our usual litany of lunacy that is bans on happy meals, rainbow flag raising, and pot clubs, et al.
Novice,
Great idea, but why stop there?
The fire department can teach us how to put out fires, we could have do-it-yourself building inspections, and the pot dispensaries can write their own ordinance!
The hits just keep on coming:
Gun Haiku
Conceal’d Carry Law
gun in pocket, gun in purse
mugger contemplates
> If there is a compensation cut in a private sector, it is simply a reduction off the top of base pay — that is easy to calculate. However, when we have unique requests from labor unions that require municipal code changes or legal interpretations of the city charter, it gets complicated.
> Quickly, there is a ripple effect that creates work for the budget office, finance department, City Attorney, retirement department and office of employee relations.
Boy, does this ever show ignorance about the private sector.
When the government “gets complicated” and initiates “municipal code changes or legal interpretations of the city charter” or worse, it trickles down and affects the private sector BIGTIME!
After all, it IS the government, and businesses are affected by and must react to the the actions of the government.
“Part of the pain of the budget office is that our city uses 20-year-old financial software.” The Capital of Silicon Valley, indeed!
Budget issues—do what real people do—cut out the non-essentials…like the Office of Cultural Affairs.
Reduce “affordable” housing
Why are people making $63 K eligible for taxpayer paid housing???
SJ has more affordable housing than almost any other city
Does not get property taxes from this
Goes further in the hole.
see the comingdepression dot blogspot dot com
This country/county, city is broke!
Call me Joe Barton but I’m tired of the “public safety” shakedown. I’d rather take my chances with the bad guys and the fires than continue to overpay police and firemen.
I can’t stomach the hypocrisy of these public employees as represented by their union spokesmen, who skite about their heroic dedication to the people even as they continue to rob the people blind.
Public employee unions- what a ridiculous concept. Jeez.
Public Employee Unions – considered unnecessary as public sector was a “model employer” and so not really seen before President Kennedy repaid his campaign promise to the unions and opened the federal workforce for unionization. Trickle down affect was that before long all levels of public employees unionized, which helped the unions cover their losses in the industrial sector.
I think its about 23 states that do not allow public sector unions because of the old “model employer” concept. I wonder if they are having a budget crisis like us?
Louisana, Arkansas, Mississippi… woo ho. That’s the model to follow.
Second Amendment Haiku
buy meat at market
gun is for shooting tyrant
housebreaker eat lead
I like what “City Union’s Bad Political Choice” was saying… lets get common sense out here.
When pensions were created with dedicated returns, noone was thinking when so much $$ would go out. Plus gov’t employees made much less on average.
Now in the private sector, some people get generous stock options,etc. This was a reason in the late 90s to up the salary and pensions. But the reality is most in the private sector do not get generous 401(k) plans, much less guaranteed pensions. And MOST risk being laid off many, many times in their careers.
At this point I’d suggest that we find a way to go to court and find some sort of bankruptcy option to get out of the pension debacle. It is far too much and I’m sorry to say most gov’t employees do not ever face the layoffs that private employees get. So why if no risk do you get such HUGE rewards?!?
Another option is we do what Oracle does (tho not public knowledge) and what Cisco has been emulating. Fire the bottom 10% every year and hire where needed.
Everyone knows that our President is probably the smartest person ever to be president. After all, he’s a Harvard Law School graduate, not to mention being a Nobel Peace Prize winner.
So, there is no doubt that such a very smart president would pick a very smart Science Advisor.
Someone like, oh say, John P. Holdren
Being a scientific and environmental visionary (whose visions are eloquently recorded in his 1977 book “Ecoscience”, co-authored with Stanford’s Paul Erlich and Anne Erlich), Holdren identifies what is the ultimate, big-brained answer to San Jose’s selfish and messy budget morass: de-development.
The problem is simply that there are too many San Joseans and they consume to much.
We use too much water, too much air, too much silcon, too much lavish and expensive public services like unionized policemen and firemen.
The solution is, USE LESS! Stop development! Stop consuming!
So, if San Jose DE-DEVELOPED instead of, RE-DEVELOPED, destroyed jobs instead of creating jobs, told “undocumented workers” to go away instead of “seeking santuary”, well, San Jose would be a better place, and the REALLY, REALLY smart people in the Obama adminstration, and at Stanford’s environmental sciences department would think that we are “enlightened, progressive” people, and nearly as smart as they are.
Pierluigi you are a true independent voice and I admire you for it.