September 9, 2004

City Auditor Jerry Silva calls himself ‘Darth Vader’ of City Hall

Editor’s Note: The following is the ninth article in an ongoing series about the city’s departments and appointed officials. Next week: Planning, Building and Code Enforcement Department Director Stephen M. Haase.

By Sheila Sanchez
Staff Writer

Gerald A. Silva was responsible for one of two investigations conducted into the city’s botched Cisco System’s technology contract for the new City Hall. Photo by Sheila Sanchez

Jerry Silva is the eyes and the ears for the San Jose City Council. He calls himself the Darth Vader of City Hall—the dark lord of municipal government, a scourge among those he investigates—the fearless enforcer of the three Es of economy, efficiency and effectiveness.

“Nobody likes to be audited, but it’s necessary,” says the 59-year-old Silva, admitting his job is sometimes difficult because he feels like an “outsider, an intruder, not part of the city family. Like that cousin that no one likes to talk about. That’s me.”

At city social gatherings, Silva is the man who can stop more conversations mid sentence by just walking up to a group of people than anyone else.

The Sacramento native gives city officials the straight goods with accuracy, objectivity and independence.
The three ingredients add up to credibility—the most important attribute of a city auditor’s office.
“Truth, justice and the American way,” says Silva during an interview in the city auditor’s office located on a one-story building across from City Hall.

During the recent Cisco System’s scandal, it was Silva’s office, which conducted one of two investigations into the botched attempt to award an $8 million technology contract for the new City Hall to the Internet networking giant.
In our interview he describes the controversial “Request For Proposal” for the lucrative technology contract that was going to carry voice over Internet Protocol allowing telephone over the Internet and data and video on the same network.

Asked whether his investigation found collusion, he dismisses the word and says he discovered an outside vendor was driving the RFP for the city. “Cisco provided the expertise to design the system. It provided the expertise to write the RFP. It provided the city with the ‘bill of material’ made up of 18,000 pieces of equipment that was in the RFP that had to be included in any bid. It answered the potential bidders’ technical questions. It did all the things that the staff should have done. That’s not how we do city business. We are supposed to have overarching principles with regard to procurements and the underpinning of all of it is that it’s competitive, fair and a level playing field for everyone and that was clearly not the case in this RFP.”

The bungled City Hall technology deal is not the only controversial investigation he’s performed. About a year and a half ago, Silva launched a performance audit on city vehicles, saving San Jose $30 million on cars it was going to purchase, but didn’t need.

Silva’s office has a formal process for conducting audits. Every year, he drafts an annual work plan based on a meticulous analysis of the city’s budget. He ranks more than 300 elements in the budget to identify his top 10 audit areas, which are then sent to the city’s rules committee to be approved. During the year, council members are allowed to request performance audits, too; but a formal process must be followed with the rules committee deciding whether he can do the audits.

During his 20 years with the city he’s made 1,700 recommendations focusing on the three Es and saving the city more than $200 million.

The city auditor is one of six council appointees. The others are the mayor, city attorney, city clerk, deputy director of the redevelopment agency and the independent police auditor.

According to the city charter the appointment is for a four-year period. The council has appointed Silva to the position four times. The charter also specifies that the only way the council can remove the city auditor is if 10 of the 11 council members favor his removal.

The law affords the city auditor the kind of insulation and protection from pressure needed to be effective, he explains.

“You need to make sure this office is independent. It’s the most important attribute of this office,” says Silva.

“The mayor and the members of the city council are my bosses, but they can’t influence how we do our work and how we report the results of our work. We have to do that without any interference or pressure from the council or anybody.”

The infamous $60 million investment loss
The office of the city auditor was created in 1963. It was initially part of the city’s finance department. In 1967, the charter was changed and the office became a council appointment, independent from the administration.

In 1984, the city lost $60 million due to unwise investment decisions from the city’s top finance department officials, many of whom were fired or resigned, including Silva’s predecessor.

In 1985, the council went on a nationwide search for a city auditor finding Silva who, at the time, was working as state budget director for Bruce Babbitt. With Silva’s help, the city created oversight and reporting requirements that outdo those in almost every other large city.

After being hired, the council formed a charter review committee, comprised of 20 people from various walks of life, meeting once a month. Silva spoke one evening with the committee for about three hours telling its members he thought the charter needed to say his office would do performance audits, that his staff would be exempt from civil service and that he would have access to all city books, records, charts and accounts. They agreed and the charter was changed through the passage of Measure M.

“It was an important moment in the history of this office,” he recalls.

He said he took the job because of the protections the charter granted the office and because he longed to return to California after serving in Arizona for seven years, since 1978, in the Arizona Auditor General’s Office where he was entrusted the creation of a performance audit function.

When Silva first interviewed with the city, he promised that his office would more than pay for itself. His goal was to return $3 for every dollar spent on his office. He’s surpassed his goal by returning about $7.

“It’s a great job for a number of reasons. The work is challenging and it’s never boring. I’m always learning something new moving from one department to another, from one activity to another, dealing with different personalities,” he notes.

His work is also gratifying, he offers, because it makes a difference, it’s important and matters. “We’re not only saving or making money for the city, but we’re improving the services the city provides for its citizens.”

One of his more notorious audits of the city was one of the San Jose Fire Department Emergency Medical Services which revealed that Emergency Medical Technicians had received a 5 percent pay increase after training on how to use defibrillators, electronic devices that administer an electric shock to the heart through the chest wall to restore the normal rhythm of the heart during ventricular fibrillation. Only problem, Silva explained, was that the department never purchased defibrillators. “It was one of those forehead slapping things,” Silva recalled, explaining the department had requested the devices, but they had been denied by the city manager’s office in the department’s budget request.

Six months after the council ordered them purchased, the fire department reported the machines had saved 72 lives. “That wouldn’t have happened if it wouldn’t have been for our office. That’s very gratifying,” he says.

Another memorable audit was one of his first ones to the city’s library department, which was spending 16 percent of its book purchases to acquire thousands of foreign-language textbooks, magazines and materials after a mandate from the council, but which weren’t being catalogued, shelved or available to patrons because no one could read them.

Silva said that while the library audit didn’t save the city a dime, it improved the library department’s quality of service.

Silva attended Sacramento State University where he obtained his bachelor of science in business administration. Soon after he went to work for the Ernst & Ernst accounting company and became a CPA.

In 1971 he went to work for the California Auditor General’s Office; in 1978 he went to work for Arizona Auditor General’s Office and then in 1981 he became the state budget director for former Arizona Governor and U.S. Secretary of Interior Bruce Babbitt.

The city auditor’s office operates with 20 employees, including Silva, four supervising auditors, 11 auditors and four administrative staff. The office also manages a $2.4 million operating budget and trains and employs student interns to perform sales tax audits on a consistent basis to make sure that the sales taxes that should go to the city are paid to the city, making between $1 and $4 million.

For more information on the Office of the City Auditor, 800 No. First St., San Jose, Calif., 95112, call (408) 277-8338 or log onto www.sanjoseca.gov/auditor.