Get to know the candidates: Balancing budget

This is part of a series of Q&As for Mayoral and City Council candidates for the November 2020 election. Questions were submitted by Milpitas residents. 

Cities around the world have been fiscally impacted by the pandemic, raising concerns about lost revenue, and Milpitas is no exception. What would you do as a councilperson to balance the budget? Would you lay off people or eliminate services? 

Mayoral Candidates

Voltaire Montemayor: I was an SDO Special Disbursing Officer…concerned with projects, feasibility studies, and simulated eventual looks, funded with all the overheads and probable contingencies. The least for me is furlough as much as possible…with the understanding of the double effort and performance of the skeletal force; and fairly alternately. I will consider Mr Walter…the Finance Officer and the ranking staff of the City in consultation with the City Manager with more related details and personnel. 

Rich Tran: We will absolutely be facing budget cuts. I have proposed a temporary incremental ¼ of a cent sales tax increase to salvage our full time employees and mitigate the elimination of services. There will be hard decisions to make no matter what.

City Council Candidates 

Evelyn Chua: In our city the businesses are struggling and a number of them have closed. This burden of an increase of 0.25 of a % might look miniscule but for a struggling business and financially challenged residents, this is huge. Eight years, in my opinion, is too long. I would prefer four to five years. Consequently, the increase in tax will trickle down to the consumer, the Milpitas residents. Furthermore, every councilmember’s fiduciary responsibility is for the best interest of the City. He/she must be proactive and involved in every aspect of the city’s financial well-being. As expected, we’ll be making tough decisions soon. I have recommendations on expense and revenue. The City must be laser focused on budget. I recommend that the City institute a monthly report of actual vs. budgeted to measure financial performance of the city, and analyze monthly budget overruns…this must be addressed right away during the quarter. Any budget overruns must forego of other expenses to compensate for the overrun and meet the quarterly budget. We must take immediate action when there is an unexpected or big hit on the budget during the month. We also need to instill fiduciary responsibility at all levels from City Managers, Directors, Managers/Supervisors to individual contributors. Every department head must assert himself/herself as the custodian of that department. Other ideas would be to limit or reduce the number of credit cards, limit business travel, freeze hiring and promotions, and put non-essential projects on hold. Consultants of non-essential projects must be terminated immediately. 

Julian Jose Nool Hilario Jr.: With the team, we would have to look at the budget closely during these difficult times. First, I would reduce any discretionary spending. Second, set department target reductions up to 10-15% but keeping in mind the Council priorities. Third, improve process efficiencies in which departments would look into improving high manual processes. Lastly, enhance revenue by increasing fees or working with the local jurisdiction to sell some of our excess capacity to them by providing services for a price such as finance, technology, building department, public works, and public safety. My goal is not to lay off people or eliminate services. 

Robert Marini: Reduce the salaries and or benefits of high income employees before laying off employees.

Demetress Morris: Milpitas City expects $12-$16 million loss in revenue in the next fiscal year, and $4-6 million during the current fiscal year. There are words from a City press release back in March 2020: “Current major revenue sources for the City of Milpitas include Property Tax, Transient Occupancy Tax (TOT) derived from hotel stays, Sales Tax, and fee revenue related to construction activity. Together, these sources comprise 81% of the General Fund’s Revenues in FY 2019-2020.” We were expected to have a surplus of around $1.2 million prior to the pandemic It also states: “The FY 2020-21 estimated revenue across all funds of $220.3 million is a net decrease of $27.6 million, or 11.1%, compared to the FY 2019-20 Adopted Budget estimated revenue of $247.9 million.” With that stated I would be ok with the recommended reductions suggested by our Milpitas city staff for the following services: Recreational services/events — such as July 4th events — will be cut due to COVID-19 obviously, so money will be saved. Also, reductions in Public Work Maintenance and Fire Department Non-Personnel Expenditure Reductions. And I would freeze hiring.

Bob Nuñez: I would first look at ways to increase revenue; secondly I would look at ways to streamline services. This would be a community effort. Prior to the next budget adoption, there would be community conversations about the kinds and types of services we are providing and prioritizing them. I would not reduce in the area of public safety, police, fire, 911 dispatch. Public Safety is my number one priority. I would propose a hiring freeze, a review of all vacant positions and positions filled by temporary or contracted workers; suspend travel and car allowances; a review of all contracts; freeze and review of the purchase of capital assets; begin discussions with all employee unions about cost saving measures.

I would seek a private/public partnership with Milpitas USD for the development of their property along the Interstate 880 to provide an income stream to MUSD and the City of Milpitas separate and distinct from current dollars. Only after I have exhausted all of the above cost savings measures would I consider layoffs. 

Anthony Phan: During this pandemic economy, I have balanced the budget without layoffs, furloughs, or reducing the quality of essential services. This was made possible because under my leadership, the City established an emergency reserve fund to be utilized in the event of unforeseen economic downturns, such as the one we are currently experiencing. We planned ahead, while many cities didn’t, and that’s how we’ve been able to keep our families safe and maintain a high quality of life. I will add however, that we do project an $11 million deficit, and our reserves will not last forever, which is why I’m asking residents to lend a hand in approving Measure F, in order to keep first responder and public safety services funded and retain a high quality of life for our families. It is so important to note that revenues received are subject to community oversight, annual independent audits, and that sales for food and beverages are completely exempted.

Suraj Viswanathan: We need to get our businesses re-opened to stop the revenue loss. That’s really the best and only solution. Other proposals are just band-aids that won’t really solve the problem. Raising taxes will just reduce economic activity and consumer spending and that’s the last thing we need right now. I would not have voted a $2 million pay raise for city employees. 

Tiffany Vuong: As your councilmember, I will look for ways to increase our revenues without cutting important community programs and services; my priority is to reduce the pandemic’s harmful impacts on our residents. Layoffs would be a last resort for me. However, the budget for fiscal year 2020-2021 which was approved in June included a $4 million increase for permanent salaries. We should make sure that new hires and raises are practical and justified, and we should consider negotiating for salary adjustments to be tied to changes in the cost of living. Primarily, I will seek to tax large corporations and industrial polluters in Milpitas to ensure that they are paying their fair share for using our city infrastructure. For instance, we now have two Amazon distribution facilities and an Apple warehouse. Large corporations like Amazon are seeing their profits skyrocket during the recession, while everyday people are going into debt and the city is eating up its reserves. These kinds of developments do not bring many jobs nor do they generate sales tax since they are not stores. Developers want to create more distribution and warehouse centers here because we have “low rent” and because of our “proximity to higher cost Silicon Valley cities” (Economic Development Strategy Draft Report). Milpitas is providing them with a number of benefits: proximity to many highways and saved money on rent compared to if they were in a neighboring municipality. They are using our city infrastructure and impacting our roads, so these big dollar companies should pay their fair share of taxes.