"A gift of public funds"

City Council voted last week to foot the entire bill for repairing the streets in the South of Forest neighborhood. It was a difficult decision for some Councilmembers. Besides the fairness issue, there are the ever-present concerns about fiscal health.

Fairness is an issue because there are similarly-annexed neighborhoods that had to pay for their own improvements. Fiscal health is a concern because the City has been running pretty lean since the recession of 2002.

Understandably, many public figures voiced strong opinions, on both sides. "Simply put, this is a gift of public funds," said former Mayor Bill Gissler.

What's remarkable is that there may be an even bigger gift of public funds going out on Santa Clara's next sleigh. Yet we have not seen anywhere near the same kind of outrage, from any public figure, elected or otherwise.

In fact, it's quite the opposite. Many have been very willing to fall on their swords to fawn over the would-be beneficiaries of this gift. By the way, the reindeers are headed for Ohio, because these lucky boys and girls are not even Santa Clara residents!

Exactly how big a load is Rudolph hauling? Here's a comparison to bring it home.

Joe Average is just getting by. His savings are cleaned out. He was maxed out on his credit cards a couple of years ago, but he just managed to pay that off with careful budgeting. Still, Joe and his family are pretty much going hand-to-mouth on their annual income of $70,000. Joe's wife needs to replace her 1983 Dodge Omni. Joe buys her a 3-year-old Dodge Neon for $8,000. He has to take out a loan, because he doesn't have that much cash. Credit counseling will probably frown on that, but hey, it's either that or she can't get to her job. Then Joe buys for himself a brand new Ferrari F430 for $178,000, on credit.

You think that's far-fetched? This comparison is not at all hypothetical. Joe's salary is the same as the median income in Santa Clara. Joe Average can easily be our City.

Santa Clara is just barely running a surplus, and the forecast is for zero surplus by 2012 ¹. We had a budget deficit from 2003 to 2006. The General Fund Reserves are low. There is a hiring freeze on 30 staff positions ². The SOFNA repairs cost $15M. City Council bit the bullet and committed to spending that money, even though it would probably mean deficit spending. Now the stadium proponents want Santa Clara to spend $297M to build a ballpark that will sit empty 11 months out of the year.

Look at the numbers in comparison:

• The Neon for Joe's wife costs about 1/8 of their annual income. The SOFNA repairs cost about 1/8 of the City's annual revenues.
• Joe's Ferrari costs about 20 times more than his wife's Neon. The stadium will cost 20 times more than the SOFNA repairs.
• Joe's Ferrari costs 2.5 times their annual income. The stadium will cost 2.5 times the City's annual revenues.
• Ferrari parts and labor are ... well, you don't want to know. The stadium operating costs are ... well, "Trust us" said the 49ers.

So which is the more outrageous "gift of public funds?"


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¹ City Council meeting minutes, May 15, 2007, section 4: Special Order of Business, item E: Joint Study Session on the Proposed Five-Year Financial plan for 2008-09 through 2012-13 and Proposed Capital Improvement Project Budget for FY 2007-08. Report, page 8 of 18.

² Ibid, page 4 of 18.