Council splits on downtown parking rates; detention facility moratorium adopted

A ceremonial commendation, sponsored by George Casey (Councilmember, District 10), recognizing On Lok, which has spent 55 years providing health, medical and social services that help frail seniors keep living at home instead of in a nursing facility (agenda). 00:06:44

• George Casey (Councilmember, District 10) described On Lok's 55 years serving Bay Area seniors and noted its newest PACE center opened in District 10. 00:07:24
• A guest presenter accepted for On Lok, saying it serves more than 2,000 seniors through its PACE program and is the only PACE provider serving the whole county. 00:08:43

A ceremonial proclamation, sponsored by Pamela Campos (Councilmember, District 2), naming September 2026 Transit Month in San José. It also recognized San José State students for bringing the regional Clipper Bay Pass to campus. 00:10:34

• Pamela Campos (Councilmember, District 2) credited SJSU student advocacy for bringing the Bay Pass to campus, which lets students ride transit across the nine Bay Area counties. 00:11:53
• Pamela Campos (Councilmember, District 2) noted the city's transit-first policy, adopted with the Move San José plan in 2022. 00:12:56
• A speaker said, speaking for SJSU's Associated Students, that during the Bay Pass pilot, students with the pass dropped out or left campus 6% less often than students without it. 00:15:52

A ceremonial proclamation, sponsored by Pam Foley (Councilmember, District 9; Vice Mayor), Rosemary Kamei (Councilmember, District 1) and Pamela Campos (Councilmember, District 2), recognizing International Day of the Girl. A high-school student from the Boys & Girls Clubs of Silicon Valley accepted it. 00:20:38

• The meeting chair said City Hall will join other downtown landmarks in lighting up pink from October 5 through 9 for Day of the Girl. 00:22:43
• The meeting chair said she is the honorary chair of this year's Day of the Girl event, hosted by the Boys & Girls Club. 00:22:43

Routine business: the agenda was taken with no changes, and there was a report on the morning's closed session. 00:29:11

• The meeting chair reported that the council met in closed session that morning and had nothing to report. 00:29:11

Routine items approved together in one vote and not discussed: airport lease extensions, contract amendments, a grant application, travel approvals, the Measure T bond status report, and final adoption of an ordinance on reasonable-accommodation requests. Nobody asked to pull any item, and there was no public comment. 00:29:11

• Motion to approve the consent calendar (mover and seconder not identified in the transcript). Result: passed, 9-0. 00:29:58

A Conditional Use Permit and Determination of Public Convenience or Necessity allowing off-sale of a full range of alcoholic beverages (Type 21) at Sakura Market, an existing specialty supermarket of about 7,382 square feet at 184 South Market Street, Suite 120, in District 3. The Planning Commission had recommended approval 10-0-1 (agenda). There was no public comment. 00:30:18

• Motion to approve the land use consent calendar (mover and seconder not identified in the transcript). Result: passed, 9-0. 00:30:42

Sitting jointly as the City Council and the board of the City of San José Financing Authority, the council approved short-term borrowing (commercial paper notes) of up to $200 million outstanding at any one time. The money funds work on the city's sanitary sewer system and the regional wastewater treatment plant, which San José owns jointly with the City of Santa Clara. The approval also allows future extensions of the supporting letter of credit, as long as the facility fee rate stays at or below 1.00% (agenda). Staff said the notes are repaid from wastewater revenues, the general fund is not pledged, and approval needed a two-thirds council vote. Two votes were required: one for the city, one for the Financing Authority. 00:30:45

• A councilmember moved approval of the City Council resolution (a) authorizing the commercial paper program (seconder not identified). Result: passed, 9-0. 00:40:09
• Motion, on behalf of the Financing Authority, to approve the Authority resolution (b) (the mover's words sit in the chair's turn; apparently the same councilmember who made the first motion; seconder not identified). Result: passed, 9-0. 00:40:31

• A speaker described the sewer system the program funds: more than 2,000 miles of mains and 17 pump stations. 00:31:58
• A speaker said about $300 million of sewer work is planned in the five-year capital improvement program. 00:33:02
• A speaker said about $1.6 billion of investment is expected at the treatment plant over the next ten years, correcting a figure he misspoke first. 00:34:06
• City staff said a request for proposals led to a contract award to Bank of America, and that the city plans to issue notes before October 16, 2026 to refund $90.1 million in outstanding subordinate revenue notes. 00:34:28
• City staff said the facility fee will be 0.31% under the city's credit rating, that wastewater revenues repay the notes, and that the general fund is not pledged. 00:34:28
• City staff said the debt management policy and the municipal code require a two-thirds council vote to approve the notes. 00:36:37
• David Cohen (Councilmember, District 4) thanked staff for their management of the wastewater system and its finances, and moved approval. 00:39:18

The standing verbal report from the City Manager's office. 00:40:34

• City staff said there was no report this week. 00:40:55

An audit by the city's audit office of the performance measures that the City Manager's Office of Economic Development and Cultural Affairs (OEDCA) reports, including in the operating budget. The audit found the measures generally useful and reliable but recommended changes to make them clearer and more consistent. The Community and Economic Development Committee recommended accepting it (agenda). 00:40:59

• Motion to accept the audit report (mover and seconder not identified in the transcript). Result: passed, 9-0. 00:45:52

• A speaker presented the audit's single finding: the measures are generally useful and reliable, but reporting could be improved. 00:41:27
• A speaker said OEDCA reports 39 measures in the operating budget and that the audit makes five recommendations, including documenting how each measure is calculated. 00:42:31
• City staff said the administration accepts all five recommendations and has prepared a response. 00:43:48
• A councilmember asked whether OEDCA could report small business assistance by council district or neighborhood business district, to show whether help reaches businesses across the city. 00:44:53
• City staff said the office can sort its data that way and will coordinate with the councilmember. 00:45:16

An interim ordinance, sponsored by Matt Mahan (Mayor), Pamela Campos (Councilmember, District 2), Peter Ortiz (Councilmember, District 5), Bien Doan (Councilmember, District 7) and Domingo Candelas (Councilmember, District 8), that temporarily stops the city from filing, accepting, processing or approving applications to establish, expand or change the use of detention and custodial facilities on private or public property, to the extent state and federal law allow, with certain exemptions. State law requires nine affirmative council votes to pass it (agenda). The item came over from the September 15 meeting. There was no staff presentation. 00:45:57

• Peter Ortiz (Councilmember, District 5) moved to adopt the interim moratorium ordinance (seconder not identified). Result: passed, unanimous. 00:51:42

• A speaker thanked a member of Congress's office and the coalition of supporters, said he hoped other cities would follow San José's lead, and moved approval. 00:50:55
• The meeting chair said the item passed as it should have and thanked the colleagues who brought it forward. 00:51:48

Lets the Public Works department award a construction contract for the SJC Terminal Elevator Replacement Project at Mineta San José International Airport to the lowest responsive, responsible bidder, for up to $9,415,000. It also lets the department decide any bid protests and approves a 15% contingency (agenda). There was no staff presentation. 00:51:48

• Motion to approve (mover and seconder not identified in the transcript). Result: passed, unanimous. 00:53:19

Staff proposed changing the city's Master Parking Rate Schedule over five years. In year one, garage special-event flat rates would rise to a $13–$35 range (later $15–$35) and garage daily rates would become $1.25 per 15 minutes. Downtown meters would then rise to $3 an hour and later $4. In July 2028, meter hours in the downtown, South First/University and Arena/Diridon districts would extend from ending at 6 p.m. to 9 a.m.–9 p.m. Neighborhood districts (East Santa Clara, Japantown, First and Younger) would go to $3 in 2030. The proposal also widens the discounted downtown employee parking permit and continues 90 minutes of free parking at the Convention Center Garage on non-event days (agenda). Staff said meter rates were last changed in 2014. The adopted 2026-27 budget already counts on an ongoing $1.2 million a year from the parking fund to the general fund. The item had been deferred three times (June 23, August 11 and September 15), first after heavy public opposition in June. Anthony Tordillos (Councilmember, District 3) brought a memo proposing a shorter two-year plan without the longer meter hours or downtown-only meter increases. That memo failed 5-5, a motion for a joint meeting with the Downtown Parking Board failed 5-5, and a reduced version of the memo passed 7-3. It raises garage event and hourly rates, expands the employee permit discount, keeps the Convention Center free-parking pilot, and directs follow-up studies. Meter rates and meter hours were not changed. 00:53:24

• Anthony Tordillos (Councilmember, District 3) moved approval of his memo: a two-year phase-in of the garage event and daily rate increases, then $3 an hour at meters in all districts; no meter-hour extension and no extra downtown meter increase; plus directions on a long-term parking revenue framework, return-to-source options, and annual data reports to the Downtown Parking Board (seconder not identified). Result: failed, 5-5. No: Peter Ortiz (Councilmember, District 5), Bien Doan (Councilmember, District 7), Domingo Candelas (Councilmember, District 8), Pamela Campos (Councilmember, District 2), George Casey (Councilmember, District 10). 02:32:17
• Pamela Campos (Councilmember, District 2) moved to request a joint meeting of the City Council and the Downtown Parking Board to discuss the item (seconder not identified; a requested amendment adding several memo items was not accepted). Result: failed, 5-5. No: Rosemary Kamei (Councilmember, District 1), David Cohen (Councilmember, District 4), Pam Foley (Councilmember, District 9; Vice Mayor), Anthony Tordillos (Councilmember, District 3), Michael Mulcahy (Councilmember, District 6). 02:38:59
• Anthony Tordillos (Councilmember, District 3) moved items 1a, 1b, 1c and 1f and all of item 2 of his memo: the garage special-event and hourly garage rate increases, the expanded downtown employee discount permit (eligibility up to 50% above minimum wage, tips excluded), continuing the 90-minute free parking pilot at the Convention Center Garage, and the directions to the City Manager's office on future analysis, return-to-source options, and data sharing with the Downtown Parking Board. No meter rate or meter hour changes (seconder not identified). Result: passed, 7-3. No: Peter Ortiz (Councilmember, District 5), Bien Doan (Councilmember, District 7), George Casey (Councilmember, District 10). 02:41:55

• A speaker gave the budget background: the council closed a $50 million ongoing general fund shortfall in the 2026-27 budget. 00:54:10
• A speaker noted the adopted budget includes an ongoing transfer from the parking fund to the general fund, supported by the proposed meter rate and hour changes. 00:55:18
• A speaker acknowledged staff fell short on outreach before the June 23 meeting and were told to do more. 00:56:26
• A speaker said downtown meter rates were last updated in 2014 and most meter operating hours have not changed in more than twenty years. 00:57:37
• A speaker said the city runs about 2,500 on-street metered spaces and that meter revenue has been roughly flat at about $3 million to $3.2 million a year. 00:57:37
• A speaker compared rates: Santana Row charges $3 an hour on the street against San José's current $2. 00:58:41
• A speaker said staff held eight stakeholder meetings between July 17 and September 2, including with the Downtown Association, business districts and the Downtown Parking Board. 01:00:45
• A speaker said the employee permit discount would be open to workers earning up to 50% above minimum wage, up from 30%, with tips no longer counted. 01:01:48
• A speaker laid out the five-year phasing, with downtown meter hours extending from 6 p.m. to 9 p.m. in year three. 01:03:55
• A speaker said the plan keeps the $1.2 million annual general fund transfer and would produce about $5 million in new money for the parking system over five years. 01:03:55
• A speaker listed upcoming capital needs, including adding an elevator at the Second and San Carlos garage, estimated at $11 million to $15 million. 01:05:08
• A speaker said the administration supports the memo from Anthony Tordillos (Councilmember, District 3), with suggested wording on its item 2A. 01:08:23
• Anthony Tordillos (Councilmember, District 3) proposed a two-year plan instead: year one raises garage special-event and daily rates ($1.25 per 15 minutes), and year two sets $3 an hour at meters in all meter districts. 01:28:15
• Anthony Tordillos (Councilmember, District 3) said the memo drops the 6-to-9 p.m. meter extension and the extra downtown-only meter increases, based on feedback from downtown residents, businesses and workers. 01:29:22
• Anthony Tordillos (Councilmember, District 3) said the memo would cover the $1.2 million general fund contribution and still leave about $800,000 a year for the parking fund, and moved approval of the memo. 01:30:24
• A speaker confirmed the memo would replenish the parking fund over several years. 01:32:11
• David Cohen (Councilmember, District 4) said it was frustrating that rates had not risen in years, and suggested the city consider regular CPI-style adjustments. 01:32:20
• David Cohen (Councilmember, District 4) said he had found downtown Oakland and Sacramento parking to cost about twice as much as San José's. 01:33:21
• A speaker said meter data comes from payment transactions, so staff cannot tell exactly how long cars stay or how many spaces are open at a given time. 01:34:45
• A speaker said staff add manual counts and are working on a curb management program that uses cameras to track curb use. 01:35:51
• David Cohen (Councilmember, District 4) suggested staff eventually report the utilization data to the Transportation and Environment committee. 01:36:33
• A speaker said the smart meters are nearing the end of their useful life and staff are looking at replacing them with virtual, pay-by-plate payment, which would need an RFP. 01:37:49
• A speaker told George Casey (Councilmember, District 10) the Downtown Parking Board has three vacancies and five applications on file with the clerk. 01:40:03
• George Casey (Councilmember, District 10) asked whether staff had analyzed the effect on downtown businesses, which he said run on thin margins. 01:40:31
• A speaker said staff had not done a detailed business impact analysis, and suggested the future parking plan could include one. 01:42:08
• George Casey (Councilmember, District 10) said he would not support the memo and wanted more time to avoid harming businesses. 01:42:44
• A speaker said that without the deficit, the general fund transfer probably would not be proposed, but staff would still seek rate increases to pay for capital needs. 01:43:56
• A councilmember said the process began disingenuously, because the revenue was built into the budget without the council fully understanding it. 01:45:02
• A speaker said that under the staff plan, money for extra garage security and cleaning would come in years four and five. 01:46:42
• A speaker said the memo would leave about $800,000 a year in ongoing revenue beyond the general fund transfer, available for maintenance and capital work. 01:47:42
• A speaker said the old garage bonds were refunded years ago and the parking fund now carries no debt obligations. 01:49:42
• A speaker said staff review parking budgets with the Downtown Parking Board three times a year. 01:50:46
• A councilmember asked the city to reconsider requiring parking board members to file Form 700 disclosures, and to present information to the board even when meetings lack a quorum. 01:51:03
• A speaker said the city does not coordinate event pricing with private parking operators but reviews their rates once a year. 01:54:38
• A councilmember asked what new meter technology would cost and whether there is a reserve for it. 01:56:40
• A speaker said there is no cost estimate yet and no reserve for replacing the meters. 01:56:56
• A speaker asked whether staff had studied how longer meter hours affected foot traffic in other cities' downtowns. 01:57:40
• A speaker said staff compared only peer cities' rates and did not do an impact analysis. 01:58:57
• A speaker argued that service workers who now park free after 6 p.m. would in effect pay to go to work, even with a discount. 01:59:59
• A speaker questioned why the budget gap was being closed on downtown in particular, citing the hotel tax as well. 02:01:02
• A speaker said he wished staff had brought information on other cities that made similar changes. 02:03:10
• A councilmember pointed to aging meters and garages, including a garage between Second and Third Streets so old it is not ADA compliant, and urged earlier investment. 02:03:41
• A councilmember urged filling the parking board vacancies quickly. 02:05:42
• A speaker clarified that the memo's two main differences from staff are no 6-to-9 p.m. meter extension and no extra $1 downtown-only meter increase. 02:07:20
• A speaker said that if nothing passed, the parking fund would spend more than it takes in, and the gap would have to be dealt with in the 2027-28 budget. 02:09:07
• A speaker noted other budget trade-offs the council had already made, such as not opening a fire station or the police training center. 02:09:07
• City staff added that the longer action on the fund is delayed, the deeper its structural imbalance becomes. 02:12:34
• The meeting chair said she had heard from event ushers worried about parking costs, supported keeping meter hours ending at 6 p.m., and was unsure about the rest of the memo. 02:13:00
• The meeting chair said she worries about her safety walking through the San Pedro garage at night. 02:14:01
• Pamela Campos (Councilmember, District 2) asked whether the item could go to a joint meeting of the council and the Downtown Parking Board, since the board has been unable to meet for lack of a quorum. 02:15:24
• City staff said a joint meeting is possible but the board would still need a quorum. 02:16:20
• A speaker said four members are seated on the board, so all four must attend for a quorum, and the clerk's office is pressing for the three appointments. 02:16:35
• A speaker said the formal five-year budget forecast is not available until March 1. 02:19:02
• David Cohen (Councilmember, District 4) said the council could approve parts of the memo, since the meter-rate increases in items 1D and 1E seemed to be what concerned members. 02:19:58
• Anthony Tordillos (Councilmember, District 3) preferred his full memo, warning that approving only the event and garage increases would not break even. 02:22:24
• A councilmember called a joint meeting with an advisory board unusual and preferred filling its vacancies so it can advise the council. 02:23:05
• A speaker said the city should not create barriers to coming downtown, while recognizing the budget urgency, and that he liked parts of the memo's phased approach. 02:25:07
• A councilmember asked how much the downtown employee parking discount is used. 02:28:04
• A speaker said fewer than about 70 permits are in use; the program offers garage parking for $50 a month to qualifying workers. 02:28:53
• A councilmember urged better promotion of the employee discount through the downtown and Japantown business associations. 02:29:47
• A speaker said the memo's $800,000 a year would be available for reinvestment starting in the first year. 02:31:15
• George Casey (Councilmember, District 10) backed the joint-meeting motion, calling it unusual but warranted by the circumstances. 02:33:00
• David Cohen (Councilmember, District 4) asked the maker of the joint-meeting motion to add some memo items, including the event rates, the employee permit expansion and the Convention Center free parking. 02:33:35
• A councilmember declined the amendment, saying those items were exactly what the joint meeting should discuss. 02:34:22
• A councilmember confirmed that no action could be taken at the joint meeting; the item would come back to the council afterward. 02:35:53
• Anthony Tordillos (Councilmember, District 3) opposed the joint meeting, noting the parking board had already met twice and made its objections clear. 02:37:08
• The meeting chair opposed the joint meeting, saying it would set a precedent for other advisory boards. 02:37:55
• Anthony Tordillos (Councilmember, District 3) moved the reduced package, acknowledging the parking fund would still lose some money each year under the $1.2 million transfer. 02:39:36
• A councilmember said the dais clearly wants the parking board fully staffed and its appointments expedited, though that was not written into the motion. 02:41:01

Amends the city's agreement with Santa Clara County for the countywide Household Hazardous Waste Collection Program, adding $4,083,373 to the original $1,200,000 for a maximum of $5,283,373 over fiscal years 2024-25 through 2026-27, retroactive to September 18, 2025 (agenda). Staff said the increase reflects lower disposal-fee revenue, more participation, and higher costs. There was no staff presentation and no public comment. 02:42:03

• Motion to approve the first amendment (mover and seconder not identified in the transcript). Result: passed, unanimous. 02:44:32

• A councilmember asked why the payment to the county was roughly quadrupling. 02:42:46
• A speaker explained that lower fee revenue, more participation and higher costs combined, leaving the city to pay more or residents to lose access to the program. 02:43:14
• A councilmember called a roughly 400% increase surprising but said the program is important to continue. 02:43:51

• Wastewater commercial paper (joint Financing Authority item): two speakers. One praised intergovernmental cooperation on wastewater; the other doubted the city's competence but hoped oversight would be adequate.
• Economic development audit (3.3): one speaker thanked the city's audit office for its work.
• Detention facility moratorium (3.5): five speakers. Four supported it, including a representative of an immigrant protection network and a representative of a member of Congress's office who noted a congressional toolkit for local zoning action. One caller opposed it, asking how the city would stand up to the federal government. One supporter also asked the council to reconsider the one-minute speaking limit.
• Airport elevator project (5.1): one speaker urged that the new elevators and access routes work in practice for people using mobility devices.
• Parking rates (5.2): about 16 speakers in person and online, one of them off topic (about AI). Nearly all opposed the staff proposal or asked for a pause. Recurring themes: harm to downtown vibrancy and small businesses (many speakers, including small business owners and representatives of the San Jose Downtown Association and San Jose Jazz); burden on service workers who now park free after 6 p.m. (several); garages being dirty or unsafe at night, especially for workers leaving after bars close (about four); specific opposition to extending meter hours to 9 p.m.; requests to keep parking revenue in the parking fund instead of the general fund; criticism of the process as opaque; and the need for disabled visitors to park close to their destinations. One business owner said he was leaving downtown San José for other cities. A Downtown Parking Board member said she accepted the memo from Anthony Tordillos (Councilmember, District 3) but had serious reservations about staff following council direction. The Downtown Association asked for off-cycle appointments so the parking board can reach a quorum.
• Open forum: three speakers. One said a food pantry that has seen 40% more demand faces a permit-related shutdown within seven days. One complained that loud speakers at interim housing keep residents awake and that city housing staff had ignored complaints for five months. A caller criticized council pay and staff sizes, unanswered emails, and city spending.

• Staff will develop a broader parking and curb management plan and a long-term parking revenue framework, including possibly reducing the parking fund's ongoing contribution to the general fund (adopted item 2 of the memo from Anthony Tordillos (Councilmember, District 3)).
• Staff will bring return-to-source policy options: a framework in a manager's budget addendum during the 2027-28 budget process, with a fuller policy later that fiscal year, per budget staff.
• Staff will report annually to the Downtown Parking Board, cross-referenced to the council, with parking utilization and revenue data (adopted direction).
• Staff and a councilmember said the parking fund will keep running a shortfall under the adopted package; it is expected to be addressed in the 2027-28 budget. Budget staff said the five-year forecast comes out March 1.
• The clerk's office said it is pushing for appointments to the Downtown Parking Board's three vacancies (five applications on file, conflict checks done) so they can reach a council meeting quickly.
• Staff said replacing the aging smart meters, possibly with pay-by-plate virtual meters, would require an RFP; there is no cost estimate or reserve yet.
• David Cohen (Councilmember, District 4) suggested an eventual report to the Transportation and Environment committee on curb and meter utilization data; this was a suggestion, not a council action.
• Economic development staff said they would coordinate with Bien Doan (Councilmember, District 7) on small business assistance data by council district.
• Staff said wastewater commercial paper notes are planned to be issued before October 16, 2026, to refund $90.1 million in outstanding subordinate notes.
• City Hall will light up for On Lok on the evening of the meeting, and in pink for Day of the Girl from October 5 through 9.
• Final map notices on the agenda: Tract 10711 (northeast corner of Camden Avenue and Singletree Way, District 10, 108 condominium townhomes) for receipt; Tract 10633 (4146 Mitzi Drive, District 1, 14 units) proposed for approval.

An informational study session, with no vote, in which city staff and the city's municipal advisor, Fieldman Rolapp, explained two tools California cities can use to pay for public infrastructure that supports development. The first is the Community Facilities District (CFD, or Mello-Roos district). It levies a new special tax, needs approval from two-thirds of voters or landowners, and can be bonded against fairly quickly. The second is the Enhanced Infrastructure Financing District (EIFD). It adds no new tax and needs no vote to form, but it sets aside future growth in property tax, and staff said it can take five to ten years or more before that growth is large enough to borrow against. The presiding officer, chairing, said he asked for the session in his March message, to learn how the tools could support jobs, housing and downtown revitalization. Staff said the session authorizes nothing. What's at stake for residents: San Jose gets about 13.5% of the 1% property tax collected in its area. Staff said that small share limits what an EIFD would raise. Their made-up example of a $10 billion mixed-use development would support about $138 million in city-only borrowing. Staff also said the council policy that governs CFDs that borrow money, last amended in 1993, is out of date. 00:00:47

• The presiding officer said he asked for the study session to learn how infrastructure financing tools could help investment in jobs, housing and downtown revitalization 00:00:47
• City staff stressed that the session is only for information and does not authorize forming any district or structure 00:02:45
• City staff went through the history: redevelopment agencies authorized in 1945, the 1982 Mello-Roos Act creating CFDs, redevelopment agencies dissolved in 2012, EIFDs created in 2014, and EIFDs streamlined in 2019 00:04:48
• City staff explained that a CFD creates a new special tax, while an EIFD funds infrastructure from future growth in property tax without raising taxes 00:06:05
• City staff said a CFD needs two-thirds approval from voters or landowners, while an EIFD needs no vote to form but must go through a set series of public hearings 00:07:06
• City staff said a CFD can sometimes be set up in less than a year 00:08:06
• City staff noted that San Jose already has a Convention Center Facilities District, a special tax paid by hotel property owners that goes back into the convention center 00:08:06
• City staff said an EIFD is much slower, because new property value has to build up before it can be borrowed against, which could take five, eight, ten years or more 00:09:07
• A speaker said, speaking for Public Works, that bonds from a CFD can pay for roads, public parking, streetlights, parks, water and sewer, and flood control 00:12:52
• A speaker said CFDs can fund added services but cannot replace services that existed before the district was formed 00:13:55
• City staff gave a made-up CFD example: 65 units on one acre needing about $5 million of streets, water and sewer work, bonded over about 30 years 00:14:07
• City staff said the example works out to about $4,500 of special tax per unit per year, or about $378 per unit per month once debt service is added 00:15:07
• A speaker said Council Policy 1-14, last amended in 1993, sets a $10 million minimum for the council to consider a new CFD that borrows money 00:15:51
• A speaker said the policy also requires 1,000 single-family homes, a density that may not fit the Envision 2040 general plan, and called the policy out of date and in need of an update 00:15:51
• A speaker said the made-up CFD example would not meet the policy's minimums 00:16:54
• City staff explained that agencies taking part in an EIFD commit all or part of their share of new property tax, either to pay costs as they go or to repay bonds 00:17:06
• City staff listed what an EIFD can fund, including highways, roads, water systems, public safety, civic facilities, parks, site preparation and affordable housing 00:18:08
• City staff said, citing the county controller's figures, that the city's share of new property tax is 13.5%, school districts get 44%, the county 18%, and other taxing entities 24% 00:20:11
• City staff said school districts' share can never go into an EIFD, while most other taxing entities can choose whether to commit their share 00:21:14
• City staff said a made-up $10 billion mixed-use development would, once mature, support about $9 million a year in debt payments from the city's share alone, or about $138 million of bonds over 30 years at 5% interest, and called that yield somewhat modest 00:22:16
• City staff mentioned a state transportation infrastructure loan program that could stretch borrowing capacity further, with conditions attached 00:23:16
• City staff said an EIFD needs a separate public financing authority with a lot of administration and reporting, and can pay costs as it goes, repay developers, or issue bonds 00:24:16
• City staff compared San Francisco, a combined city and county with a single school district that captures about 64 of the yield, with San Jose's roughly 13% share spread among dozens of school and special districts 00:26:19
• A guest presenter explained that under state law an EIFD's public financing authority has five members: three elected officials from the participating bodies and two members of the public who live or work in the district 00:30:13
• A guest presenter described the protest hearing: under 25% protest the district goes ahead, between 25% and 50% an election must be held within 90 days, and over 50% stops it 00:32:17
• A guest presenter clarified that private developers can build market-rate housing inside an EIFD, but housing paid for with EIFD increment or bonds must be affordable 00:34:17
• A guest presenter cautioned that committing the city's property tax share to an EIFD requires weighing the effect on the city's future ability to pay for everyday services 00:35:20
• A guest presenter explained that business owners inside a CFD who are neither registered voters there nor landowners cannot vote on forming it 00:37:22
• A guest presenter described the $10 billion example's bonding capacity as $238 million, after the staff slide had said $138 million 00:40:25
• A guest presenter said timing usually points to using CFDs early in a project and EIFDs later 00:40:25
• A guest presenter said developers benefit because the tools let them borrow at tax-exempt interest rates instead of higher construction-loan rates 00:41:26
• A guest presenter described Sacramento's Aggie Square EIFD, formed in 2021 together with a CFD, where a city policy sends 80% of the increment to infrastructure and 20% to affordable housing 00:43:29
• A guest presenter described West Sacramento's EIFD, formed in 2017 over a little more than 4,100 acres in 14 subareas, which issued bonds in 2025 00:45:30
• A guest presenter described the Placentia EIFD from 2019, a city-county partnership, and the Eastern Coachella Valley EIFD from 2023, both of which will take years to produce usable value 00:46:30
• A guest presenter noted that the Eastern Coachella Valley district covers 91,000 mostly undeveloped acres and includes 20% of the county's increment 00:47:32
• A guest presenter described San Francisco's Treasure Island financing district, formed in 2017 on a former naval station with 8,000 homes and 300 acres of parks, as a success 00:48:35
• City staff suggested questions for judging future proposals, starting with whether the investment enables development that would not otherwise happen 00:49:57
• City staff said the city could set up a policy framework or decision tree ahead of time for ranking projects and deciding how much increment to commit 00:51:05
• City staff said Public Works, Transportation, Finance, and to some extent planning and housing staff took part in working-group meetings on the session 00:52:09
• A speaker asked who pays the costs of issuing CFD bonds and of compliance, and whether the city does 00:53:07
• A guest presenter answered that issuance costs come out of bond proceeds and ongoing administration out of the special tax, so the city does not pay, though those costs reduce borrowing capacity 00:54:39
• A speaker asked whether an EIFD built on the city's share alone would be worth the effort 00:55:44
• A guest presenter agreed that 13.5% is not a big share and said generating only $138 million from such a development may not be worth it 00:56:02
• A speaker pointed to Measure T's success and said going directly to voters seems more practical than these tools 00:56:55
• A speaker said she does not think the tools are appropriate right now, noting that affordable housing does not bring in property tax 00:57:55
• A speaker said the city has a lot of aging infrastructure and must start thinking about how to pay for it 00:59:04
• The presiding officer responded that the tools are not only for affordable housing and may be useful at some specific sites in the city even today 00:59:40
• A speaker asked what income-level requirements apply to housing funded by tax increment, citing a state code section that lists housing for very low to moderate incomes as eligible 00:59:54
• A guest presenter offered to follow up afterward with the specific requirements 01:00:42
• A speaker said he is interested in using tax increment to support mixed-income housing while keeping properties on the tax rolls 01:01:35
• A speaker suggested EIFDs could add to funding for the city's existing alternative housing finance efforts 01:02:58
• A speaker pointed to Google's Downtown West, approved after years of negotiation and then stalled when the market turned, and asked how forming a district would fit with land assembly and negotiations with developers 01:02:58
• City staff said each case would be judged on its own, ideally starting once land is already assembled and there is a clear development plan, and that hotel and sales tax gains could also be considered 01:04:33
• A speaker summed up the council's homework as updating the CFD rules and getting the city ready to move quickly on large projects with assembled land, rather than forming a district now 01:05:58
• A speaker asked whether staff had modeled any particular areas of the city 01:06:34
• City staff declined to discuss specific locations, saying it could distort landowners' behavior 01:07:16
• A speaker asked whether the county took part in Sacramento's Aggie Square EIFD, where the city's share was 22.6% 01:07:58
• A guest presenter answered that Aggie Square is a city-only EIFD, in partnership with Wexford and UC Davis 01:08:30
• The presiding officer asked how the CFD and EIFD work together at Aggie Square, as a possible model for combining the two 01:09:24
• A guest presenter explained that CFD bonds can be issued once phase one is built, and the expectation is that tax increment from that phase will cover the debt payments instead of levying the special tax 01:11:01
• The presiding officer asked what made county participation possible in some examples and what shared benefits might encourage it 01:11:50
• A guest presenter said Riverside County joined in Eastern Coachella Valley because a large undeveloped area needs infrastructure it wants built sooner 01:12:11
• A speaker noted that special districts and water districts, not only the county, can be EIFD partners 01:12:53
• The presiding officer asked whether school districts are left out by practice or by law, and the answer given was by law 01:13:15
• A guest presenter warned that agencies with small shares usually need a bigger partner, and that some agencies elsewhere that formed EIFDs without one now feel their hands are tied 01:13:35
• City staff said the memo shows the county-wide distribution and she can share a breakdown of the other taxing entities 01:15:13
• The presiding officer said San Jose's share seems low for the city's size and services, and asked what drives it and whether reform is possible 01:15:31
• City staff pointed to a state bill adopted last year on EIFDs for commercial-to-residential conversions, and said she would need to research whether it changed the share available to cities 01:16:20
• A speaker said there probably has been no state bill in the last decade rebalancing the shares, only fixes for specific projects 01:17:08
• A speaker confirmed that the 13.5% is a share of the 1% property tax, and asked for a concrete San Jose case where an EIFD would beat a CFD 01:17:48
• City staff declined to name a specific site, saying near-term CFD revenue could build momentum toward a broader EIFD 01:18:23
• A speaker asked what measure the city would use in five or ten years to tell whether a tool delivered the promised benefits 01:19:12
• City staff said that by the end of a district's life the added land value and other tax revenue should be greater than the cost of the investment 01:19:52
• A speaker asked how the long wait for revenue fits with developers needing infrastructure money upfront 01:20:27
• City staff acknowledged, in reply to an earlier question, that the staff time and consultants needed for analysis bring near-term costs and extra workload 01:23:12

• One speaker, on Zoom; the clerk said no one signed up in person. The speaker urged the council to use these tools beyond housing: parks, trails and tree canopy (saying the trail network still has 33 miles to finish), projects that make streets pedestrian-only, and transit-plus-housing projects along East Santa Clara Street, the Stevens Creek corridor and another corridor (name garbled), plus financing to bring BART downtown.

• The study session took no action and authorized nothing; staff said it is informational only.
• A guest presenter offered to follow up with a speaker on the specific income-level requirements for housing funded by EIFD tax increment.
• City staff said she would share the breakdown of the 'other taxing entities' share of property tax (community colleges, special districts and others).
• City staff said she would research whether last year's state bill on EIFDs for commercial-to-residential conversions changed the share of increment available to cities.
• Staff called Council Policy 1-14 on CFDs that borrow money (last amended 1993) out of date and in need of an update; no date was set for bringing an update.
• City staff raised the idea of a city policy framework or decision tree for judging future EIFD/CFD proposals; it was not formally directed.