After several weeks of deliberation, the Santa Clara City Council has opted to make cuts to police and fire services.
Balancing looming budget deficits, essential city services and public safety has been on the minds of the Council for the past few weeks, with discussions in each of the two previous meetings getting deferred to Tuesday night. Although the cuts were not disproportionate to other cuts in other City departments, several Council members saw them as “essential.”
Kenn Lee, the City’s Finance Director, had previously told the Council that COVID-19 impacts to the budget necessitated cuts across all departments to avoid layoffs. To do so, the Council would need to eliminate budgeted positions in the police and fire departments, reduce community officers and programs such as DARE and decommission a fire engine.
Mayor Lisa Gillmor and Council Members Kathy Watanabe and Anthony Becker iterated their positions from previous discussions to have police and fire services remain untouched. However, leaving public services intact would have required the Council either to devastate its reserves or make 58 layoffs in other departments.
Tuesday night, Lee presented the Council with a plethora of options related to, what he called, “rebalancing actions.” If the Council opted to keep police and fire services untouched, it also had the option to pay for those services out of the budget stabilization reserve or with potential future transient occupancy tax (TOT) money.
Police Chief Patrick Nikolai joined the choir opposing cuts, saying crime has “skyrocketed” during the pandemic, pointing to crime statistics he presented that show an increase in some violent crimes — among them seven shootings — in the back half of 2020.
The statistics provided did not list whether the numbers were calls for service or arrests made.
Several members of the public also called into the meeting to tell the Council to use the budget stabilization reserve to maintain public services at their current level.
Alex Torke, President of the Police Officers Association, said the cuts are unnecessary because the hiring freeze achieves the same savings. He agreed with other public members who said the City should use its reserves.
“We are hoarding it … because we might need it for some mysterious bogeyman later on,” he said. “This freeze is fruitless. It only serves to codify cuts to public safety. It is defunding by another name, and politics and personal conflicts are driving this conversation. This is about public safety. For some, this is an abstract concept on a spreadsheet, but for most of us, it involves very real people and very real problems.”
But those supporting the cuts — Vice Mayor Raj Chahal and Council Members Suds Jain, Kevin Park and Karen Hardy — said the choice to make cuts was not born out of a disregard for the importance of public services. Instead, Chahal said, it was a need to balance multiple less-than-desirable scenarios.
Further, Chahal said, if the City has additional revenue later, perhaps from federal money or unexpected revenues, the Council can always reallocate money to police and fire.
“We all live in the city … It is not that we want to make the city less safe. We have no intention of that,” Jain said.
The cuts aim to whittle a $19.1 million chunk out of a $42 million ongoing deficit brought on by the pandemic. The cuts passed with Gillmor, Watanabe and Becker voting against them. Another motion passed unanimously, exempted the fire engine decommission, opting to fund the $750,000 for its continued use from the budget stabilization reserve.
ManCo Makes An Appearance
In a study session, Lee also presented the upcoming stadium budget to the Stadium Authority Board.
Lee raised several topics that he characterized as “critical issues.” Not only is the Stadium Management Company (ManCo) not maintaining the stadium adequately, Lee said, it still has yet to provide sufficient documentation to justify $2.7 million in non-NFL event losses.
Further, ManCo is still using the revolving loan fund. Lee said he expects the amount of money ManCo has withdrawn from that fund to grow to $7.6 million in fiscal year 2021.
Despite this, the Stadium Authority is projected to pay $38 million toward its debt on the stadium.
Jeff Fong, Vice President of Finance for the 49ers, addressed the Board, offering verbal ripostes to some claims repeatedly made by City employees. Fong said some of ManCo’s recalcitrance has stemmed from exorbitant costs for City employees working at the stadium.
Since 2019, the last year there was a full schedule of events at Levi’s Stadium, employee costs at the stadium have risen 116%, Fong showed, and public safety costs have ballooned 74%.
Additionally, Fong said, the Stadium Authority has only budgeted 1% of its employee cost toward ameliorating what the Stadium Authority claims are issues surrounding procurement.
City employees’ claims that the Stadium Authority is not paying $8.2 million in labor costs because of issues surrounding procurement is inaccurate, Fong said, since more than half of that money is for City employees.
“The majority of the costs withheld have nothing to do with procurement,” he said. “We strongly recommend that you start paying your bills.”
Fong took issue with the Board’s legal costs to fight lawsuits brought by the 49ers.
“It seems to us that we should be committing to collaboration instead of escalating litigation,” he said, later adding: “The pandemic should cause us all to take a long hard look at all the money wasted on lawyers.”
Moreover, Fong detailed some of the reasons the stadium is not generating as much money as expected.
Not only is the curfew deterring artists from performing at Levi’s, but disclosing the economics of events, as the City did for the Taylor Swift concert in 2019, discourages promoters from choosing the venue. He also pointed to what he called “bureaucratic” complex and costly City approval such as was required for the Rolling Stones concert, also in 2019.
Fong’s presentation ignited City Attorney Brian Doyle, who characterized it as “absurd” and ladled with “personal attacks.” He called Fong’s insinuation that the Board ought not to remain embroiled in legal feuds with the team “absolutely insane,” blaming the 49ers for bringing the lawsuits.
Doyle justified the increase in City employees working at the stadium by saying such oversight is necessary in the wake of the Red Box Bowl, where ManCo made evident its self-dealing, funneling sponsorship money back to itself.
“You’re allocating expenses back to the 49ers for the benefit of events that are money-losing events,” Doyle said.
He called Fong’s approach a “strange way to build a collaborative relationship.”
The Stadium Authority budget will return to the Board for approval March 23.
Eminent Domain Underway For SVP Transmission
The Council also voted unanimously to start the eminent domain process on two easements needed for electric transmission for Silicon Valley Power (SVP). The two easements are located on private property at 1051 Martin Ave. and 2435 Lafayette St. and are owned by Bay Area Cellular Telephone Company and Wesco Properties, Inc. respectively.
Manuel Pineda, Director of SVP, told the Council that negotiations have been ongoing for 11 and nine months respectively. Acquisition of the easements is necessary and has been done with the maximum public good and minimal private harm in mind, he said.
Although the eminent domain process takes roughly two years, Pineda said the City will continue to negotiate with the owners to reach an agreement before then.
Nobody from the public commented on the topic.
Consent Calendar Spending
The Council approved the following spending in one motion via the consent calendar:
- $275,000 to Perkins + Will for “professional services to prepare the Amendment to the Tasman East Specific Plan to allow 1,500 additional units in the Tasman East area;” new contract amount: $1.46 million
- A $362,981 purchase agreement with Reed & Graham, Inc. for the purchase of hot-mix asphalt
- A $134,551 increase to a contract with e-Builder, Inc. for “license and support fees for capital project management software to cover the cost of the annual software subscription as well as enterprise implementation, setup, deployment, training, and enhancements or integrations”
The next regularly scheduled Stadium Authority meeting is Tuesday, March 16 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.
Members of the public can participate in the City Council meetings on Zoom at https://santaclaraca.zoom.us/j/99706759306; Meeting ID: 997-0675-9306 or call 1(669) 900-6833, via the City’s eComment (available during the meeting) or by email to PublicComment@santaclaraca.gov