Mayor Chuck Reed had some grim news for City Council yesterday. “Although this is the ninth year we’ve faced a significant budget shortfall, this year is by far the worst.” He went on to warn that the city’s expenses are expected to exceed its revenues for many years to come. The only solution, he suggested, is to cut services to community centers and libraries, and to reduce pay and/or benefits to municipal employees.

Below are a few observations from last week.
 
Monday: Council study session on Airport
Overwhelming majority of Council thought outsourcing of janitorial to save $3 million was a bad idea so it looks like we will lay people off and consider getting rid of the night time curfew in the future.

Monday Night: General Plan 2040 Task Force Meeting
Although the General Plan board members were informed that the City’s budget problems are partially due to most of our land being dedicated to housing instead of jobs, the Task Force voted in favor of adding 300,000 people with a 14-11 vote. The two options were 200,000 or 300,000 new residents. Several task force members shared that they voted no because they wanted to see higher growth of 500,000 more residents to San Jose! I voted for the option that added 200,000 people by 2040.

In a recent Open Forum article published by the San Francisco Chronicle, the city auditors for Oakland and Berkeley advanced the argument that city officials and citizens need to work together to define what the core services are for their respective cities: “Local government cannot afford everything it’s doing, so where do cities cut spending? To bridge budget gaps, lawmakers can choose either to implement across-the-board cuts-or they can define core services and cut strategically. Defining core services means aligning what services citizens expect with what cities can afford.”

There’s bad news for the City Council again. The deficit is up 16 percent and now stands at $116.2 million. The problem, says City Manager Debra Figones, is employee pension costs, and especially the pension costs for retired policemen and firemen. While they were expected to grow by $38 million during the next fiscal year, the estimate has been adjusted and now stands at $53 million. Exacerbating the problem is reduced revenue from business tax receipts, which continues to drop.

Mayor Reed shared a candid and honest view of city revenues and expenses at the State of the City Breakfast last week. (Personally, I miss the State of the City speeches in the evening as it led to dinner after the speech and spending money Downtown.) As we already know the City is walking the plank, with the sharks swimming below in the ocean (sharks = bankruptcy) and a sword wielding pirate (pirate = hard choices) is forcing us to walk down the plank off the ship. Walking back up the plank in not an option unless tough decisions are made now. However it seems that another alternative being heard more and more at city hall is borrowing.

With a record budget deficit approaching $100 million and the limited sources of income dwindling in the recession, San Jose’s City Council is looking for creative ways to raise income. According to City Councilmember Nora Campos, “the only one of the items that even polled fair and that we may have an opportunity to receive some revenues” is the expansion of San Jose’s licensed card tables. According to Mayor Chuck Reed, the resulting tax revenues could be as much as $2-3 million per year.

Last week the Council tackled two agenda items related to parks. One was to apply for a state grant. There is $184 million up for grabs for the entire state of California to be spent on city parks. California has 36 million people and San Jose has one million. If San Jose were to get 1/36th of those state funds, that would be $5 million. The other item was the city postponing the opening of 11 parks city- wide because there is no money to fund operations and maintenance.

Mayor Chuck Reed has a big problem ahead of him. San Jose is faced with a $100 million shortfall, which means the city is going to have to eviscerate its budget. To achieve that end, he’s planning a budget study session for next week

The city of San Jose recently completed a scientific poll of 902 residents. This poll cost $50,000. As I mentioned in a prior blog, I took many of the poll questions and posted them on the District 6 website (the district I represent) and here, on San Jose Inside. I entered the questions and three of my own into a web-based survey solution which costs $20 a year. The survey closed yesterday with 839 completing the 15 page survey (973 respondents completed part of the survey). Unlike past surveys where District 6 residents were 90 percent of the respondents, only 43.9 percent of the respondents were from District 6 this time

Photo radar helps augment traffic safety, as well as that of pedestrians and neighborhoods. A tweaking of the current policy to improve safety will not cost the state any money, and in fact will raise money while at the same time lowering emergency room health care costs. Speeding cars in our neighborhoods continue to remain an issue. The City of San Jose does what it can to manage speeding on our streets with the dollars we are able to allocate.

Due to the structural budget deficit and the decline of tax revenues coming into the city, the January police academy has been postponed indefinitely. By postponing the academy the city saves money but risks neighborhood safety.

The City of San Jose has contracted with a public opinion survey company to poll residents on the city’s budget in a project fondly known as “the City of San Jose Budget Prioritization Survey.” The control group of the survey is 900 residents representing the entire City.  They will be contacted by home and cell phones.

The New York Times report following the release of Gov. Arnold Schwarzenegger’s budget plan yesterday summarized the harsh facts succinctly: “Mr. Schwarzenegger … has proposed eliminating the state’s $1 billion welfare program for families with children, ending a $126 million health insurance program for children, reducing the state’s Medicaid eligibility to the minimum to save over $500 million, and ending the state’s network of subsidized home health care providers for the poor.”

This is a big year for the City of San Jose and its future. The City faces a $100 million budget deficit. Mayor Reed and the rest of the council will have to pull the proverbial rabbit out of a hat. Unfortunately, things may get worse before they get any better. Truth is, there’s no rabbit…there may not even be a hat!

I turned 40 in December. I spent my birthday with family and long-time friends. Many of my friends I have known since age five, from kindergarten in San Jose Unified School District, which equates to knowing most of my friends for more than 30 years. The majority of my friends are not political in their occupations and nearly all of them have never been to a San Jose Council meeting. Instead, they are teachers, nurses, Realtors, attorneys, tech folks, blue-collar skilled tradesmen, stay-at-home parents and—as my Mom likes to point out— most are married with children.

Many of my native San Jose friends have a very positive outlook towards San Jose. Their views are somewhat different than what I hear in my council office, where, typically, I hear alot about what is wrong with our city or questions as to why things aren’t done differently.

No one questions whether Peter Friess did a great job turning San Jose’s Tech Museum of Innovation around. He might claim that much of that is thanks to the work of Birgit Binner, a graphic designer he hired as a consultant, whose job was “to establish The Tech Museum as an immediately recognizable brand.” The problem is that Birgit Binner, who receives a $400,000 salary for her two-year contract, is also Friess’s wife.