CUPERTINO FACTS

Blog

  • May 13th Newsletter: Cupertino’s Resources Spent Scrutinizing a Prior Council’s Actions, and the Latest Budget Updates

     

    This month, we continue the ongoing coverage of Cupertino’s budget shortfall. This is a critical time as the City evaluates where to cut expenses, from community services to road maintenance. Your input is key – details below.


    But as Cupertino’s financial situation worsens, several Council Members have instead chosen to prioritize their time (and public resources) scrutinizing the actions of a former City Council. 

     

    While the role of a Council Member varies by city, according to the National League of Cities, “Councilmembers are responsible for and responsive to the citizens who elected them.” 

     

    And so, we ask: What are our needs, as Cupertino citizens? Are the priorities of each Council Member aligned with them?
     

    Cupertino Budget Shortfall News and Upcoming Meetings

    Once again, Bloomberg news had the scoop on Cupertino’s budget woes prior to announcements by the City. Their first article explains how Cupertino is at risk of losing its share of tax revenue from online sales of Apple products in California. Their latest article announces that Cupertino plans to appeal the change, and that Apple must fund the cost of the appeal. 
    Cupertino Apple Store

    The State audit can go as far back as the second quarter of 2021, which implies that Cupertino could owe the State up to approximately $40M in sales tax revenue. This is far above the anticipated 30% drop in overall City revenue. 


    In spite of City Staff’s knowledge of this audit and its consequences since December 2021, there were no proposals to reduce or eliminate expenditures until 2023. For example, although our City’s cost for the Jollyman playground has nearly doubled, on May 2, 2023, its budget was again increased by 16%. Including grants, the new playground is pegged at nearly $5M. The new City budget, published on May 5, includes expensive studies for new projects that are unlikely to come to fruition given our budget outlook.
     
    Here’s how you can participate in the budget decisions, and share input on which Cupertino services to keep or cut:

     

    1. Take the 2023 Community Budget Survey by May 16. Although the survey is open until May 31, survey results will be presented on May 17th.

    • The survey includes a question about selling assets. These are assets purchased through prior ballot tax measures:
    • Water rights, which were purchased through a bond measure in 1960, to San Jose Water, a subsidiary of a publicly-traded company
    • Blackberry Farm Golf Course, which was purchased to preserve as open space through a bond measure funded by the Utility Users Tax (UUT) in 1990
    • At the end of the survey, you can provide written comments. Draft your own response to express budget concerns or priorities that are not addressed elsewhere in the survey.

    2. Write to City Council as follows:
        TO: citycouncil@cupertino.org, cityclerk@cupertino.org
        SUBJECT: City Council 5/17/2023, Written Communication, City Budget, Agenda Item 1

    3. Meet with your City Council members

    4. Attend the May 17 City Budget Meeting in-person or via zoom at 5PM. 

    5. Attend the May 18 Budget Town Hall Meeting in-person or via zoom at 6:30PM 

    6. Sign up to receive meeting reminders at the City website 
     

    Civil Grand Jury Case Consumes Public Resources Scrutinizing Prior Council’s Actions

    BACKGROUND: From 2018-2022, resident-focused Council Members held a 4-1 majority in Cupertino, ensuring that our local government served the needs and interests of residents first. These Council Members pushed back against those who came to Cupertino intent on maximizing profit with little regard for how their actions impact the people who live here.


    During 2018-2022, the Council worked with City staff to accomplish significant achievements for the benefit of Cupertino residents, including:

    Despite efforts to elect 3 resident-focused Council Members in 2022, campaigns backing financial interest candidates were significantly better-funded. Council Member Liang Chao was re-elected, but financial interest candidates prevailed in 2022 and, for now, hold a 3-2 Council majority in Cupertino.


    Resident-focused Council Members Liang Chao and Kitty Moore continue to work hard to advocate for fiscal accountability, transparency, environmental protection, sensible development, and improved transit and City services for residents. They continue these efforts in spite of a work environment made hostile by a Council majority that resents sharing the dais with Council members whose legislative priorities and support base differs from their own. Unlike today’s Council majority, Council Members Chao and Moore neither sought nor received campaign support from financial interests: not from real estate interests, corporations, nor labor unions.


    CIVIL GRAND JURY REPORT: In 2022, an anonymous individual submitted a complaint to the Civil Grand Jury, Santa Clara County alleging that resident-focused Council Members asked too many questions, wrote too many email messages to staff, made certain staff members “feel threatened”–not to be confused with  threatening staff, which they did not do–, and filed public records requests (a right protected by State Law for all persons, including elected officials, under Code § 7921).


    MAY 9TH CITY COUNCIL RESPONSE: Council Member Chao questioned which specific Cupertino Municipal Codes she allegedly violated. None were cited by number in either the Civil Grand Jury Report or the City-funded investigation summary. She also cited specific Municipal Code sections which did appear to codify the right of Council Members to ask questions of staff. The City Attorney did not answer Chao’s question. Instead, he asserted that the problem rested with her perceived “volume and tone of voice,” presumably when engaging with staff.


    Then, Council Member Fruen initiated a motion to remove Council Members Moore and Chao from their committee assignments. The motion was approved by Mayor Wei and Vice Mayor Mohan.


    It is questionable whether 3 Council Members will adequately represent Cupertino residents on the many City, district, County, and regional boards and committees without Council Members Moore and Chao. 


    In 4-5 months, Council will revisit the Civil Grand Jury report and reconsider the political consequences the Council majority has imposed on their colleagues. What will have changed?

    For further detail:

  • Civil Grand Jury Case Consumes Public Resources Scrutinizing Prior Council’s Actions

    From 2018-2022, resident-focused Council Members held a 4-1 majority in Cupertino, ensuring that our local government served the needs and interests of residents first. These Council Members pushed back against those who came to Cupertino intent on maximizing profit with little regard for how their actions impact the people who live here.

    During 2018-2022, the Council worked with City staff to accomplish significant achievements for the benefit of Cupertino residents, including:

    Despite efforts to elect 3 resident-focused Council Members in 2022, campaigns backing financial interest candidates were significantly better funded. Council Member Liang Chao was re-elected, but financial interest candidates prevailed in 2022 and, for now, hold a 3-2 Council majority in Cupertino.

    Resident-focused Council Members Liang Chao and Kitty Moore continue to work hard to advocate for fiscal accountability, transparency, environmental protection, sensible development, and improved transit and City services for residents. They continue these efforts in spite of a work environment made hostile by a Mayor and majority Council who resent sharing the dais with Council members whose legislative priorities and base of support differ from their own. Unlike today’s Council majority, Council Members Chao and Moore neither sought nor received campaign support from financial interests: not from real estate interests, corporations, nor labor unions.

    In 2022, an anonymous individual submitted a complaint to the Civil Grand Jury, Santa Clara County alleging that resident-focused Council Members asked too many questions, wrote too many email messages to staff, made certain staff members “feel threatened”–not to be confused with  threatening staff, which they did not do–, and filed public records requests (a right that is protected by State Law for all persons, including elected officials, under Government Code § 7921).

    Here is the timeline of events that have followed since the complaint was filed, as summarized in the City Attorney’s presentation delivered to Council on 5/9/2023:

    Dec. 19 – Santa Clara County Civil Grand Jury Report released

    Feb. 21 – City Council approves response to Grand Jury Report and directs [the Office of the City Attorney] to conduct investigation

    May 2 – City Council votes to waive privilege over independent investigation report

    May 9 – Public discussion of investigation report

    On 5/9/2023, Council Members Moore and Chao read statements and recused themselves before Council deliberations began, identifying in their comments why they would not participate in a process that exposed them to possible financial and legal consequences. Under the Civil Grand Jury procedure, those accused can neither face their accusers nor review the evidence that the Civil Grand Jury considered to render its decision.

    Council Member Chao also questioned the attorneys present about which Cupertino Municipal Codes specifically that she allegedly violated, as none were cited by section number in either the Civil Grand Jury Report nor in the City-funded investigation summary, the Fact Finding Report. The City Attorney either could not or chose not to answer Council Member Chao’s question directly. Instead, he asserted that the problem rested with the accused Council Members’ perceived “volume and tone of voice,” presumably when asking questions or engaging with staff.

    Council Member Chao cited specific Municipal Code sections which did appear to codify the right of Council Members to ask questions of staff. The Municipal Code also appears to protect staff from overtly burdensome requests from individual Council Members, directing staff to refer the Council Member to the City Manager if questions were to require significant research or communication time. Regrettably, the exchange with the City Attorney resolved with the City Attorney accusing Council Member Chao of “distorting the Municipal Code,” and Council Member Chao asserting that she still does not know which sections of the Municipal Code she is alleged to have violated as none are cited by number in the reports.

    Then, the special interest council majority led by Council Member Fruen voted to remove Council Members Moore and Chao from their committee assignments. 

    It is questionable whether 3 Council Members will adequately represent Cupertino residents on the many City, district, County, and regional boards and committees without assistance from Council Members Moore and Chao. 

    In 4 or 5 months, Council will again revisit the Civil Grand Jury report and reconsider the political consequences the Council majority has imposed on their colleagues. What will have changed?

    For further detail:

  • Public comment, 5/9 meeting: former Cupertino Mayor Darcy Paul

    Public comment, 5/9 meeting: former Cupertino Mayor Darcy Paul

     

  • Statement of recusal, 5/9/23 meeting: Council Member Moore

    Statement of recusal, 5/9/23 meeting: Council Member Moore

     

  • Statement of recusal, 5/9/23 meeting: Council Member Chao

    Statement of recusal, 5/9/23 meeting: Council Member Chao

     

  • 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.”


    (more…)

  • 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: