The Silicon Valley Voice

Power To Your Voice

Milestones – Power From the People! – Opinion

By now you have read the stories or watched the Santa Clara City Council wrestle with the City’s structural deficit. In this case, structural means it will be with us into the future. Revenue is not enough to meet the obligations. And yes, it is true, the major demand on the budget is salaries.

Mayor Gillmor could be blamed for giving away the store with her council of cronies a few years ago. But that was only part of the problem. Once you give city employees raises, salaries can never be reduced. Along with the salary increases are pension contributions and employee benefits that are mandatory.

So, if you are wondering why certain projects like our parks, libraries and recreational facilities are failing to get attention and service…it’s a monetary shortfall.

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Yes, the City makes lots of money. What creates the shortfall is, this money is already spent through previous agreements made with employee unions and City employees. This leaves a shortfall in the community improvement account; which includes streets, sewers, traffic lights and dozens of other services.

Face it folks, Santa Clara residents are spoiled. The services in this City are tremendous and, quite honestly, no one wants Santa Clara to abandon any service.

So, is there a solution? The answer is yes. And it will require the approval of the majority of residents. The resolution for the oncoming problems would take a positive ballot vote from a simple majority of voting residents.

Silicon Valley Power (SVP), owned by Santa Clara, makes money. In fact, it makes a lot of money. However, the City is limited by fiat (the city charter) as to what percentage the City can receive. This is currently limited to 5% of SVP’s profit.

If Santa Clara were to receive say 10% of SVP profits, this would solve the financial issues for the City into the immediate future and maybe even longer.

Sounds too simple, you say. So, what’s the problem, you ask? Why not just raise the percentage and solve the financial issues for the City?

Because…Santa Clara City Charter limits the City of Santa Clara to 5% of SVP’s profit. This was designed to keep City officials from dipping into SVP revenues and causing deficits with them.

Therefore, to change the percentage of SVP profits the city can draw from 5% to 10%, residents must approve it with their vote.

This would mean a change to the City Charter. Folks, it’s that time. Santa Clara needs to make the best use of City revenues including an increase from SVP profits.

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4 Comments
  1. Ted 8 months ago
    Reply

    Where does the 95% go?

  2. Ted 8 months ago
    Reply

    Where does the other 95% go?

  3. John Haggerty 8 months ago
    Reply

    Thank you for your timely, highly pertinent, and thought-provoking editorial.

    I do not agree, however, with your initial premise that public employee salary/benefits cannot be lowered. Nothing in the City Charter says that. (Admittedly, it is not a frequent occurrence.) If, during past collective bargaining negotiations union-friendly, union-supported City Council majorities were too generous with our City’s money, then in future collective bargaining negotiations our current union-neutral, union-skeptic Council majority should promptly claw back some of that irresponsible generosity. This would be a promising example of “thinking outside of the box.” Our City should not remain boxed in this current financial rut.

    With respect to your alternative proposal to double our City government’s share of SVP’s profits to help pay for the above-referenced ballooning City payroll, I am concerned that that proposal might: (a) further incentivize future City Councils to increase the rates SVP charges our City’s residents (in effect, further indirectly taxing those residents); (b) cut into SVP’s capital improvements budgets/public safety expenditures; and (c) more generally, result in increased SVP rates thereby leaving our City a less attractive place in which to do business.

    In sum, our City government urgently needs to promptly, courageously, intelligently and deeply cut its expenditures, not increase its already ample revenues from the citizenry.

  4. GoodShipSantaClara 8 months ago
    Reply

    As asked above, Mr. Barber should disclose the current status of the other 95% of profit. Or perhaps he means that the Charter permits SVP to earn a 5% profit? If the other 95% of profit is not profit, but in a capital account, that would simply be another raid. If it’s providing a cushion to bloat compensation on that side of the fence, that’s another matter. Mr. Barber, please be clearer.

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