The January 17, 2024 City Council meeting to discuss potential budget cuts (“Service-Level Reductions (SLRs)”) revealed a bloated budget and long-standing accounting errors. Remarkably, over $2.2M of the proposed Service Level Reductions were actually just accounting adjustments. These changes are now being presented as “Potential Service Level Reductions,” when there are no associated service reductions.
Council did advise on a few service reductions that may impact residents: Sidewalk and tree maintenance may now be the responsibility of the property owner. Community events, including concerts, movies, and festivals, will also have reduced funding. There were no significant staffing reductions or cutbacks for City employees.
Cupertino, We Can Do Better: Register to Vote and Vote Regularly
The Santa Clara County Registrar of Voters commits to sending vote-by-mail ballots for the March 5, 2024 Presidential Primary Election to all county voters no later than Monday, February 5.
In Cupertino, approximately 73% of all adult residents are registered to vote. Of the 73% registered, only 60% cast ballots in the November 2022 General Election. Cupertino had a better showing for the November 2020 Presidential Election, with 88% of registered voters returning ballots. However, relative to several nearby communities, Cupertino residents are registered to vote at much lower rates.
Find out more about the upcoming March 2024 Primary Election, and why you should vote.
On January 10, 2024, Cupertino settled a lawsuit filed by California Housing Defense Fund and Yes In My Back Yard (YIMBY) for missing its state-mandated Housing Element deadline. According to YIMBY Law, whose slogan includes “Sue the Suburbs,” about a dozen Bay Area jurisdictions have been sued for missing their housing-element deadlines, including Palo Alto, Burlingame, and the County of Santa Clara. Their complaint against Palo Alto drew the ire of residents who commented that the lawsuit is a scam used to raise money by organizations that are “backed by investment firms, developers and real estate lobbies.”
Read more about what the lawsuit’s settlement means for Cupertino.
On January 10, 2024, Cupertino settled a lawsuit filed by California Housing Defense Fund and Yes In My Back Yard (YIMBY) for missing its state-mandated Housing Element deadline. According to YIMBY Law, whose slogan includes “Sue the Suburbs,” about a dozen Bay Area jurisdictions have been sued for missing their housing-element deadlines, including Palo Alto, Burlingame, and the County of Santa Clara.
YIMBY Law claims that nearly half of Bay Area cities remain out of compliance. Their complaint against Palo Alto drew the ire of residents who commented that the lawsuit is a scam used to raise money by organizations that are “backed by investment firms, developers and real estate lobbies.”
Total Cost Unknown
To settle the lawsuit, Cupertino paid YIMBY Law and California Housing Defense Fund, $6,000 and $9,000 respectively. The cities of Cupertino, Palo Alto and Burlingame also hired the law firm Goldfarb & Lipman for their defense. Cupertino has paid its contract attorney tens of thousands of dollars in 2023, but it is unknown as to how much was spent on this lawsuit because the City uses the firm for other housing-related issues. Santa Clara County appears to have used its in-house counsel to defend itself from a similar lawsuit filed by Californians for Homeownership, an organization that is “financed and controlled by the California Association of Realtors.”1
Environmental Consequences
As part of the settlement with YIMBY Law and CalHDF, Cupertino agreed to exempt its entire Housing Element from the California Environmental Quality Act (“CEQA”). This saves time and expedites development projects, but silences the public’s environmental concerns.
In spite of the financial and environmental costs to the City, Vice Mayor J.R. Fruen, who has been endorsed by YIMBY organizations and represented them in legal cases, was positive about the lawsuit. Via the Mercury News, Fruen stated, “the city is right to welcome the result.”
Via San José Spotlight, Councilmember Kitty Moore countered “CEQA involves the public with public disclosure of environmental impacts to mitigate those impacts as possible, and to ultimately keep workers and residents informed and safe.” According to the New York Times, due to semiconductor manufacturing, “Santa Clara County is riddled with 23 toxic Superfund sites, more than any county in the country.” Notably, Councilmember Moore, who uncovered toxic waste at the former Vallco site, championed to have the site remediated in order to protect human health. Her actions spurred the County Department of Environmental Health to force a cleanup.
Moore emphasized, “This exemption from CEQA is not a win for anyone.”
Sources:
1 – Public Portal Superior Court of California, County of Santa Clara https://traffic.scscourt.org/ (case numbers 23CV410811, 23CV410817, 23CV410822)
The January 17, 2024 City Council meeting to discuss potential budget cuts (“Service-Level Reductions (SLRs)”) revealed a bloated budget, long-standing accounting errors, and further confirmed out-of-control spending. There were no significant staffing reductions or cutbacks for City employees.
A Closer Look at Service Level Reductions
Remarkably, over $2.2M of the proposed Service Level Reductions were actually just accounting adjustments. For example, Councilmember Kitty Moore expressed concern over calling a $160,000 reduction in extra library hours a “service level reduction”. The City has not had to pay for extra Library hours for years, as the costs are funded by the County. Other changes to the Sheriff’s Office, Public Works, and City Attorney budget were also accounting adjustments to “align the budget with the actual hours provided.” These changes are now being presented to the community as “Potential Service Level Reductions,” when there are actually no associated service level reductions.
Council did advise on a few service reductions that may impact residents: Sidewalk and tree maintenance may now be the responsibility of the property owner. Community events, such as concerts, movies, and festivals, will also have reduced funding (most notably, the elimination of July 4th fireworks in 2024). And the Cupertino Scene will now be mailed quarterly instead of monthly.
While Cupertino attempts to cut costs, its proposed changes to employee headcount remain insubstantial. The latest budget report states that the city plans to eliminate only “3-4 vacant positions annually” over the next decade, “until the City reaches a staffing level of 180 positions, which is consistent with the levels in FY 2015-16”. The January 17th proposed service level reductions included elimination of an undisclosed number of part-time roles, for an undisclosed amount of savings. As of September 2023, the city had 195 full-time equivalent employees. Most notably, in the past five years, the budgeted headcount for Administration and Administrative Services ballooned from 30 to 40 employees.1 Meanwhile, as the City struggles with its finances, its finance head was paid nearly $300K in 2022.2
Questionable Budget Reduction Target
Currently, Cupertino has a $10M financial deficit. During the January 17th City Council Meeting, Councilmember Moore questioned why staff was attempting to make $15M in expenditure reductions or revenue generation efforts. Moore noted that the $15M financial deficit was anchored to a 2033 forecast, 10 years in the future, while for the next 4 years, the deficit was only anticipated to hover around $10M.
A Need for Greater Fiscal Accountability
Once again, City Council met behind closed doors on January 29, 2024 to discuss its appeal to the California Department of Tax and Fee Administration (CDTFA). As previously reported, the CDTFA has questioned whether Apple should direct all California online sales tax revenues to Cupertino. This lucrative arrangement accounts for about 63% of Cupertino’s sales tax revenue. The potential loss of this revenue, and repayment dating back to mid-2021, has shined a spotlight on Cupertino’s budgeting practices.
Meanwhile, last November, Staff acknowledged that it had stockpiled over $80M in unassigned funds. Currently, the unassigned fund balance sits at $47M, with an additional $56M set aside as a sales tax repayment reserve for Apple. Cupertino also has $149M sitting in an investment account with Chandler Asset Management.4 This begs the question of whether raising taxes, eliminating community services, or partnering with developers to turn City-owned land into housing, such as the Sports Center, is the appropriate course of action.
Particularly when it comes to evaluating the use of public funds, the role of our publicly-elected representatives is to make decisions based upon what is good for the community. Meanwhile, the current majority of Councilmembers Wei, Fruen, and Mohan have actively discouraged other Councilmembers, such as Moore, who spends her time on the dais pushing for transparency and accuracy regarding Cupertino’s true financial situation, and highlighting accounting errors.
Now, as Council considers tax increases and elimination of resident services, it is imperative that it makes decisions with a long-term community benefit, rather than simply rubber-stamping staff recommendations. And without true fiscal accountability, it is unclear whether residents will support a sales tax hike that is expected to be on November’s election ballot.
References
1 – Staffing Report. City of Cupertino’s Financial Reporting Platform. (n.d.). https://cupertino.opengov.com/transparency/#/33189/accountType=fteCount&embed=n&breakdown=28459e6a-563e-4695-97d4-8a0d97d881e1¤tYearAmount=cumulative¤tYearPeriod=years&graph=bar&legendSort=desc&proration=true&saved_view=103397&selection=3B47265EDAEBBD4AA92D700FE18A69B7&projections=null&projectionType=null&highlighting=null&highlightingVariance=null&year=2024&selectedDataSetInddex=null&fiscal_start=earliest&fiscal_end=latest. Accessed January 29, 2024.
4. FY 2023-24 Adopted Budget. City of Cupertino. (6 June 2023). https://apps.cupertino.org/pdf/FY_2023-24_Adopted_Budget.pdf. Accessed January 29, 2024.
In a recent article published in The.Ink, Anand Giridharadas interviews Daniel Ziblatt, a scholar and co-author (with Steven Levitsky) How Democracies Die (2018) and Tyranny of the Minority (2023). The interview is thoughtful and worth the read, but the salient point is addressed in the headline, “Want to Save Democracy? Watch Less Cable News; Attend More Town Meetings”. 1
One to add to the Strengthen Democracy To Do list: vote regularly.
Why should Cupertino residents vote?
In Cupertino, approximately 73% of all adult residents are registered to vote. Of the 73% registered to vote, only 60% cast ballots in the November 2022 General Election. Cupertino had a better showing for the November 2020 Presidential Election, with 88% of registered voters returning ballots. However, relative to several nearby communities, Cupertino residents are registered to vote at much lower rates. Residents of Campbell, Gilroy, Palo Alto, Los Altos, Morgan Hill, Saratoga, and others have better voter registration rates than Cupertino.
When we choose not to vote, we lose our voices. In 2024, the rest of Cupertino joins the small sliver of the city that is part of California Senate District 13. CA SD-13 is centered in San Mateo County, where 84% of eligible adults were registered to vote for the November 2022 General Election.2 As Cupertino joins CA SD-13, we participate at a reduced capacity when our residents cannot be counted on to deliver votes or other campaign support for candidates on par with other CA SD-13 communities.3
Your vote makes a difference!
In 2018, 45 votes separated two candidates in Cupertino with very different political platforms and bases of support: one was elected to Council and the other was not. In 2022, the race for the Sunnyvale District 3 Council Member seat was decided by a draw by the County Registrar of Voters after two recounts confirmed a tie between the two candidates.
When we vote, we support democracy by ensuring that the winning candidates or measures are the ones with the broadest possible support. When voters sit out an election, we risk the total number of “non-voting” registered voters will be greater than the actual votes received by winning candidates, especially for local elections that do not have a primary.
March 5, 2024 Primary Presidential Election
The Santa Clara County Registrar of Voters commits to sending vote-by-mail ballots for the March 5, 2024 Presidential Primary Election to all county voters no later than Monday, February 5.
The March 5, 2024 election includes:4
Proposition 1, added by the Legislature, that if passed would “[Authorize] $6.38 Billion in bonds to build mental health treatment facilities for those with mental health and substance abuse challenges, [provide] housing for the homeless”
Primary voting for:
US President
US Senator
US Congressional Representative
State Senator (odd numbered districts)
Member of the Assembly, including AD-26
Judgeships and County Central Committees
If you or someone close to you are eligible to vote, but not yet registered to vote, the last day to register to vote in the March 5, 2024 election is Tuesday, February 20, 2024 (postmarked registration or electronic submission). You may also register on election day by completing a form at a polling location; however, your vote will not be counted until your information is verified.
Not sure if you are registered to vote? Check your registration status, including the name you are registered under, here. You can also sign up to receive notifications from the Registrar of Voters when your completed ballot is returned.
Take steps in 2024 to strengthen democracy in our community. Step away from the screen and step forward to in-person, community meetings whenever possible. Register to vote or investigate options to become eligible for US citizenship. If already registered to vote, learn about candidates and ballot measures and take time to vote!
References
1 – “Want to Save Democracy? Watch Less Cable News; Attend More Town Meetings,” by Anand Giridharadas, The.Ink, 1/11/2024: https://the.ink/p/want-to-save-democracy-watch-less
2 – “Report of Registration as of October 24, 2022, Registration by County,” Office of the California Secretary of State, accessed 1/24/2024: https://www.sos.ca.gov/elections/report-registration/15day-general-2022
3 – “Final Maps Report,” We Draw the Lines, 12/26/2021: https://wedrawthelines.ca.gov/final-maps/final-maps-report/
4 – “March 5, 2024 Presidential Primary Election, List of Offices.” County of Santa Clara, accessed 1/24/2024: https://files.santaclaracounty.gov/2023-10/list-of-offices-03.05.pdf
