Thursday, May 1, 2014

Unabridged Argument Against Measure C

By now registered voters should have received their official Voter Information Pamphlet in the mail. It contains the argument I authored against Measure C. I'm somewhat surprised by this because an argument submitted by an individual voter, like myself, gets superseded by any submitted by an organized group or a governing authority. Apparently though, I was the only one who made an effort to challenge the measure; so mine are the words you'll read.

To make the argument, I repeatedly used questions as my rhetorical device. I did so believing that readers contemplating these questions would more strongly convince themselves of the absurdity of it all than I could with specific statements, given the 300-word limitation.

But now not being restricted to the number of words I can post, I figured I'd offer some additional thoughts congruent to those previous. The bold text below is that of my original argument printed in the pamphlet. The italicized words are my added thoughts. Feel free to include your own in the comment section that follows.

Why does the City believe it’s entitled to greater relief from the effects of the recession and future inflationary costs than its residents and businesses?

This single question could have been the extent of the argument, since I honestly couldn't conceive of a justifiable answer myself. After all, everyone faced hardships and cutbacks during the recession. Just as we're all now facing rising costs as the economy improves. What makes the City so special that it should be rewarded with bonus income for the next 20-years?

Having since heard our incumbent candidates speak in support of the tax, it appears that their agreed upon answer is this: the City is deserving because it has managed its finances responsibly while the state has robbed it blind. They repeat this so often; they've apparently convinced themselves it's true. But they haven't convinced me.

Yes, two decades ago, the state altered the traditional allocation of property tax revenue to include a shift of funding away from local governments and toward local schools. For the City, this essentially resulted in a permanent loss of several million dollars per year. While certainly unfortunate, undesirable, and not entirely inconsequential, it's not the source of the City's current woes. After more than 20-years, this overused excuse has become a bit long in the tooth. We've since approved Measure A which offsets the annual loss by several fold. And we've also approved Proposition 1A (2004) and Proposition 22 (2010) to protect city funds. 

The candidates also point to the State's dissolution of local redevelopment agencies as another source of the City's financial woes. The problem with this argument is that redevelopment money was never city money in the first place. The State granted cities an extra portion of property taxes collected in a particular project area to use in a very specific way. This investment by the State was to reverse urban blight, which would presumably lead to increased property values, thereby raising future property tax revenue. Some cities were apparently misusing program funds, and the program's overall effectiveness was called into question. In 2012, all redevelopment agencies were dissolved. While this too was unfortunate, undesirable, and not entirely inconsequential, it's also not the reason for the City's current budgetary concerns.

The current concerns are the direct result of an unfortunate misstep made by Hayward (and many other cities) when employee pension plans were greatly sweetened back in 2002. Now, as the saying goes, the chickens have come home to roost. The floundering Public Employees Retirement System has been requiring greater and greater contributions to remain solvent. As a consequence, the City is now predicting significant budget deficits in future years.

In 10-years the deficit may be as high as $23-million, according to a Measure C editorial published by the Oakland Tribune/Daily Review. The problem, as the editorial points out, is that the promises made by the City for how it will spend Measure C money do nothing to address any deficit. In fact, if you think it through, fulfilling the Measure C promises will actually exacerbate the situation. The editorial warns that the City may be employing a bait-and-switch tactic. While the editor apparently understands how illogical it is to approve this measure, the publication inexplicably supports it anyway. Go figure.

Why does the City contend that it has over half-a-billion dollars in unmet capital needsyet provides no reference to any document supporting this incredible claim? 

Because any organization seeking additional revenue will typically exaggerate its need. But it's rather incredible that any would do so by hundreds of millions of dollars beyond its own published documents. Then again, if no one of authority questions it, why not shoot for the moon?

Why does the City’s Capital Improvement Program list unfunded capital projects valued at $325M of which more than half this amount can be attributed to Caltrans interchange projects traditionally funded by federal, state, and regional sources?

Because if you're going to exaggerate a need for funds, there are few better projects to claim as your own than hugely expensive CalTrans projects, including...

  • I-880/Industrial Parkway Interchange  $43M
  • I-880/West A St Interchange  $27M
  • I-880/Whipple Rd Interchange  $13.5M
  • I-880/Winton Ave  $25M
  • Rt 92/Clawiter/Whitesell Interchange  $52M
  • Rt 92/Industrial Blvd Interchange  $6M

(Incidentally, most of these projects are also being sited by the County Transportation Commission as justification for another 1/2-percent sales tax measure in November, which the Council also unanimously supports.)

Why is the City proposing a $60M library that is 50-percent more costly than even the most expensive new Bay Area library built within the past decade?

Because the proposal is based on the unbridled wishes of passionate library enthusiasts. And, of course, this grand plan is embraced by staff who are understandably eager to work in a new facility that would rival and exceed those of even the most wealthy Bay Area communities.

How will the City afford to stock, staff, and otherwise operate this proposed three story facility that would be more than twice the size of the existing?

If the City is honest and accurate with its projections of increasing pension liabilities and resulting future deficits, it will not be able to afford it without yet another increase in taxes. Never-the-less, like many public boondoggles, proponents believe "if we build it, they will fund"--betting on the notion that if so much money is committed to construction and financing, a future commitment of additional operating funds will have to materialize. Perhaps it will someday. But if we're to take a lesson from the City of San Jose, we best not hold our breath while waiting. 

Why does the City believe that it’s managing its finances responsibly when the 20-highest compensated city employees in 2012 each received a quarter-of-a-million dollars or more in salary and benefits? Or when the top six received more than $300,000 in compensation—nearly six times Hayward’s median household income?

While everyone who lives, works and generally survives at the mercy of competitive free-market forces recognizes that this level of compensation is excessive, the City only compares itself to other local public organizations where such pay is not entirely unusual. Consequently, the City deems this to be perfectly responsible management. Never-mind the fact that many of these organizations are facing fiscal calamity.

Why hasn’t the city’s existing supplemental taxes (the emergency facilities tax and the 5.5-percent utility tax) accomplished what they were intended to do?

Because according to a 2012/13 Alameda County Grand Jury investigation, the City allocates the entirety of the Emergency Facilities Tax revenue toward paying down the construction debt on City Hall and the downtown Fire Station No. 1. This then leaves nothing for addressing current concerns at any other critical facilities. The grand jury determined this to be acceptable, since the emergency facilities tax is a general fund source that can be spent any way the City sees fit. Likewise, the utility tax is also a general fund source, so its revenue can be expended in any manner as well. And yes, Measure C would also be a general fund source.

These taxes for general discretionary spending always begin with the promise of addressing emergency/protection/safety issues, yet they always seem to fall short on delivery. See the pattern? Perpetuating public fear is an effective strategy for seeking additional future revenue.

Why is the City not concerned by the burden that this unprecedented combination of taxes will have on Hayward’s residents and businesses?

Because apparently City leaders don't feel personally burdened by these taxes. It then stands to reason that they can't appreciate why anyone else would.

Why is the City not concerned that this measure in combination with the possible augmentation of the county transportation sales tax will set Hayward’s sales tax rate at an even 10-percent?

Because even after climbing to what is currently the highest sales tax rate in the state, City leaders are confident that a handsome new library building will attract new business and more shoppers to Hayward.

Why does the City believe that its residents and businesses are an endless source of revenue?

Because we have historically shown that we are willing to be so by way of our collective apathy and acceptance.

In fact, if you oppose this tax, it is not merely enough to plan on voting no. You need to commit to ensuring that every Hayward voter you know votes no as well. Because if I'm the only one making the effort, then we're all going to be paying unnecessarily higher taxes in the future.


Because the City has analyzed it, strategized it, and figures it can.  Don't let it.

Vote No on Measure C


  1. Wow! Thank you for your research and willingness to stand apart from the crowd to educate people. Not many would volunteer to take the time and effort. We are lucky to have you as our neighbor. I can only hope that our local newspaper will present the issue as well as you have. I hope you have sent them a copy.
    I have been listening to people's arguments in favor of measure C. No one seems to have thought it through as well as you have. Yet people seem to be rushing to agree with whatever the in-crowd wants. Unfortunately. I see no end to our fiscal problems this way. Instead of paying outside consultants to figure out how to persuade us to vote for this tax, the city should have paid someone to figure out how to make our budget work...oh, I guess they are already paid to do that, aren't they?

    1. Thank you for your kind words Sherry.

      If you’re referring to the Daily Review as our local newspaper, the publisher is aware of this blog and my point-of-view.

      However, there appears to be something strange going on with the Daily Review and this sales tax issue.

      In my narrative above, I mention the irrational recommendation of its editorial in which it argues that the City is facing huge future deficits, that the City’s Measure C promises do nothing to alleviate these deficits, and that the City is possibly employing an immoral bait-and-switch tactic. But what’s further strange is this: the editorial in its Internet form is posted under the Oakland Tribune masthead with the headline “Hayward voters should approve Measure C, but watch carefully how the money is spent.” In the printed version under the Daily Review masthead, the very same editorial has the headline “Hayward voters must approve tax.” These headlines convey two different sentiments in my opinion--the first being unassertive, the second being demanding.

      On the same day I posted my article above, the Daily Review posted an article on Measure C to its webpage, Inside Bay Area.

      The article quotes me a couple of times, but provides no reference to the blog. I commented on the website article (adhering to the site’s posted guidelines), but my words were deleted. If you visit the article you’ll see the deleted comment box just above another reader’s comment who had responded agreeably to mine. You can find this at the bottom of the page, below some obnoxious campaign graphics supporting the measure, which apparently the paper finds acceptable.

      Perhaps I’m biased Sherry, but I don’t think our local newspaper is being entirely impartial here.

  2. Your statement about library staff supporting Measure C is a generalization which I would challenge.

  3. I would also like to mention the two college libraries that are available in Hayward. I suspect these libraries negate the need for a very large library. What we need is a library for children and general knowledge books and for school research since the school district does not have much in libraries anymore. But, as an adult, if you want real research including journals, Hayward library is not the place to go. Perhaps the library should just make a deal with the schools and set up something similar to the county libraries and share cards.

  4. You could also mention the utility tax we already pay that was for firehouse upgrades, etc. how has that money been used? They have a systemic problem of not getting businesses into Hayward because it is difficult to work with the city. So instead of fixing the problem, they ask us to pay more in taxes to fund their mismanagement. They will have to borrow the money to build this library which creates a long term expenditure. Yes, upgrade and re beautify the existing library. The rest is typical Hayward over reach and under planning.

  5. When I lived in Hayward off Foothill up towards Castro Valley, there was a measure similar to this but on a ballot to extend the 580 freeway coming out of Oakland and San Leandro that "emptied onto Foothill Blvd." to expand it...meaning into Hayward, like a second deck or something all the way to 92/880, or something like that. Voters passed it. In the years following nothing happened. It was I believe it was a sales tax increase now that I think about it. But, nothing ever was built. Maybe if someone in Hayward, I know live 3000 miles away, looked up that measure (maybe H?--uggh been years) and showed the voters that here is a measure that passed and nothing was built and use that as the carrot to show the history of passing a measure for the benefit only of the city coffers.

    1. The freeway proposal was scrapped. Foothill Blvd and Mission Blvd were reconfigured instead. The result is what’s known as the “Hayward Loop,” a convoluted layout of one-way streets through Hayward’s downtown.

      If interested, you can learn more by visiting the web address below:

  6. We don't need a new library to keep up with our neighbors -- lets get over our obsession of replacing functional buildings with fancy ones so that our City Counsel can look like they are actually doing something. Our current library is underused and understaffed so why build one several times larger that will require a higher operating budget? They can't even staff the children's section right now and the activity programs there have been cut way back.

    And has anyone considered how a .5% increase would impact local business? Who'd buy an expensive car in Hayward when they can go elsewhere and save a few hundred bucks?

  7. Government unions must be banned throughout the USA. With government pensions creating massive taxpayer liabilities, new fees and taxes are invariably diverted to sweeten the pension benefit honey pot. Local, State and federal government has become a self-severing, gold-bricking, impenetrable black-box of self dealing insiders only interested in protecting pension benefits and personal self gain.

  8. To Anonymous and the government unions diatribe, let me note a few things. First, it is not the unions that proposed this tax. Second, the reason government pensions have created massive taxpayer liabilities is government's refusal to bite the bullet and pay in their share while allowing employees to shirk their part. In addition, bad investments on the part of pension funds have contributed greatly to this mess. In 1978 I worked for San Diego County where I was asked to clarify the actuarial recommendations for the pension fund, said recommendations being to increase county and employee contributions by 7 to 14%. After discussing this with many inside and outside government it was pretty clear the politicians had no idea what was going on. And, of course, to keep voters happy, they decided not to increase contributions. Also, anytime pensions are increased, the politicians share in the largesse. Remember, you voted in these politicians so how is banning government unions going to solve the problem?

  9. In this election, Hayward citizens need to do the math.

    In 2009, radio station KNTS wished to build four radio towers on city of Hayward property near the Hayward Regional Shoreline close to 4 existing radio towers; not far from the Russell City Power Plant and not that far from the Dow Chemical "stack". For their 4 towers, KNTS would make a $5 million "fee payment" and annual $60,000 lease payments to the City of Hayward. This offer was turned down by many on the present City Council.

    In 2012, Walmart’s request to open a grocery store in the vacant Circuit City space at Whipple and Industrial was turned down by city council, notably Marvin Peixoto and Al Mendall because it did not meet a “regional or sub-regional use.” Later a 24-Hour Fitness took over the space. Lost in the transaction was the millions in property and sales tax dollars that would have gone to Hayward if Walmart had been allowed in. Studies indicate Walmart brings a minimum of $250 million a year to a municipality in sales and property tax revenue. The current occupant of that space is a 24-Hour Fitness. Their operating revenue averages $1.2 million a year. Do the math. The sales and property tax revenue to the city is a pittance next to what we would have received from Walmart.

    In 2013, voting down using the Mervyn’s space for a mixed use development, the reason given, both public and government, was that the property was zoned commercial and should be used strictly for that. Despite the fact that over 50% of downtown and South Mission commercial properties are empty. And have been for years. In eight years no company has come forth to use the Mervyn’s property for anything other than mixed use. As to the suggestion that the property be used for a conference center, the simple fact is most conference centers are located in areas with high end hotels, restaurants and retail stores, theaters, music venues, art galleries and other attractions. Next time you go downtown, count the locations that meet that criteria. Make a list of conference centers in East Bay and ask yourself, “What does Hayward have nearby to compare with what they have?” Hayward is a nice town to live in but it does not have what is needed to attract or support a conference center. The annual economic impact from the proposed project had been estimated at $9 million in retail sales and close to half a million in city revenues. But the City Council, in its wisdom, thought a pie in the sky would be much more valuable than a mixed use project on the ground. And the city and its residents get nothing because no one did the math.

    The response of City Council to these very bad decisions that have cost the city millions in revenue? Float an increase in the sales tax and cut employees’ pay. While I know part of this sales tax increase is for a new library, where the library is concerned, it is a) among the costliest in the Bay Area and b) supposed to increase visits downtown from 400,000 a year to well over a million. Costliest? In the Bay Area? When we are being compared to places like San Jose, San Mateo, Danville, etc. where annual family income is at least 40% to 70% greater than Hayward’s? A three-story atrium of wasted space you'd expect in a city like San Francisco or New York? Over a million visits downtown? To go to a library? Really? If someone did the math on this one they really need a new calculator.

    I am not endorsing anyone but I do suggest Hayward voters think long and hard on their vote this year because we just can’t afford any more poor decision-making on the part of our City Council and Mayor.

    Flo Samuels
    24556 Margaret Drive
    Hayward, CA 94542