Willow Glen Resident

News

Council members rely on outside revenue; job doesn't pay the bills

ByEli Segall

Being a San Jose City Council member offers prestige, power and press. What it doesn't offer, council members say, is money.

To supplement their $75,000 annual salaries, almost half of the city council earns outside revenue from consulting work, legal work, pension plans or rental properties. Some pull in more money than others--some a lot more than others--but most agree that a council member's salary is not a living wage.

"We live kind of paycheck to paycheck," said Councilman Pete Constant. When asked if he could live on his council salary alone, Constant, a married father of five young children, said, "Bluntly--no."

Fortunately for him, Constant has outside income. The former San Jose police officer was injured in the line of duty in 2000 and receives a disability pension for life from the city. He also owns a photography business called Constant Image Photography, but since taking office in January, the business has ground to a halt. An income disclosure statement Constant filed in April with the San Jose City Clerk's office reported zero hours spent on work unrelated to council duties between January through March. This is the first time council members have had to file financial statements under the new Sunshine Law, a disclosure requirement that came to fruition last year through in an effort to push for more open government.

"Without my pension I could not be a council person; I simply could not do it," said Constant, whose pension equals half of his final average salary as a cop, according to the San Jose Retirement Services Department.

His salary, and others on the council, will now receive a boost. The San Jose City Council on May 22 approved the salary setting commission's recommendation to increase the annual pay for the mayor and the council. The mayor's salary, currently $105,000, will jump to $127,000 by 2008-09, and council members' pay will rise from $75,000 $90,000. The commission also recommended nearly doubling their monthly car allowance from $350 to $600.

The motion passed 6-4. Mayor Chuck Reed, Vice-Mayor Dave Cortese and councilmen Sam Liccardo and Pierluigi Oliverio voted no; before the vote, Reed said he would not take the raise if it was approved. A separate motion asking city staff to research methods of eliminating city council approval from future pay raises was approved unanimously.

"When you look at the responsibilities versus the income, it just doesn't match," Councilwoman Nancy Pyle, a former teacher elected in 2004, said last week. "I think it's long overdue."

For some, the raise is a drop in the bucket. Councilman Forrest Williams, who spent more than 30 years at IBM and retired as a senior engineer, owns more than $1 million in IBM stock and collects a company pension. He also receives Social Security benefits and owns three rental properties valued between $100,000 and $1 million each, according to a disclosure statement filed in March.

Williams, who for years represented IBM Japan in the United States and speaks Japanese, acknowledged the raise would not change his financial status.

"My wife and I, we had a plan, we executed the plan, and it all worked out," Williams said.

Other council members who earn outside revenue include Pierluigi Oliverio, who earned more than $1,000 for eight hours of consulting work on March 30 for tech firm Arena Solutions, and Judy Chirco, who, with her husband, owns rental properties valued collectively at nearly $ 1.4 million, according to a disclosure statement filed with the city clerk's office and Santa Clara County Assessor's Office. Mayor Chuck Reed and almost every council member own stocks, bonds and mutual funds.

Some dip into these reserves to supplement their council salary.

"There's no way I could do this job without drawing on my savings," said Vice Mayor Dave Cortese, whose family owns the Country Club Villa Shopping Center on McKee Road and real estate properties in Alameda and Sacramento counties.

Cortese also works one hour per week, typically by telephone, for Morgan Hill-based law firm Van Keulen & Van Keulen. He earned less than $500 for 13 hours of legal counsel between January through March of this year, according to city records.

"I didn't sign up for this job to make money," said Cortese, who owned his own law firm before joining the council, "and I don't regret it for a second."