The Burlingame Voice

School Bonds...And Then There Were 3

For the first time in more than 20+ years, I've been contemplating whether or not to support a B'game school bond measure (Measure O) and the SMUSHD Measure L.  Over the last 20+ years it's been a no-brainer to vote "yes" and to further support the schools with donations and charity auction donations and bids.  Parcel taxes and bonds for the local schools are the most local taxation we have and local is good.  In reading the full text of Measure O, my concern was the last bullet point on the Project List 

Workforce housing to increase accessibility for District employees to quality, affordable housing

I decided to check in with Superintendent Maggie MacIsaac about any housing plans and she brought Board member Davina Drabkin into the conversation.  Davina and I had a good conversation about the pressures the district is feeling to retain staff including credentialed staff in key areas like math.  Here are a couple things that came out of that discussion

• There is no pre-allocated portion of the $97 million for housing.
• There are a number of models being tried elsewhere (subsidies, partners, build to suit, etc)
• The Board included the language in order to be able to spend money on studying the issue
• Unlike some Districts, B'game doesn't have land available for any sort of build project and is unlikely to be able to buy it

As a former analyst, I also want to look at the metrics that might point to the severity of the problem, so Maggie was kind enough to provide the teacher turnover (not counting retirements which don't fit the problem) over the last 12 years which are

• Year        % Certified Staff Turnover
• 2007/2008             8.7%
• 08/09                    4.4
• 09/10                    10.6
• 10/11                    9.8
• 11/12                    7.6
• 12/13                    14.4
• 13/14                    12.2
• 14/15                    15.1
• 15/16                    13.8
• 16/17                    16.6
• 17/18                    12.25
• 18/19                    13.3   

There are a lot of factors that go into teacher turnover, but you can say there is a slight upward trend to the data.  There are also a number of non-District-driven projects that might address the housing issue-- the city project on Lots F&N, the stunning amount of building going on it town with affordable unit components, and the possibilities of additional teacher compensation that might not involve millions of dollars of debt.  Of course, the stunning amount of building will only exacerbate the school budget problem. The real challenge for Measure O and L is that a state Proposition, crazily listed as 13 that I'll just call the New Prop. 13, is also on the ballot for $15 billion.  As the Chronicle reported today

The largest school bond in state history, at $15 billion, is going to voters in March as supporters try to put a dent in a $100 billion backlog of failing boiler rooms, leaky roofs and new construction projects needed at K-12 schools and universities.

Proposition 13 — unrelated to the same-numbered 1978 tax measure — was placed on the ballot by the Legislature with bipartisan support.

Supporters, which include the education establishment as well as the construction industry, would allocate $9 billion to K-12 schools, $4 billion for California’s public universities and $2 billion for community colleges.

The prospect of voter fatigue is very real-- I am hearing it all over town.  So I'm still contemplating how I will vote, but I feel a little better having some information that I didn't have before.  Hopefully you are too.          

Crime Update - 5 Year Trends

I had a chance to sit down with Chief Mike Matteucci and Lt. Jay Kiely for an update on police affairs.  I would say that I was meeting with the "new" chief after Chief Wollman, but Chief Matteucci's been in the position for a year already.  Time flies but the Chief move up through the ranks here in town and it appeared to be an easy transition .  Voice readers will recall a three-part series I did five years ago on various department initiatives including the Quality of Life team, the actions to reduce property crimes and technology initiatives.  During our discussion, it was clear that many of the initiatives have come to successful conclusion or are continuing to progress.  The most notable shift in the crime figures came in Vehicle Burglaries (i.e. of locked vehicles) which jumped near the end of the year especially downtown.  BPD has some on-going tactics to fight this trend that I won't go into here.  Here are the monthly averages:

Monthly Average                    2015    2016    2017    2018    2019

Residential Burglaries                5        5        2            3        3

Vehicle Burglaries                    22       23    25        21       39

Commercial Burglaries                8        9        4            5        4

Other Thefts                              56        60      51        56      61

Robberies                                   1        1        1            1        2

Stolen Vehicles                          10        9        6          4         6

Vandalism                                  14       13    13          11       12

 

"Other Thefts" include porch pirate package thefts, shoplifting and stealing items out of unlocked cars.  B'game averaged 127 crimes per month in these seven categories last year.  Having now subscribed to the daily email crime summary for several months, I can also say there are a semi-regular occurrences of other, more serious crimes like assault and sexual assault.  Fraud, scams and DUIs are also represented on a monthly basis.

As the city's population grows with all of the building taking place we should expect to grow the police department budget as well.  It may not have to grow linearly with population, but it will have to grow.                                                           

Santa, I Want a Swimming Pool

Another long-running B'game saga is coming to a conclusion in the next two weeks as the BHS pool is ready for swimsuits.  Here is your personal invite to the Grand Opening courtesy of the Trustees:

Be among the first to dive in when the San Mateo Union High School District and City of Burlingame celebrate the Grand Re-opening of the Burlingame High School Aquatic Center: 

Wednesday, January 8 at 5 p.m.

Burlingame High School 

 With strong financial support and through a partnership with the City of Burlingame, the San Mateo Union High School District has just completed renovation of the Burlingame High Pool including a new shell, deck and substantial sustainability upgrades.

It's likely to be chilly at 5pm in two weeks, but go for it anyway.  You can click through to here for what it looked like in January and this is what $6.4 million can do

Friends With Benefits: New CalPERS Guy Gets Tough

We haven't addressed much in our "Friends With Benefits" category since this post in August of 2017 that noted an 11.2% return that year and a 68% funded ratio for benefits.  During the council rotation Monday night, Mike Brownrigg commented that some of the unheralded accomplishments of the council this year was additional funding for pension benefits.  Compared to many cities we are in good shape--emphasis on compared to many other California cities.  This matters because the added funds come out of the funds available for everything else in town.  Last week, the WSJ had a piece on the new investment head at CalPERS that was revealing and encouraging

It didn’t take Yu Ben Meng long to find problems at the nation’s largest pension fund.  Six months after starting as investment chief of the California Public Employees’ Retirement System, he told board members at a Santa Rosa, Calif., gathering in July that some older investments might be valued too richly, said people familiar with the matter. By fall, the fund had shaved the value of a real-estate investment trust and was looking more closely at a five-plus-year-old bet on a solar developer, other people said.

Now as his first year comes to a close, Calpers has cut ties with a longstanding manager on a hometown project, jettisoned under-performing stock pickers, and slowed work on a multi-billion-dollar private-equity experiment.  Calpers’ has struggled to consistently meet its 7% yearly target at a time of high retirement costs and ultra-low interest rates. The pension fund has on hand only about 70% of the assets it will need to fund future retirement checks.  He told board members in January that the world today has many bigger, more nimble asset managers not based in Sacramento.

The fund also jettisoned four of five firms in a program that sought to attract women and minority managers that his predecessor helped grow.  Cuts to such a program “could be a hot potato and have political ramifications,“ said Co-Chairman Howard Marks of Oaktree Capital Management. ”But if your job is to achieve investment performance, you can’t be confused about what’s No. 1.”

Staffers are looking more closely at a developer of solar energy assets that some staffers at the fund believe is worth half or less of what it is valued at, a person familiar with the matter said.

So he won't overtake Judge George Miriam as person-of-the-year, but I'm thinking he makes an excellent runner-up.  Now if Yu can just keep the Legislature and Newsom from burning through the $21.5 billion budget surplus on pet projects and be as disciplined as B'game has been, we might get somewhere.

Death...Oops... Trains and Taxes

Since affordability is such a hot topic these days we should examine each and every effort to degrade our affordability.  Gas taxes.  Highway 101 fees.  Natural gas bans in new buildings--or at least so far only new buildings--so we can spend oodles on electricity.  School bonds and parcel taxes.  More bonds for affordable housing.  A sliver for the Rec Center.  I'll bet some of the regular Voice commenters can remember some that I am missing.  So here are the latest two-- a slice for the train and a big bite on commercial property which is to say a big bite on brick and mortar retail.  Amazon must be thrilled.

Bond Disclosures and Sea Level Rise

As I was reading yesterday's WSJ article about coastal cities decrying the impending sea level rise on one hand and essentially ignoring the risk in their municipal bond disclosures, I flashed on the B'game bayfront and the bonds we are about to issue for the Rec Center rebuild.  The Journal article notes

The Government Accountability Institute undertook a yearlong study of 40 major cities to find out if mayors’ apocalyptic projections about climate risks are factored into the interest rates on the municipal bonds their cities issue. The results revealed a gulf between the words municipal leaders speak and the disclosures cities make. There was no statistically significant difference in the interest rates for bonds issued by cities in high-risk locations for climate-change devastation versus those issued by low-risk cities.

The study also found scant mention of climate change in bond disclosure documents. The disclosure statements of the 20 at-risk cities totaled 4,361 pages. Phrases like “climate change” and “sea-level rise” appeared fewer than 100 times across all 20 at-risk cities in the context of the issues addressed in this study. Further, 12 out of the 20 disclosures for at-risk cities did not mention climate language in the same context.

When they got to discussing Oakland, it felt very close to home indeed since our sea level is their sea level

Worse, “by 2050, a ‘100-year flood’ in the Oakland vicinity is expected to occur on average once every 2.3 years and by 2100 to occur 44 times per year or almost once per week.” The lawsuit added that “Oakland is projected to have up to 66 inches of sea level rise by 2100.” The city alleged this would “imminently threaten Oakland’s sewer system” and harm property with a “total replacement cost of between $22 and $38 billion.”

Contrast that detailed, dramatic language with Oakland’s bland, measured 2017 bond risk disclosure to investors: “The City is unable to predict when seismic events, fires or other natural events, such as sea rise or other impacts of climate change or flooding from a major storm, could occur, when they may occur, and, if any such events occur, whether they will have a material adverse effect on the business operations or financial condition of the City or the local economy.”

That looks like an "oopsy" to me.  Which is it?  Is Oakland 30 years from disaster on a semi-annual basis which for a major port city would be a financial Titanic or are they unable to predict any of this?  We will have to have our local bond expert(s) weigh in on the B'game disclosures of same.

B'game Fiscal Risk: Yellow!

There are several news pieces highlighting the California Auditor's release of a top-to-bottom ranking of California cities' financial risk using ten metrics that combine into an "overall risk" rating of red/yellow/green.  Most of them don't bother to include the website link so here you go.  Naturally, the first question I had was "Where does Burlingame rate?"  I was expecting bright green, but alas we are ranked #220 riskiest out of 471 cities earning us a yellow overall rating.  San Bruno, Millbrae and H'borough are green overall while San Mateo joins us in the yellow category.

You have to work at it on the site to see how each of the ten contributing factors play into the rating-- but that's what I'm here for:

Liquidity:  Green

Debt Burden:  Yellow  (And rising.  Will the Rec Center bonds move us to Red?)

General Fund Reserve:  Green

Revenue Trends:  Yellow  (Adding a lot of housing won't help this)

Pension Obligations:  Yellow

Pension Funding:  Yellow (But lots of red in the cities around us)

Pension Costs:  Green

Future Pension Costs:  Yellow  (But again, lots of red around us)

OPEB Obligations:  Green  (Other post-employment benefits like medical and dental)

OPEB  Funding:  Red

So overall we are in the middle of the pack and yellow.

Election Issues: Pot Dispensaries; Yea or Nay?

At the City Council candidates' forum that Russ reminisced about here, there were 20 questions asked of all three candidates.  One benefit of having a small slate is that every candidate responded to every question.  I'm working through the themes of the night with an eye toward the questions that illuminated differences between the candidates.  That is not as easy as it might sound.  One question that elicited a different response from the incumbents and the challenger was #9 about having marijuana dispensaries in town (specifically at the Bayfront) although I think the questioner really meant the industrial section of Rollins Rd rather than the Bayfront.  The potential city revenue was also mentioned in the question.

Both incumbents, Emily Beach and Donna Colson, put pot dispensaries pretty far down their list of priorities and thought we should "go slow".  Mayor Colson noted the use of pot among high school students already and that Rollins/Bayshore is soon to be a new, residential neighborhood.  The challenger, Mike Dunham, took a different approach.  He noted that he didn't think of it as a revenue issue, but rather that since 63% of B'gamers had voted to legalize it then it should be allowed to be dispensed.  He also noted the preponderance of 40-60 year olds using it for chronic pain.  Since the forum, Mike Dunham and I have had a one-to-one interview and the issue came up again--this time in the context of the eternal question "What do we do about Broadway?"  Mike's thinking is that a dispensary on B'way would drive traffic and benefit all of the merchants and restaurants on the street.

As luck would have it, the day before my interview with Mike Dunham I was a guest of the CEO and the Chief Strategy Officer of Caliva for a tour of the San Jose facility where they grow, package and sell/distribute all sorts of THC and CBD products.  I worked with both individuals in the tech industry for years and now they are onto something entirely different that I found eye-opening.  I'll just mention a couple of points pertinent to the Burlingame question of allowing or disallowing a dispensary.  First, it very well could be a revenue issue.  Caliva is one of the very top sales tax payers in San Jose--and SJ is big town.  At the candidate forum, question 19 asked about "affordability" and the continually escalating sales taxes (like Measure I that we addressed here).  There are more taxes coming from the state, the county and the schools on every ballot.  So the money does matter.

The foot traffic into Caliva was continuous while I was there at midday.  The CEO indicated they get between up to 1000 walk-ins per day even though they make more than 1,000 deliveries per day.  That last point is also pertinent to the B'game decision.  B'gamers already have delivery options from Caliva or Eaze among others, but a retail space allows for an informed sales staff to help particularly with the CBD wellness, pain relief, anxiety relief side of the story.  CVS was offering some CBD oils in store, but that relationship was quelled by the feds and CVS customers did not have the benefit of an informed sales staff there anyway.  The issue of a dispensary in town, yea or nay?, probably isn't enough to swing one's city council vote either way, but it does show some of the thinking of the three candidates.  Here is the Caliva location in an industrial section next to a recycling facility in San Jose.

 

Floppy Signs Multiply

It seems like the yellow floppy Yield to Pedestrians in Crosswalk signs are multiplying like rabbits around town.  Also known as "Ped pop-up" signs or "In-Street Ped warning" signs, they were originally designed for mid-block crossings. Gradually they’ve been expanded to be used even at intersections and sometimes even on both sides of the same intersection.  One intrepid Voice reader notes  

Most cities have already figured out they don’t work and are knocked down a lot (see photo below on California Ave.). They are a maintenance nightmare as we’ve seen, and in the worst case, they actually impede a regular car driver from safely completing a left turn from a side street.  This makes the driver navigate the turn slowly and be more exposed to getting broadsided by a car on the major street.  It’s our city continuing to throw money down the drain in the hopes of virtue signaling that it cares about pedestrian safety.

I have also seen drivers slow to a crawl when there is no pedestrian anywhere near the crosswalk-- so-called "traffic calming" gone awry.  Let's hope the city is evaluating the cost-benefit of these signs.

 

 

Lot Y - Electric Field of Dreams

The new EV charging station parking spaces are open at Lot Y.  You can read about the start of the project from April here.  I've been by about five times since they got finished and am waiting to see my first car use one.  I'm sure it will happen soon, but you have to wonder if it was a good idea to give up ten spaces for eight EV spaces.  The day after I took this photo of the empty spaces a regular Voice reader/contributor sent me the exact same photo with the same concern.  He was also kind enough to send an overhead, marked-up photo of the lost spaces memorialized here now.  Thanks BMW, nice work.