Cupertino Facts

Year: 2023

  • Liang Chao Presentation for 5/9/23 Meeting: Individual Councilmembers’ Right to Information

    Liang Chao Presentation for 5/9/23 Meeting: Individual Councilmembers’ Right to Information

     

  • April 21st Newsletter: Cupertino Braces for Budget Cuts, and What’s Next for Lehigh Cement

    April 21st Newsletter: Cupertino Braces for Budget Cuts, and What’s Next for Lehigh Cement

    Two weeks ago, we highlighted the impact of Cupertino’s declining revenue on community programs like Shakespeare in the Park. This email examines the latest news of budget cuts in Cupertino, along with additional background on how the situation arose. 

    We also share updates on a topic that, directly or indirectly, affects many Cupertino residents: the future of Lehigh Cement Plant and Quarry, located on Stevens Creek Blvd in unincorporated Cupertino. The cement plant has been one of California’s worst air polluters. The quarry that feeds the plant limestone has forever altered our view of the mountains, and polluted water. Most noticeable is the truck traffic, dust and noise. 
    As both of these situations are ongoing, we will continue providing updates to keep you informed.

    Cupertino Braces for Massive Budget Cuts

    On April 13th, the Cupertino City Council discussed the sobering budget impact of an anticipated 30% reduction in City revenue. The potential revenue reduction was first identified in December 2021, and repeatedly disclosed throughout 2022. Now, even cost-cutting of services and staff will not prevent the City from running in the red for at least a decade.

    WHY IS REVENUE DOWN?

    Cupertino’s press release attributes the decline to “the anticipated outcome of a California Department of Tax and Fee Administration (CDTFA) audit of one of the City’s taxpayers.” This taxpayer is most likely Apple. 
    In the late 1990s, the City helped rescue Apple from failure by sharing its sales-tax revenues. As permitted by State law, Apple assigned its Cupertino headquarters as the point-of-sale location for all online sales of its products in California; Cupertino receives the sales-tax revenue and shares it with Apple.

    The State is considering terminating this long-standing agreement, which could hobble the City. However, it is not clear what legal standing, if any, the State has if it were to end tax-sharing agreements between businesses and cities. An article from Bloomberg Tax provides more detail. 

    CITY HALL SUBCOMMITTEE RINGS WARNING BELLS

    In October 2022, the City Hall subcommittee, on which Councilmember Kitty Moore served, warned of the audit’s potential short and long-term funding impacts. The subcommittee advised against spending money on building a brand-new City Hall. 
    Instead, it recommended a seismic retrofit and renovation of the existing City Hall and utilization of the recently-purchased annex building for the Emergency Operations Center (EOC) as the most efficient, economical solution. Additionally, to improve fiscal oversight, Councilmember Moore brought our Audit Committee into compliance. 
    Disregarding the warning, in December 2022, Mayor Hung Wei, Vice Mayor Sheila Mohan, and Councilmember J.R. Fruen pushed for a new and larger $72 million City Hall. They also removed several fiduciary duties assigned to the Audit Committee, and reduced the number of times the Committee will meet each year. 

    UNCERTAIN FUTURE

    The worst-case scenario, yet to be modeled by the City’s finance department, would require Cupertino to refund past disbursements to the State. It is unclear what, if anything, the current Council majority is able to do about this situation, other than lodge a boilerplate appeal, given this majority’s demonstrated unwillingness to focus on fiscal details. 
    Per a signed agreement, Apple will also help defend Cupertino in administrative proceedings regarding its status as the point-of-sale location. The State will reveal the outcome of its audit in 4 to 6 months. 

    Learn What’s Next for the Lehigh Cement Plant and Quarry on Wednesday April 26

    On Wednesday, April 26, at 6:30 PM at Cupertino Community Hall and on Zoom, various oversight agencies will give updates on the Lehigh Cement Plant and Permanente Quarry, along with an opportunity to ask questions. This meeting will also be recorded. Sign up here. 
    Last week, the Santa Clara County Board of Supervisors unanimously approved two decisions regarding the Lehigh Cement Plant and Permanente Quarry: 
    1. The County will ask Lehigh to enter a legally-binding agreement to permanently close its kiln at the cement plant. Following an industrial accident in 2019, the Bay Area Air Quality District (BAAQMD) received a plethora of phone calls reporting excessive pollution from the cement plant. It ceased operations in 2020 and instead became a distribution center for imported cement. In 2022, a representative testified that Lehigh would not rebuild its cement kiln because it would be too expensive to comply with modern pollution regulations, but would continue manufacturing and distributing cement. 
    2. The County will create a policy framework guiding restoration and future development of portions of the 3,500-acre Lehigh site, in cooperation with the City of Cupertino. The only land that Lehigh can develop is in Cupertino. 

    Supervisor Simitian announced three goals: close the cement plant, stop mining the quarry, and begin restoration and reclamation of the property. In March, the Santa Clara Valley Water District Water Storage Exploratory Committee rejected the idea of turning the quarry into a lake for water storage. Instead, the County is awaiting a new proposal that would transform the quarry into a for-profit waste-rock landfill with an estimated 600 truck trips per day for 30 years. 

    READ MORE

  • Learn What’s Next for the Lehigh Cement Plant and Quarry on Wednesday April 26

    Learn What’s Next for the Lehigh Cement Plant and Quarry on Wednesday April 26

    On Wednesday, April 26, at 6:30 PM at Cupertino Community Hall and on Zoom, various oversight agencies will give updates on the Lehigh Cement Plant and Permanente Quarry, along with an opportunity to ask questions. This meeting will also be recorded. Sign up here.

    On April 18, the Santa Clara County Board of Supervisors unanimously approved two decisions regarding the Lehigh Cement plant:

    1. Santa Clara County will obtain a legally-binding commitment from Lehigh to not rebuild its cement kiln. Following an industrial accident in 2019, the kiln sputtered through to the beginning of 2020. During this time, the Bay Area Air Quality District (BAAQMD) received a plethora of phone calls reporting excessive pollution from the cement plant. The cement plant subsequently ceased operations and instead became a distribution center for imported cement. 
    The kiln, which is fueled by petroleum coke, incinerates locally-mined limestone and other imported materials to manufacture clinker. This portion of the cement-making operation creates the most air pollution. The clinker is ground in a mill, mixed with other materials, and stored in giant silos for distribution. 
    During a County meeting in November 2022, a Lehigh representative testified that the company would not rebuild its kiln because it would be too expensive to comply with modern pollution regulations but would retain its Conditional Use Permit in order to continue manufacturing and distributing cement.
    Lehigh Cement Plant
     2. The County will create a policy framework guiding restoration and future development of portions of the 3500-acre Lehigh site, in cooperation with the City of Cupertino. The only land that Lehigh can develop is in Cupertino. 
    Supervisor Simitian announced three goals: close the cement plant, stop mining the quarry, and begin restoration and reclamation of the property. The cement plant’s kiln and active mining shut down three years ago. 
    Reclamation, which is required to occur concurrently with mining is grossly overdue.
    The 2012 County-approved plan stipulates that mining-waste-rock piled upon over 300 acres would be placed in the quarry pit to protect water-quality and to shore up the crumbling ridgeline at Rancho San Antonio Open Space Preserve. 
    Instead, the County is awaiting a new proposal that would transform the quarry into a for-profit landfill for waste rock, with an estimated 600 truck trips per day for 30 years. In March, the Santa Clara Valley Water District Water Storage Exploratory Committee rejected the idea of turning the quarry into a lake for water storage. 
    To attend the Lehigh meeting in person or via zoom to learn about the organizations that are in charge of regulating the facility, click here. 

    Links:
    April 18 2023 Board of Supervisors items 20 and 21: http://sccgov.iqm2.com/Citizens/Detail_Meeting.aspx?ID=14890
    November 17 County Housing, Land Use, Environment, and Transportation Committee (HLUET) item 5: http://sccgov.iqm2.com/Citizens/FileOpen.aspx?Type=14&ID=13084&Inline=True
    March 29 2023 Santa Clara Valley Water District Water Storage Exploratory Committee item 5.2: https://s3.us-west-1.amazonaws.com/valleywater.org.us-west-1/s3fs-public/WSEC-Agenda-03292023.pdf

  • April 7, 2023 Email Newsletter: Shakespeare in the Park – To Be or Not To Be? – City Hall Renovation, and More

    April 7, 2023 Email Newsletter: Shakespeare in the Park – To Be or Not To Be? – City Hall Renovation, and More

    April 7, 2023 — Welcome to the Cupertino Facts newsletter! This resident-led publication is dedicated to ensuring that we have a safe, vibrant, honest and effective community. We stand for win-win situations.

    In this issue, we explore the following issues:

    1. Cupertino Shakespeare in the Park – To Be or Not To Be?

    2. Should Cupertino Spend $72M on a New City Hall?

    3. Cupertino’s Payments to a Politically-Driven Organization Raise Questions

    We have seen the rhetoric of doing good and doing well. Yet far too often, problems have accumulated, requiring much greater efforts to solve, following ever-increasing harms. These include financial accountability and the addressing of social problems. As well, we are at a point in time when public discourse is unfortunately dominated by the politics of attack. We are not interested in contributing to this problem. 

    What is the remedy? Communication is essential. We will dedicate both to setting forth good work, and communicating regarding this work. If we disagree, it must be on honest, principled differences.

    We must start with the commonly-accepted premises that the facts matter, and that we can address concerns while improving endeavors for all. We believe in the politics of efficacy, not the politics of accusation. We are there for you, and we will keep engaging and supporting the values of thoughtful, honest discussion.


    Cupertino Shakespeare in the Park – To Be or Not To Be?


    THE FACTS: Cupertino residents have enjoyed free Shakespeare in Memorial Park every summer since 1995. But at the April 4, 2023 City Council meeting, Toby Leavitt, Executive Director of the San Francisco Shakespeare Festival, made the dramatic announcement that Shakespeare in Memorial Park is at risk of being canceled this summer by the Cupertino Parks and Recreation Department. 


    Staff stated that they were experiencing “unexpected financial constraints affecting both staffing levels and their ability to host free Shakespeare in the Park this summer.” Leavitt asked for help in finding solutions to retain this program along with the many other beloved Cupertino community summer events.

    WHY THIS MATTERS: As resident Rhoda Fry explained at the Council meeting, Cupertino’s Q4 2022 and Q1 2023 sales and use tax revenue is significantly down from prior years. She is concerned that the City faces a “double whammy” with the decline in revenue, plus potential fallout from an impending tax audit of one of Cupertino’s largest sales-tax revenue sources. Meanwhile, our Council and Commissions are being asked to allocate funds for new projects.

    We won’t sugarcoat things – less tax revenue eventually impacts all residents, whether it’s cuts to community programs or capital improvements. Yet while the City looks to cut Shakespeare in the Park, Mayor Hung Wei and City Manager Pamela Wu will spend 10 days in Taiwan visiting sister cities. Wu confirmed that the expenses for this international trip will be paid for by Cupertino. It is customary for the Mayor to go on taxpayer-funded sister-city trips, and our students will certainly benefit from her insights. However, there is no record of a City Manager ever going on a sister-city trip. The cost of the trip has yet to be approved by the City Council.


    WHAT CAN WE DO? Residents believe it is important to find responsible solutions to address Cupertino’s financial situation. While official conversations are still underway, resident-proposed solutions include:

    • Increasing fiscal transparency in order to better evaluate Cupertino’s expenditures
    • Identifying opportunities to reduce city expenses.  For example, at the meeting Peggy Griffin recommended capping fee waivers, limiting trips to sister cities, and prioritizing community events that bring people together. 
    • In Griffin’s own words, “Let’s live within our means and reduce the impact to the City.”


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  • Cupertino Shakespeare in the Park – To Be or Not To Be?

    At the April 4, 2023 City Council meeting, Toby Leavitt, Executive Director of the San Francisco Shakespeare Festival, made the dramatic announcement that Shakespeare in Memorial Park is at risk of being canceled this summer by the Cupertino Parks and Recreation Department. On Thursday March 30, Parks staff let her know that they were experiencing “unexpected financial constraints that were affecting both their staffing levels and their ability to host free Shakespeare in the Park this summer.” Cupertino residents have enjoyed free Shakespeare in Memorial Park every summer since 1995. Leavitt asked for help in finding solutions to retain this program along with the many other beloved Cupertino community summer events. Her plea confirms the grave concerns that resident Peggy Griffin expressed at the City Council meeting on March 21: our City had received no sales tax deposits from the State in February.Resident Rhoda Fry followed Leavitt during Oral Communications and talked about the sales-tax shortfall, “zeroes just don’t happen.” Fry explained that Cupertino averaged $8M in the three previous Februarys. She was worried that the City is facing a “double whammy” with a catastrophic decline in sales-tax revenue along with the fallout from an impending tax audit of one of Cupertino’s largest sales-tax revenue sources. Although the City knew on February 21 that we had no money coming in, there was no notification in the intervening five Council meetings or two Audit Committee meetings. Meanwhile, our Council and Commissions have been asked to allocate funds for new projects.

    Peggy Griffin joined in via Zoom and said, “it is disappointing that the Audit Committee and the City Council were not told about this as soon as possible.” She recommended limiting fee waivers, suspending trips to sister cities, and prioritizing community events that bring people together. She concluded with, “Let’s live within our means and reduce the impact to the City.”

    Mayor Hung Wei and City Manager Wu have scheduled a sister-city trip to their native country of Taiwan that is to be paid with City funds. Cupertino has four sister and friendship cities in Taiwan, two in China, and one each in Japan, India, and Italy. It is customary for the Mayor to go on taxpayer-funded sister-city trips, and our students will certainly benefit from her insights. However, there is no record of a City Manager ever going on a sister-city trip. The cost of the trip has yet to be approved by the City Council.

    By the end of May, we will have the income numbers from the State for the second quarter. It is unknown as to when the City Council or the public will be apprised of the new economic situation and who will make the decisions about cutting programs.

    You can watch these speakers on YouTube below starting at 7:56:


  • Cupertino City Hall: Renovate for $28M or Build New for $72M?

    Structural Analysis Reports for our city hall confirm that the nearly 60-year-old structure does not meet current building standards; it needs to be retrofitted for seismic safety. City hall’s current configuration–with its main floor dominated by a room that hosted city council meetings before community hall was completed in the early 2000s–and outdated HVAC and IT infrastructure does not meet the needs of today’s mobile workforce that requires both collaborative and quiet workspaces, but can be anticipated to work remotely at least some of the time. Additionally, Cupertino’s Emergency Operations Center (EOC) must satisfy more stringent seismic safety requirements than those that apply to city hall. The City, understandably, prefers to locate the EOC in close proximity to city hall.


    Prior to 2/21/2023, Cupertino had acquired the property at 10455 Torre Ave (“City Hall Annex”), located across the street from city hall, with an eye to renovating the existing office building to accommodate the EOC and its robust seismic safety requirements. The plan for city hall and the EOC was to retrofit and renovate existing City-owned properties for an estimated cost of $28M.

    On 2/21/2023, a new Council majority of Mayor Hung Wei, Vice Mayor Sheila Mohan, and Council Member JR Fruen overruled Council Members Liang Chao and Kitty Moore and voted in favor of suspending all work on the City Hall Renovation plan, except the City Hall Annex project. Instead, the Council majority directed staff to prepare options for a new city hall building of approximately 80,000 square feet to include a flexible event space with hosting capacity of up to 500 people. ($72M estimated new construction cost as reported in the FY 23-24 Capital Improvement Program 5 Year Plan.)

    Does Cupertino need its own 500-person capacity event space? In 2022, Cupertino and the Santa Clara County Library District added 2-floors of programming space at the Cupertino Library (100-person event capacity). Cupertino Community Hall can accommodate 170 people. A mile from City Hall, De Anza College has the 400-person Visual and Performing Arts Center and a college district board that considers re-build options for its now closed 2,400-person Flint Center Theater. Across the street from De Anza College at Quinlan Center, the Cupertino Room seats up to 280 people. Additionally, there are numerous 400+ seating capacity venues located throughout the South Bay and Peninsula.

    Cupertino forecasts revenue of $130M for FY 2023, operating expenditures of $127M, and capital expenditures of approximately $4M, for a projected deficit of $343,000. Where would funds for a multi-year city hall renovation or build new project come from? We could look to Sunnyvale as a guide. Earlier this year, Sunnyvale announced the near completion of Phase I of its multi-phase civic center renovation. According to San José Spotlight, the first phase will cost $315M and will be funded by over $130M in bonds—bonds that will incur interest of $100M that will be paid by the City of Sunnyvale (its residents) until 2052. Remaining sources of funding include the sale of surplus property, city development fees, and unnamed “other sources.” How much money and debt obligation do we, Cupertino voters and taxpayers, want to dedicate to a city hall development project? What projects wait or will not get built if the City moves forward with a new $72M city hall, especially when a renovation project costing less than half of new construction brings the safe and modern facilities that the City needs?

    Finally, we must consider the environmental benefits of renovating the existing city hall over building new. Blueprint for Better, a climate action campaign supported by the American Institute of Architects offers this support for renovation of existing buildings whenever possible: 

    “… Renovating buildings dramatically reduces embodied carbon, which is the carbon emitted during new construction by the manufacture, transport, and assembly of materials. As a result, architects can renovate existing buildings to reduce their operational carbon to zero, lessening their contribution to climate change.

    ‘If you renovate and reuse the biggest parts of existing buildings—typically the structure and foundation—you can save 50 percent of your carbon on a project right off the bat,’ says Larry Strain, FAIA, a principal at Siegel & Strain Architects in Emeryville, California. ‘It’s the first thing all architects and owners should try to do.’”


    Learn More

    City of Cupertino, Capital Improvement Program Dashboard: https://gis.cupertino.org/webmap/cip/

    City of Cupertino, City Hall Project: https://www.cupertino.org/our-city/departments/public-works/capital-improvement-program-projects/city-hall-project

    “Budget at a Glance: Fiscal Year 2022-2023”, Cupertino Scene, October 2022: https://www.cupertino.org/visitors/cupertino-scene

    Santa Clara County Library District Meeting Rooms: https://sccld.org/book-a-room/

     “Sunnyvale Gets Sleek New City Hall” by Joseph Geha, San José Spotlight, 1/23/2023: https://sanjosespotlight.com/sunnyvale-gets-sleek-new-city-hall/

    American Institute of Architects, Blueprint for Better campaign, “Renovating Buildings to Protect the Climate and Rejuvenate Communities”: https://blueprintforbetter.org/articles/renovating-buildings-to-protect-the-climate-and-rejuvenate-communities/

    “To Build or Not to Build? Architects Struggle with the Future of Their Craft in a Warming World” by Frances Anderton, Sierra: the Magazine of the Sierra Club, 12/16/2021: https://www.sierraclub.org/sierra/2021-6-winter/feature/build-or-not-build