Budget Study Sessions on the Way

Put on your budget caps, because the study sessions start next week. The first in a series of budget meetings and public hearings takes place Wednesday, with final adoption of budget for the next fiscal year scheduled for Tuesday, June 19.

Currently, the city projects a $9 million surplus for 2012-13, about one percent of total expenditures, according to a press release sent out by the city manager’s office Monday. The main reason for the reversal in fortune from a year ago, when the city had a shortfall of $115 million, came through reductions in services, layoffs and pay cuts.

Taking Mayor Chuck Reed’s suggestions for the budget in mind, City Manager Debra Figone suggests “a two-year approach” by taking this year’s $9 million surplus, “along with reserving $13.5 million in one-time funds,” to cover the $22.5 million shortfall predicted for 2013-14. That could mean “limited layoffs or reassignments of staff in certain programs,” Figone said, “but I’m also recommending that we increase staffing levels in a few critically important services where staffing is far too thin.” Overall, though, Figone said the city plans to add a net 70 positions.

According to the city manager, the proposed budget includes a total of $2.6 billion for all City funds (General, Special, and Capital). This is $278.5 million (9.8 percent) below the 2011-2012 Adopted Budget. The budget as proposed does not yet include funds that will be re-budgeted later this year and added to the final approved budget to complete multi-year projects.

Below are the “Highlights” of Figone’s 2012-2013 proposed budget:

• Continue services that were funded on a one-time basis in 2011-2012, including three police officers for field patrol, two park rangers, the safe school campus initiative at middle schools, an enhanced crossing guard program, and operation of the Lake Cunningham Skate Park.

• Open the Seven Trees, Bascom, Educational Park, and Calabazas branch libraries and the Bascom Community Center. These facilities were all constructed using general obligation bonds approved by San José voters in 2000.

• Begin to address some of the most immediate and critical of the City’s unmet or deferred infrastructure needs, including $2 million for repairs at the Water Pollution Control Plant; $1.9 million to reduce sanitary sewer overflows; and $1.8 million to increase the level of critical basic preventative maintenance at City facilities.

• Address essential operational needs to strengthen the organization, meet community expectations, or mitigate the potential risk of higher long-term costs. These include funding for police targeted enforcement, park landscape irrigation, additional park rangers, street sweeping signage, and staffing for employment, accounting and information technology support.

• Fund a limited number of programs and initiatives identified in the Mayor’s March Budget Message as approved by the City Council, including a one-time increase of $2 million to nearly double the City’s support for gang prevention, intervention and suppression programs through the Mayor’s Gang Prevention Task Force, as well as fund $600,000 for senior services and wellness programs.

• Continue to implement new models for service delivery that can help reduce costs or improve service levels and quality. Examples include a pilot program to realign landscape maintenance staff into larger teams to provide comprehensive servicing of an entire park in one visit rather than multiple smaller teams making several visits; focus pavement maintenance on the 400 miles of the priority network of major streets that carry 87% of traffic but eliminate preventative maintenance on local/neighborhood streets; and contracting out curbside management services at the Airport to reduce the Airport’s costs by approximately $1 million.

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

17 Comments

  1. Demand e mayor and council Fire the city manager. She takes home a higher salary than the Governor. Haven’t you had enough?

    • We seem to have forgotten that Figone is a well-known quantity.  Even at the step just below Mayor Hammer’s city manager, Figone cut quite a wide swath in city hall demonstrating her slogan, “Dirty Deeds Done Dirt Cheap.”  I’m surprised the populace has forgotten the damage she was willing to do to the city at the behest of Hammer.

      I’m sure that record recommended her services to Chuck Reed who appreciates having his own hatchet woman.  Of course she also enjoys exercising the power to hurt others as she demonstrated during the Hammer years.

      Reed hasn’t changed.  Why would anyone expect Figone to have changed?

      Firefighters and law enforcement officials should have seen this coming, and worked to support candidates who could have more carefully worked to set the city’s finances on track.  Sometimes we need an ax, but in this pension matter we just needed a small scapel applied over the last 8-10 years.

  2. I just got the pension mailing from Chuck Reed.  The thing that got my attention was that the average police and fire pension over the past 10 years averages over $100k.  I wonder if that takes into account free medical too?

    I support public safety, but I can’t afford to pay for it.

    • Thank you for supporting safety.  From what I understand (and I am not an employee but believe what the Mayor is doing is wrong), the City promised free medical in lieu of a raise one year and then never funded it—not once paid toward it. Each FF has now agreed to pay entirely for his/her share of retiree medical and 1/4 of the unfunded liability.  Thus, from this moment on—retiree healthcare costs you nothing.

    • One more thought—does it say who the Mayor included in his “average.”  As you know the City has had many high ranking fire officials retire in the last 10 years including multiple chiefs. If what he is trying to do is to tell the public what the average FF on the line is being paid in retirement then including anyone with the title of chief is intentionally skewing those numbers.  I wonder what it would like if they were removed—I bet it would not be 100K.

    • S randall,

      Quit drinking the kool aid.  Ask the mayor to prove the facts on pensions.  Very few make that kind of pension, an public safety personell would have to do 30 years to come close.  The Mayor wants you to thing EVERYONE who retirees gets 100K!  Most non public safety make less than 40K in retirement. AND there is NO FREE medical.  Does not exist, they may say you can take Kaiser BUT you still pay big for prescriptions and CO-Pays on visits. (ave 2k+per yr)  And there is NO bonus checks each year.

      This is the crap that the city puts out.  GET educated!  This is what they want you to believe with Measure M.  Do your home work before you vote on this vague, misleading measure.  Ask why the city is hiding so much money,  ask why the city came out with this budget study after Steve Kline questioned the city spending.  Ask why they only claim the amont in the general fund!  Ask them about careless spending on RDA and why they have a 4 BILLION problem when Chuck was on board.  Ask them why they are still spending to buy land and improvements for a MLB park which has not been approved.  Ask why we have a 92 million building sitting empty!  Enough.

    • Does it state any where on there that City Employees CAN NOT COLLECT Social Security?

      Fact :Or that MAYOR REED Personally voted to approve any and all enhancements to benefits IN LIEU of raises for that last 15 years?

      The Mayor has misrepresented the Fact MANY times?
      650 million dollar deficit?
      Fact: closer to 240 million

      city employees receive 90% after 15 yrs. of service & free med/den for life
      Fact: you must work at least 30 yrs to have a chance at 90% ,Nobody gets free med/den

      city tried to negotiate with workers?
      Fact: city did everything possible to get to this illegal Ballot measure

      Fact : city workers offered a proposal that would have saved 500 million inside of 5 yrs.( exactly what the Mayor wanted) and then it was Denied without being looked at

      Mayor says city is broke
      Fact : Mayor Reed is pushing for a Baseball Stadium ( that we can not afford) with no guarantee that there will ever be a baseball team here.
      Fact : Almost all stadiums are losing money

      Why should we believe anything that this man says or prints? I voted for him believing that he was going to bring “Open Government” to San Jose. he has not
      He is not a man of his word and now wants to break all promises to city workers. Im sorry to say he cant be trusted @ least not with my vote

    • The predominant source of all platforms presented in all political mailings comes from the financier of these expensive fliers. Go to the bottom and see the PAC’s. Foremost, the Chamber, now nationwide the worker bashing club of large Corporate interests constantly disseminating misleading quotes. The other is a Realtor PAC who’s primary focus is maximizing their take on property transactions. The Mayor and his henchmen owe their allegiance to this, not the municipal worker or the resident taxpayer.

  3. Okay Ms Figone’~~~~
        No where in your elevated numbers did you include what the actual numbers of dollars you’re allocating toward “conflict of interest attorneys, or consulting fees. You and Mayor Reed had better hip pocket a couple million dollars as you should fully expect exhorbant litigation in the near future. Gee, did you forget to explain that to the citizens….
        Four million dollars to the Mayor’s Gang Task Force~~~What is that money used for?  Preventive programs?  The homicide rates are alarming as police try to put a stop to senseless violence. Where are the monies going and why aren’t things working?  Are they for community based organizations? Who are they and what are they doing? Gang Violence is up and you reward organizations by doubling monies their way.
        ~~~I believe its time for Ms Figone and the Mayor to get their heads out of the sand. Being purposely antongonistic, stubborn and dictatorial does not bode well in the political arena. Someday soon you will all be regular citizens of San Jose and people will remember you for what you did to this once great city.

  4. s randall,

    Your concern with the cost of public safety retirements is justified, but here’s some information that might help with your understanding of the situation.

    Prior to about ten years ago, top-step, thirty year veteran officers were pensioning out in the low to mid 60k range. Their pensions were the product of three sources: the contributions deducted from wages earned, the pension component of their total compensation package (a percentage set by the city at the plan’s inception), and the investment revenue earned by the pension plan. Of these sources, one, that from the officers’ wages, was mandatory; one, that from their compensation package, had an optional component (the city could lower or even skip paying it in years of robust fund earnings); and one, that from the pension plan’s investment stream, which was subject to the fluctuations of financial markets.

    An officer retiring ten years ago moved from the city payroll (funded by taxpayers) to the pension fund (funded wholly by the plan). His pension was, as had been the case for every officer since the plan was a decade underway (the 60’s), costing taxpayers not one dime during his retirement. Due to the demographics of the department the pension fund was able to benefit from three full decades of increasing membership (contributors) coupled with a low, steady rate of retirements. The accumulation of these contributions, working capital for 25 to 30 years, allowed for robust growth in the plan via investments, the end result being a pension plan that was, up to about a decade ago, fully funded (despite the spike in retirements in the previous decade). In other words, the plan was functioning as designed.

    Unfortunately, that fully-funded pension plan was too much temptation for our city leaders to ignore; the council started to spend it, promising away (to politically naive union negotiators) tens of millions of pension dollars (via increased retirement benefits and huge wage increases) and receiving the political allegiance that everyone of them coveted (Chuck Reed included). Crossing their fingers and hoping to have moved on to state office before the next financial bubble burst, our leaders put this jewel—this fully-funded workhorse of a pension plan—on BLACK and said, “spin the wheel,” ready and willing—as are all politicians, to take credit for the success, or blame any failure, on somebody else. Well, it took four or five years before the wheel stopped on RED, but it took only four or five minutes for Chuck Reed to slander the city’s cops and firefighters as “greedy and overpaid.”

    The huge mistake made by our public safety unions was in failing to see the pension fund for what it is: THEIR money, THEIR security. Had they viewed it properly they would’ve balked when our political leaders agreed to buy their votes with it. The city wanted to compete with the local job market, which was understandable, but didn’t want to make the sacrifice to do it (which would have required pre-funding the plan for the increases it granted so as to keep it fully-funded). Instead, they went ahead and kept spending on their pet projects and “banked” only the assumption that they could, in the event of catastrophe, deflect the blame.

    Now the unions have agreed to pay their part of the penalty; they’ve taken a pay cut and offered a retirement give-back, but our politicians are not interested. They’ve moved on to greener pastures—those made lush in the public sphere by economic hardship and political anger. So now skilled liars like Chuck Reed buy votes (from good people like you) by identifying with the put-upon, outraged taxpayer and bargaining away, under the false flag of “reform,” YOUR police department, YOUR security.

    • Wow,  I hope this goes city wide.  Why do the unions not put this information out to the public.  Well stated!  This mayor and council all full of crap and need to be exposed.

      Thank you

    • Excellent analysis.  Thanks for the history lesson.  My only contention is that I don’t remember any huge wage increases.  As I recall, increased retirement benefits, sick leave buy-out, etc. were all City proposals in lieu of anything but very modest wage increases.

  5. Do not forget the $6 billion of bond debt. Annual service to this debt is masked in all the numbers. One must compare this burden on the tax payer compared to the resident taxpayers tax burden on the much quoted “unsustainable” $240 mil of unfunded liabilities for City workers and retirees.

    • …and don’t forget the $4 billion in Redevelopment Agency debt that Reed and Company plan on paying down with General Fund Money, the sale of a measly $60 million in old RDA land (that is dollar amount is below fire sale cost at fractions of a penny on the dollar) to Lew Wolfe, Swenson, McEnery and the like, and let’s not forget the tax increments that property owners who owned in RDA districts will be saddled with until the end of time… Those same tax increments that the current council and former RDA Board of Directors wants to continue to collect but divert from RDA debt retirement to their own project schemes.

      • Don’t forget that the State may nullify that sale because it was entered into so far after the City knew RDAs were a thing of the past. I wonder if the City was smart enough to put a clause in the contract that it need not pay damages if the State voids the sale.  If not, I wonder how much the City will owe Lew Wolfe—of course that will be the fault of the public employees!