Mayor and Council Fight for Their Own Salaries

Jerry Brown’s plan to dismantle the state’s redevelopment agencies would make things a lot worse for San Jose’s staggering deficit—and eliminate the funding source for the salaries of Mayor Chuck Reed and the San Jose city council.

San Jose’s Redevelopment Agency (SJRA) spends $12 million per year to help pay for city staff—that’s over and above its own staffing budget. Almost 20 percent of that amount, $2.2 million, pays for the city of San Jose’s executive branch and its staff.

How did that happen, when RDA funds are, by law, reserved for capital projects to revitalize blighted parts of the city?

Executive Director Harry Mavrogenes says the expense is justified by the fact that the mayor and council sit as the city’s RDA board. If the governor succeeds in defunding the agency, the city would have to look elsewhere for that money—or tighten its belt considerably.

That may be exactly what the famously frugal governor has in mind.

While the governor’s plan contends that money for RDA projects should be going to cops and teachers instead, here as elsewhere, the Redevelopment Agency created its own revenue. It did so by forming special tax districts through a scheme known as tax-increment financing (TIF).

Critics throughout the state argue that San Jose and other California cities diverted this money and used it to build bureaucratic empires—including generous salaries for elected officials.

Another noticeable hole that would come as a result of Brown’s proposal would be seen on the 14th floor of City Hall, which is currently occupied by the SJRA. In addition to losing the $12 million per year that the redevelopment agency puts into the general fund, the city would lose out on $1.3 million in rent.

Read complete article ‘Mayor and Council Fight for Their Own Salaries’ at San Jose.com.

Josh Koehn is a former managing editor for San Jose Inside and Metro Silicon Valley.

40 Comments

  1. How much, if any does this money go to city council?  Isn’t there a lump sum that goes to the mayor’s office?  Doesn’t Harry make over $300,000 a year?

  2. Time and Time again we have heard RDA Board Chairman Reed,the RDA Board of Directors membership (thats allour city council members), RDA CEO Margovenes, the City Manager Figone and assorted other high ranking City employees including City Attorney Doyle tell us that it is illegal to use RDA money to fund the City of San Jose’s General Fund.

    Example: someone suggests:  City of SJ could take some of the money the RDA has in the bank and transsfer it to the City General Fund to help ease the $110Mill budget deficit, right??? —or—RDA money could be used to help pay City Employees Salaries and Benifits including retirement contributions on a one-time or continuing basis to help ease the deficit….

    AND REED, the City/RDA… says: NO, THAT WOULD BE ILLEGAL, RDA money – by law – has to stay in the RDA and can only be used to fund RDA projects….

    Now this article is saying that at least $12million in RDA money goes to the City’s General Fund to pay rent at City Hall and pay City of San Jose employees salaries and benifits INCLUDING RETIREMENT CONTIBUTIONS????

    WTF????

  3. So cut Mayor and Council salearies by 20%  like thet are city employees with 10% pay cust and 10% increase in pension contributions

    Fair is Fair for everyone

    Why did Council get 20% pay from RDA when we were told that RDA funds could not be used for city services in RDA area like police, fire, libraries, community center staffing ?

    Doing away with RDA will take both – pay from Council and millions in political slush fund tax money that is wasted and payoffs – developers, sports teams, bailouts for community groups and downtown  

    – Sound good to me   Eliminate RDA

  4. The irony is BLINDING and somewhat amusing. Reed, Oliverio, Constant, et al are disgusting in their hypocrisy. Should this surprise us one bit? Sadly,….not even a little bit.

  5. Gosh, I hear a thousand very tiny violins playing in the background.

    Downtown San Jose is anything but viable.  It’s been on life support for 40 years and it’s been the target of $3 billion in ill-spent taxpayer funds.

    As for the 14th floor vacancies, try relocating some of the many hundreds of City employees who wouldn’t fit in the new City Hall, meant to house all workers.  That should free up the monthly rent and associated expenses paid for those currently in remote locations.

    Beyond that, the Mayor and Council can afford salary “haircuts.”  Those jobs should rightly be part time and pay a whole lot less than they do.

  6. Ladies and Gentlemen, please rise for the seventh inning stretch and join Mayor Reed and the San Jose City council, in a rousing rendition of “Take Me Out to the Ball Game”.

    “Take me out to the ball game,
    Paid for with city owned lots.
    Buy me medicinal marijuana and cracker jack,
    With RDA funds we will never get back,
    Let me toke, toke toke for the home team,
    If they don’t win I won’t care.
    For it’s one, two, three strikes, you’re out,
    At the RDA fund game.”

  7. Anyone who has experienced the last 30 years in the valley knows that if RDA has spent $3 billion it has increased the value of valley real estate overall by more than that. While it’s easy to throw rocks at RDA—and I have considered them to be wildly incompetent at times—many positive developments cannot be denied. The notion of using RDA to pay city staff that we would have anyway—they need to come clean and solve that problem

  8. ““Beyond that, the Mayor and Council can afford salary “haircuts.”  Those jobs should rightly be part time and pay a whole lot less than they do.”“

    I couldn’t agree more, especially when senior council ASSISTANTS have a top salary of $93K. They aren’t even out in the trenches dealing with danger and putting their lives on the line, everyday, yet their salaries are just as much as Police Officers. Gurza and Figone’s salaries need to be cut in half. I think the Mayor’s salary is okay.

    I have to reiterate. What goes around, comes around and as someone else stated somewhere on this blog…karma is a b-tch. Now, they get theirs. I hope they take a little time to think about their callousness and the smoke and mirrors they put out there which wreaked havoc, pitting the public against City employees, which is tearing this city apart. They deserve everything they get. I hope they get audited and I hope we see some “City of Bell” in this. Just what they deserve.

  9. RDA takes 12% property tax that city general fund would of received if RDA did not exist or about $21 million this year much of which went to pay code enforcement and city employees providing services to RDA areas

    Mayor, Council, City Attorney and City Managers office also got RDA money

    RDA for many years also paid salary, benefits and pension( $150-190,000 + ) of Downtown Association Executive Director a private organization who lobbied Council for grants, city contracts and tax subsidies without disclosing to public or media that he was a RDA employee

    The RDA should come clean and disclose where all RDA property tax went both projects, contracts and individuals ,
    1) who received taxes,
    2) what amounts and when since many got multiple amounts ,
    3)what it was used for
    4) what was public benefits did city receive if any – new taxes, jobs, clean up public hazard etc
    5) did Mayor or Council received political contributions from groups or individuals receiving RDA tax money as many lobbyists or individuals have said was required

    Where is openness, transparency and disclosure of where our taxes were spent and who got taxes by Mayor and Council acting as RDA Board ?

    Interested in what state RDA audit finds

    • Elmer Fudd says, “Vewwwy intewesting….”  I guess now is the time when three or four decades of dirty little secrets come out.  Pressure from Gov. Brown has been a catalyst for public outrage regarding the Council/RDA tactics.

    • As he rubs hands together…. This is going to get REALLY interesting. I need popcorn. I can see them now. Scramble, scramble scramble.

    • The way the corrupt City Manager and cronies of Bell, California were able to engineer their huge and ridiculous salaries and benefits were by costing them out in increments to each department and program so it never looked obvious how much the take home pay actually was.

      Sounds like this may not have been such an “outlier” in terms of city mismanagement as similar accounting tricks are being used in other communities to play shell games with money being funneled around to some key players who make big money.

    • THEY LIED! Just like they (Reed/Figone/Oliverio/Constant) LIED when they told the public that ending the seldom used binding arbitration option and creating a second tier pension system had to pass because it was the only way that they would be able to save public safety jobs. 

      Now they are threatening to demote a police captain, 16 lieutenants and 39 sergeants plus lay off 153 officers in addition to the 62 whose jobs were saved when the Police Union gave back nearly 5% in pay/benefits in 2010 on top of the nearly 6% they gave back in 2008-2009 – that is unless the department agrees to reduce its operating budget by $28.3MILLION which includes another 10% pay give back.

      Stand-by folks because after those lies they (the City Council) are getting ready to have a special meeting next week to authorize a TAX INCREASE to fund “Public Safety!!!”  Next Week, “public safety” in San Jose Council-Speak will rightly be defined as “police and fire.”  We should recall that Reed/Figone/Constant/Oliverio from about August2010 until now has told you that their definition of public safety is “like keeping libraries open; keeping the community centers open; keeping the neighborhood pools open; hiring ‘reformed gang members’ to patrol gang neighborhoods and provide intervention…” Remember??? Isn’t that gobble-de-guk another reason why they had to get V and W passed??? and the card room tax passed? and the 911 taxes extended??? 

      AND NOW they might loose a source of funding for their own jobs from the RDA??? Funds they have been telling us CANNOT be diverted to the GENERAL FUND??? So they want to get yet another tax measure on the ballot to shore up the GENERAL FUND???

  10. The agency pays for the City’s Housing Department Staff at about $10 million per year. Redevelopment Agencies also do not need any kind of public vote to sell bonds.
    How much of the $2.5 Billion of Agency bonds would the public have approved?

    The RDA is very proud of the Fairmont Hotel. How proud would the RDA be if the public was aware that they gave the Crown Prince of Saudi Arabia a donation of $25 million toward construction of the Fairmont Hotel Annex? 

    The City tried to siphon $50 million of Agency money toward building the new City Hall until it was sued by Al Ruffo, a former City Mayor.

    If the public ever learned the truth, the Agency would be ridden out of town on a rail.

  11. State law defines An “improper governmental activity” is defined as any action that violates the law, is economically wasteful, or involves gross misconduct, incompetency, or inefficiency.

    Guidelines for Compliance Audits of California Redevelopment Agencies – Nov 1998

    http://www.sco.ca.gov/Files-AUD/redevelopment_rda-web.pdf

    “A redevelopment agency, as a local government agency, is subject to the Political Reform Act of 1974 (the Act), and must adopt and promulgate a conflict of interest code that conforms to the requirements established by the Fair Political Practices Commission.

    These agency codes must enumerate the positions that involve the making of decisions that may potentially have a material effect on a financial interest. Additionally, the codes must specify types of financial interests, contain prohibitions, and require filing of annual public disclosure statements.”

    You can contact

    Field Audits-Sacramento
    P.O. Box 942850
    Sacramento, California 94250-5874
    Phone: (916) 324-8907
    Fax: (916) 322-4846

    Email Form – http://www.sco.ca.gov/scocontactus/contactgen.aspx

    • > State law defines An “improper governmental activity” is defined as any action that violates the law, is economically wasteful, or involves gross misconduct, incompetency, or inefficiency.

      Hmmmmm.

      “Violates the law”?

      You mean, like, passing the state budget sixty days late, or running for attorney general without meeting the statutory requirement?

      “Is economically wastful”?

      High Speed Rail, California Global Warming Solutions Act, California Air Resources Board, Public Employees Retirement System, . . .

      “Involves gross misconduct, incompetency, or inefficiency”?

      Seriously, folks . . . that’s what it says!  Most government activity is, therefore, “improper governmental activity”!

  12. In JAPAN to woo Nippon Airlines to SJ??!!! LMAO,…will the hypocrisy never stop?! What a disgusting waste of taxpayer money for so many reasons. I was denied in state officer survival training that I was willing to cover ALL costs. I requested only release time,…DENIED/STAFFING.

    Reed and Co are nauseating. So this week SJ taxpayers are paying for lavish dinners, fine sake, and high priced call girls in Japan. Maybe soon NIPPON execs will sing, “Yes we know the way to San Jose, la la lala la la lalala.”

    • Officer X,

      do like those of us in the free market do when we don’t like our employer.  GET A NEW JOB SOMEWHERE ELSE!

      • BRILLIANT! Thanks for the keen insight,…have already applied to two other agencies.

        When Reed and Figone lay off 154 officers July 1, as is a very real possibility, if an arbitrator/judge gives zeros on a one year contract, SJ will be officially be a MESS. =D

    • > State law defines An “improper governmental activity” is defined as any action that violates the law, is economically wasteful, or involves gross misconduct, incompetency, or inefficiency.

      Officer X:

      > In JAPAN to woo Nippon Airlines to SJ??!!! LMAO,…will the hypocrisy never stop?! What a disgusting waste of taxpayer money for so many reasons.

      Would you agree that Mayor Reed’s trip to Japan is an instance of “economic wastefulness, or involves gross misconduct, incompetency, or inefficiency”?

  13. ““Seems like historically it was both an honor and hardship post to serve in elective office with token pay.  Less so for local government where its not that big of a deal to show up for a couple of meetings a month, you could still have a full-time job somewhere else and just take the token pay as a measure of respect rather than real income.”“

    That is how they do it in Santa Clara. No big inflated salaries for mayor or council. I think it’s someting like $15k/yr??? It makes me sick to my stomach how Constant is collecting disability, when he seems fine. Then he collects a humongous salary for part time City work. Then he sits back and tries to take away the very thing that he took advantage of when he was an officer ( and I pronounce officer with tiny, tiny letters); binding arbitration, decent salary and benefits. I’d bet that if he was still an officer, he would be right here in this blog, with the rest of us, making his comments. How two faced can a person get? I think it’s just slimey.

    • “That is how they do it in Santa Clara.”

      Come on!  Santa Clara has the historically most dysfunctional council in the entire bay area.

      Those people spat for hours over nothing

  14. Look at San Jose Council members both past and present. 

    Are are any worth $100,000 + they are paid and another $500,000 for staff – Very Few

    Would anyone pay them the same $ in private industry or even hire them to run a $3 billion business – No

    Professional politicians or those who want to be ( carpetbag ) move to San Jose to run for next political office which should be a BIG Warning sign that they are not interested in San Jose’s good but only their professional political career

    Remember Ron Gonzales who moved from Sunnyvale and wanted to move to higher office ? 

    Did Ron help or harm San Jose ?  Harm

    San Jose Council is composed of professional politicians looking to personally benefit and enrich themselves not residents doing their civic duty

    Professional politicians have to raise millions to campaign for city, county and state offices so sell out public to campaign contributors and special interests rather than do what is right for residents and taxpayers

    You doubt what I am saying is true, look at City Hall political corruption and dirty deals that Council has make that don’t benefit us but benefit political cronies

    Anyone in San Jose for more than a month can give you many examples

    Baseball Stadium and unnecessary under market city property sales during a recession are most recent corrupt dirty deals with fake public benefits and very large private profits

  15. It’s really unfortunate they played the monetary shell game to shift ALL their salaries and staff to Redevelopment.  Maybe they could charge for access to elected leaders with the money going to the city coffers instead of campaign war chests.  Could generate at least a few $100k a year.

    Seems like historically it was both an honor and hardship post to serve in elective office with token pay.  Less so for local government where its not that big of a deal to show up for a couple of meetings a month, you could still have a full-time job somewhere else and just take the token pay as a measure of respect rather than real income.

    In our mania to remake San Jose into a big city, we’ve chased after all the trappings of a New York, Chicago and so on with large and complex legislative bodies ($$).  Its an expensive layer of redundancy.  You already pay public managers, department directors and even a city manager a lot of money to coordinate and run things.  Making the ten council members into mini-mayors presided over by a strong “super mayor” means you get a lot of two term wonder kids who are good at getting elected but don’t really know or care about the long term or fine detail of issues (especially outside their district.)  So you’ve got to hire extensive staff to provide the expert advice to make sure they understand what’s really going on and how they should micromanage issues large and small.  Was it so bad to be a big city with a small town government and mentality?  Things still got argued out at council meetings and in the newspaper, but government was really run by the staff and city manager who had the really long view. 

    I’d like to believe that many of the council-manager cities are doing much better than SJ economically because of this, but thanks to the era of unmitigated greed and selfish service, we’ve got problems throughout the state, with only the communities with the strongest and most diversified tax base weathering the recession gracefully. 

    I will point out that Campbell and Palo Alto both rolled out second tier pensions with just a council vote after some research and saved the high stakes and expensive (and divisive) campaign SJ just went through.  Seems like the more you pay council members (thusly infalting their importance) the less courageous of decisions they are willing to make without political cover.

    But I’m rather found of direct democracy where possible…so what the heck…on we go to the next round of cuts for the now perpetual SJ budget crisis.  With second tier pensions now expected to start saving at least $500k per year for a decade or more, we’re on track to saving $5 million dollars.

    • Blair,
      I agree with your comments. We do not need 10 mini mayors along with their bloated staffs. It is time they get paid a stipend like all the surrounding cities. Here is the problem; who on the city council would seriously push this idea? I doubt even Pierluigi would promote this idea. It seems this would have to be a grass roots effort to get something on the ballot. Also, most of these council members work other full time jobs. Why should they get another full time salary from the city? It is ridiculous.

    • Seems like the world has changed enough that direct service to Japan is really not that big of a deal.  Maybe direct service to China would be better?  Flying out of SJC is nicer than SFO, but for big trips, its not that big of a deal to get to SFO.  And while face-to-face is the preference of salespeople everywhere, I think the number crunchers are insisting on more virtual meetings and such to save on the bottom line.

      • “Flying out of SJC is nicer than SFO”

        Until the first act of terrorism perpetuated on an airport that won’t even have police officers on the premises unless called from elsewhere.  No bomb sniffing dogs, no sworn peace officers patrolling the terminals, baggage handling, etc.  In an era where the potential for terrorism is every present, San Jose will publicly declare itself fair game for anybody who wants their 15 minutes of fame followed by 72 virgins…

  16. The revelation that the SJ RDA has transferred supposedly untransferable funds to pay the salaries of mayor/council staff and other general fund obligations is certainly a disheartening revelation. The RDA and the mayor and council have repeatedly told us for years that such transfers were not authorized by law.  Did they all lie, or were they merely stupid?  Either answer is totally unacceptable.

    Harry Mavrogenes has a big salary/benefits package.  He has terminated lots of underlings over the last 2 years, but kept his job and salary/benefits intact.  Then he hires an assistant @ $150k plus benefits to help him do his job.  Fire the lazy or incompetent bastard if he can’t run an agency half the size it was a few years ago without expensive additional high-priced help. 

    Bureaucrats spend the vast majority of their working lives holding onto their jobs instead of doing their jobs.  Sounds to me like Harry is the quintessential example of such behavior.

    Harry was quoted as saying:“Downtown was a ghost town”.  Wake up Harry, it still is after 7:00 p.m., except for the clubbers who arrive from who-knows-where Thursday-Saturday nights, when it becomes a war zone.  And some of those partygoers cause an inordinate amount of trouble for the law abiding folks, and require an inordinate amount of police presence.

    Sure, we have some nice buildings in DTSJ, instead of the many vacant lots that existed in the 70’s, all to the tune of $3BILLION.  But the 24-hour downtown that was the desired result of that $3BILLION still does not exist…nor will it ever.

    I never thought that I would agree with Moonbeam on anything.  However, if it takes a statewide action to eliminate SJ’s RDA, I say “Go for it!”.