San Jose lawmakers aim to increase financial accountability

San Jose is strapped for money during the local emergency — $72 million to be exact — but a new plan unanimously approved Aug. 19 aims to ensure the City Council tightens its purse strings and uses taxpayer dollars wisely.

Despite the growing deficit, the council must continue providing necessary services to the public. Councilmember Lan Diep, who drafted the plan, offered actions to the Rules and Open Government Committee to help the city save some cash. He also proposed more checks and balances for local budgets, beginning with an auditing process.

The city auditor will audit the police, fire, planning, housing, transportation, public works, environmental services and parks departments every four years to evaluate where spending could be decreased.

“We have to recognize that we’re able to get through today now because we did save up a reserve fund,” Diep said. “Whenever we get to ‘good times’ again, and there is a surplus of extra money, it’s going to be unrestricted dollars. There’s going to be this urge to spend it to make up for all the years of lean spending. But I think even when we face that, we should continue to be disciplined.”

A new commission comprised of residents appointed by the City Council will also oversee ballot measures requiring tax hikes or fee increases. The commission will create a report detailing whether the city is using the money for its intended purpose.

“We often hear about everyone being overtaxed but not getting the benefits,” Diep said.

According to Diep’s memo, San Jose only receives 13 cents for every property tax paid.

The city has drawn $11 million from its budget stabilization fund and still has $21 million to use for future emergencies. Diep stressed the importance of saving 50 percent of surpluses to replenish the city’s general fund and pay off local debt.

To restore the general fund, the city would have a “long hill to climb” and would need to save about $190 million, according to Diep.

“If we had this budgetary item prior to the current economic recession, I think that we would be in a better place today,” said Eddie Troung, director of government and community relations for the Silicon Valley Organization. “But instead of looking back, we can certainly look forward and see what we can do to prepare ourselves for the next crisis.”

According to Diep, the measures would help the public better understand how taxpayer money is being used.

The last part of the plan would attempt to keep San Jose connected with state and national budget policy.

“Before our budget decisions are made at the council, we will have staff come and tell us what they know about the budgets of the federal government and the spending priorities of the state so we can kind of find some sort of synergy to the maximum extent possible,” Diep said.

Budget accountability measures will likely appear on the Sept. 22 City Council agenda.

“Having strong guidance that we’re focused on building reserves is an important thing to do in a city that has chronic fiscal challenges,” Mayor Sam Liccardo said.

Contact Carly Wipf at [email protected] or follow @CarlyChristineW on Twitter.