Facing the perils of a looming $71.6 million deficit, a San Jose lawmaker is proposing to divert councilmembers’ unused district funds into the city’s budget.
For the 2019-2020 fiscal year, each councilmember received $661,272 to pay for staff salaries, supplies, services and programs for residents in their districts. But the funds, which are replenished every year, are rolled over and pile up if left unspent.
Councilmember Johnny Khamis has suggested a one-time cap of the council’s district funds to $100,000 for councilmembers and $250,000 for the mayor and putting the excess dollars back into the general fund for essential services.
San Jose is grappling with a gaping budget deficit resulting from the coronavirus pandemic and facing cuts to public safety, libraries, recreational activities and furloughs for 1,000 employees. Khamis said these leftover unused dollars could be put to good use patching up the deficit and avoiding service cuts and staff furloughs.
“Most people, we have leftover (funds), and some leftovers are bigger than others,” Khamis told San José Spotlight. “If your budget has more than $100,000 left over, there’s just no way to spend it.”
The excess funding from the ten councilmembers and mayor equals more than $2.5 million, according to documents from Khamis. That money can be used to maintain city services, Khamis said, like hiring additional community service officers, boosting disaster preparedness, improving parks and bolstering neighborhood traffic safety.
“A lot of councilmembers have actually asked for more money,” Khamis said. “If you look at the budget documents, they say ‘Hey, pave this,’ or ‘We want a stoplight here,’ when in fact they can actually pay for these things out of their own council budget.”
But the South San Jose councilmember said he’s concerned that his colleagues will instead hold onto the funds.
According to the documents, Councilmember Lan Diep has the most money piled up — $980,000 — while Councilmember Sylvia Arenas had the least leftover funds with $29,000, indicating she’s spent her yearly allocation on council staff, programs and services in her district.
Diep, however, told San José Spotlight that he often saves funds by hiring fewer staffers and plans to spend the money to provide extra services for residents of his district in the Berryessa neighborhood.
With unpaid interns, no chief of staff and the least staff members of any councilmember, Diep has conserved most of his funds.
“Being somewhat of a younger person with no family of his own, who doesn’t have parental responsibilities . . . I’ve worked late hours and taken it upon myself to do a lot of the things that another council office might do with more people that I’ve been able to do with smaller staff,” Diep said. “So those are savings that I’ve been able to save for District 4.”
Diep said the money saved has gone into services such as monthly dumpster days, allowing residents in his district to clear out excess waste for free and prevents illegal dumping. Citing his efforts to conserve his office’s funding, Diep said it would be unfair to give it to the citywide budget.
“I think every councilmember has done their savings to different degrees and they want to keep the benefit of their savings,” Diep said.
Khamis praised Diep for being “a good steward” of his district’s money, but said he should transfer it into the general fund to prevent the city from losing services and staff due to the massive budget deficit.
“I’m not saying people are not budgeting correctly, some of them are saving,” Khamis said. “A lot of these council offices are being good stewards of taxpayers’ money.”
Though Khamis has not yet presented his idea to the rest of the council, he’s confident the proposal will gain support. “I’m sure many councilmembers would agree with this strategy,” Khamis said. “It doesn’t have to be permanent, but it could be just until we overcome this hurdle.”
While Diep doesn’t support Khamis’ plan to reallocate his district money to the general fund, he has another idea for helping San Joseans hit hard by COVID-19.
“One of my proposals was simply to do a direct stimulus to residents of District 4 who live in census tracts that are below the poverty line,” Diep said. “I’m able to fund that directly out of my savings and not from the general fund.”
Diep’s stockpile of unused funds invited criticism from his political rival, David Cohen, who is vying to unseat the one-term councilman in November.
“Why didn’t our current councilmember invest the $1 million district budget in local projects?” Cohen posted on his campaign Facebook page last month. “Think of what this money could have done if invested in the community. Now the city is taking it back and putting it in the general fund.”
San Jose Mayor Sam Liccardo did not respond to a request for comment on the proposal.
But as councilmembers brace themselves to sew together a tattered budget, Diep said any project in San Jose has a hefty price tag.
“Once you get to budgeting, you realize that even with a huge sum of money, you can’t do that much in the city of San Jose,” he said. “When a crosswalk costs $60,000 to install, there’s not a lot of juice you can squeeze out of, you know, a $500,000 budget.”
Councilmembers will consider Khamis’ idea at next week’s council meeting on June 15.
Contact Mauricio La Plante at [email protected] or follow @mslaplantenews on Twitter.