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Record of Proceedings

San José City Council 2025-2026 Budget Study Session - May 14, 2025

City Council — Wednesday, May 14, 2025
BodySan Jose, California
SessionCity Council
DateWednesday, May 14, 2025
StatusFILED
Video Record
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Transcript — Verbatim
0:13

All right.

0:14

Good morning.

0:16

Welcome everyone.

0:18

Almost broke my gavel.

0:19

All right, there we go.

0:23

All right.

0:23

Hope everybody's doing well.

0:25

So just as a reminder, we are continuing on with our budget study sessions.

0:30

We are in the CSA for strategic support and appointees.

0:36

We were having some conversation about a proposal to tie a portion of council pay to performance.

0:45

I believe we had covered everything else within strategic support and appointees.

0:50

I don't think we had any other questions on that.

0:53

Just to give people quick run of show, whenever we wrap up questions on this topic, we'll close out strategic support, go on to fees and charges, and then close with capital budget.

1:07

And we have allocated up until noon if we if we need it.

1:12

Okay.

1:13

So let's continue.

1:15

I'll pause for a moment to see if we have any other hands for other questions.

1:22

I just want to note for the record, all are present.

1:24

Oh, I'm sorry, did you want to take roll, Tony?

1:26

We can just do that.

1:26

If you want to do your job, I'm sorry.

1:29

I'll just say all are present.

1:31

I just want to say it for the record.

1:33

Okay, for the record, all are present.

1:35

Okay.

1:36

Great.

1:37

And we have a lot of city staff here.

1:39

Welcome everybody.

1:40

Thanks for all the work you do.

1:42

Let's jump in.

1:43

Okay, Councilmember Ortiz.

1:47

Thank you, Mayor.

1:48

Good morning, everyone.

1:49

So this is just for my uh recollection, this is in regards to the pay-per-performance proposal.

1:54

Uh if I could just get it's been a while since our discussion yesterday.

1:58

How is this going to work in practice?

2:00

So I know that we're talking about have putting together a rubric or some sort of methodology to score the council.

2:07

And then what?

2:08

Like, am I just gonna sit here while my colleagues vote to not give me a raise?

2:11

Or what does it look like?

2:12

Honestly.

2:13

No, yeah.

2:14

Thanks.

2:14

I mean, the idea is to model what we already do for our appointment for our appointees and for and what our appointees do for their senior staff for deputy city managers and for department heads.

2:26

We've given direction as a body in the last couple of budget messages around being crisper about goals, metrics, and pay for performance for our appointees and senior staff.

2:38

Um there's a debate, obviously, we can have about whether or not that's appropriate to apply to us as the council.

2:45

I I'm proposing that we that we do with with uh tying just five percent of our salary to measurable progress.

2:51

The process wise, I think the infrastructure is largely there.

2:55

This is a we're we're a city that's been very data-driven for years in the sense that um we do a lot of measurement and data collection.

3:03

Um the nice thing about the scorecards and dashboards that we've built out is that they give us a sense of prioritization, and the proposal would be to say within whatever our priority areas are.

3:15

We we've called them our focus areas, but that's just a term of art for the council.

3:19

That could always that could evolve.

3:21

There's nothing in stone here.

3:23

But um essentially within those five focus areas, we have outcome goals for the community that frankly we can't directly, we can't just directly change, like crime rates or levels of homelessness.

3:37

So it wouldn't really be reasonable to tie anyone's pay, ours or the city managers or department heads to that outcome goal.

3:44

But one level below in all of our dashboards, we have what we call our performance measures, which are where really we as decision makers and um implementers work together to prioritize the programs and policies that we think will have the biggest impact on those outcomes.

4:03

We agree on how we measure the success of those programs and policies.

4:07

We use the budget process to allocate resources and make trade-offs collectively, and through a majority vote of the council, we all decide okay, these are the programs we're gonna fund.

4:18

Here's how we measure success, and we believe these are the best uses of resources to help deliver that outcome, move us closer to a safer city, a housed city, more affordable housing, a cleaner city, more jobs.

4:33

And so the idea would be to take those performance measures and have the city manager after the close of the fiscal year come to us in the fall with a uh a readout, just like a city auditor report would uh show us show us the math.

Discussion Breakdown — Share of Meeting
Budget Process████████████████████████████████32%
Public Works████████████12%
Public Safety██████████10%
Homelessness█████████9%
Fee Waivers█████████9%
Personnel Matters████████8%
Municipal Finance█████5%
Procurement Policy█████5%
Fee Calculation███3%
Summary of Proceedings

San José City Council 2025-2026 Budget Study Session - May 14, 2025

This study session, held from 9:15 AM to approximately noon, continued the council's review of the proposed 2025-2026 operating budget, focusing on strategic support (including a proposal to tie council pay to performance), fees and charges, and the 2025-2027 biennial capital budget. No public comments were made. No formal votes were taken.

Strategic Support: Pay-for-Performance Proposal

  • Mayor Matt Mahan proposed tying 5% of council members' base salary to measurable progress on citywide performance metrics, modeled after existing pay-for-performance for city appointees. The city manager would bring a rubric in the fall.
  • Councilmember Peter Ortiz questioned how it would work in practice, expressing concern that a collective metric could dilute advocacy for underrepresented districts like District 5.
  • Councilmember Pamela Campos asked what problem the policy solves, stating it may undermine diverse viewpoints.
  • Councilmember David Cohen argued the policy could create perverse incentives, harm democratic governance, and was unnecessary given electoral accountability.
  • Vice Mayor Pam Foley and Councilmember George Casey supported the proposal, with Casey noting it would demonstrate accountability to constituents.
  • Councilmember Domingo Candelas raised a letter from the county opposing the city's "responsibility to shelter" policy, sparking debate about county partnership and homelessness response. Mayor Mahan defended the city's approach.
  • Councilmember Carl Salas supported the mayor, calling the homelessness situation a crisis requiring triage.
  • No council decision was made; the item was discussed as a budget proposal.

Fees and Charges

  • Staff presented the proposed 2025-2026 Fees and Charges Report. Councilmember Mahan noted large percentage increases in the commercial linkage fee application (51%) and cannabis initial fee application (144%). Housing Director Eric Solivan explained the increases resulted from updated time studies and full cost recovery adjustments.
  • Mayor Mahan urged digitization and automation of fee calculations to reduce costs and barriers.
  • Councilmember Campos asked about fee waivers for child care providers and small businesses. Staff cited existing hardship programs, phased increases, and discounts for nonprofits.
  • Councilmember Michael Mulcahy questioned whether increased planning fees corresponded to enhanced service. Planning Director Chris Burton confirmed staffing levels are adequate but may require rapid expansion if demand spikes.
  • Councilmember Rosemary Kamei clarified that library late fees for adults, waived temporarily last year, would be proposed for permanent elimination via a Manager's Budget Addendum.
  • No formal action was taken.

Capital Budget Presentation

  • Jennifer Tell (capital budget coordinator) and Public Works Director Matt Lesh presented the 2025-2027 Proposed Biennial Capital Budget and 2026-2030 Capital Improvement Program (CIP). The five-year CIP totals $3.4 billion, with $1.2 billion budgeted in FY 2025-26 and $676 million in FY 2026-27.
  • Key funding sources: financing proceeds ($864M), other agencies ($644M), taxes/fees ($572M), and beginning fund balance. Measure T funds are expected to be exhausted by FY 2028-29.
  • Major investments: water pollution control and traffic programs each about 25% of CIP; airport nearly 15%; parks and community facilities 12%.
  • Councilmember Campos asked about a declining housing facilitation metric (8.6% resident satisfaction with affordable housing facilitation). Housing Director Eric Solivan said metrics are being revised toward outcomes; more detail will be provided in a forthcoming Manager's Budget Addendum.
  • Councilmember Kamei inquired about the decrease in the total CIP compared to last year. Staff attributed it to the preliminary nature of the proposed budget, with carryover funds expected to increase after year-end cleanup.
  • Councilmember Salas praised the department's work on essential but often invisible infrastructure.
  • No votes were taken.

Key Outcomes

  • No formal decisions or votes were recorded; the study session was informational and allowed councilmembers to ask questions and express views.
  • Staff will provide additional information on housing metrics and performance measures via a Manager's Budget Addendum.
  • The pay-for-performance proposal remains under consideration, with the city manager expected to present a rubric in the fall.
  • The council will continue budget discussions at future meetings.

Meeting Transcript

All right. Good morning. Welcome everyone. Almost broke my gavel. All right, there we go. All right. Hope everybody's doing well. So just as a reminder, we are continuing on with our budget study sessions. We are in the CSA for strategic support and appointees. We were having some conversation about a proposal to tie a portion of council pay to performance. I believe we had covered everything else within strategic support and appointees. I don't think we had any other questions on that. Just to give people quick run of show, whenever we wrap up questions on this topic, we'll close out strategic support, go on to fees and charges, and then close with capital budget. And we have allocated up until noon if we if we need it. Okay. So let's continue. I'll pause for a moment to see if we have any other hands for other questions. I just want to note for the record, all are present. Oh, I'm sorry, did you want to take roll, Tony? We can just do that. If you want to do your job, I'm sorry. I'll just say all are present. I just want to say it for the record. Okay, for the record, all are present. Okay. Great. And we have a lot of city staff here. Welcome everybody. Thanks for all the work you do. Let's jump in. Okay, Councilmember Ortiz. Thank you, Mayor. Good morning, everyone. So this is just for my uh recollection, this is in regards to the pay-per-performance proposal. Uh if I could just get it's been a while since our discussion yesterday. How is this going to work in practice? So I know that we're talking about have putting together a rubric or some sort of methodology to score the council. And then what? Like, am I just gonna sit here while my colleagues vote to not give me a raise? Or what does it look like? Honestly. No, yeah. Thanks. I mean, the idea is to model what we already do for our appointment for our appointees and for and what our appointees do for their senior staff for deputy city managers and for department heads. We've given direction as a body in the last couple of budget messages around being crisper about goals, metrics, and pay for performance for our appointees and senior staff. Um there's a debate, obviously, we can have about whether or not that's appropriate to apply to us as the council. I I'm proposing that we that we do with with uh tying just five percent of our salary to measurable progress. The process wise, I think the infrastructure is largely there. This is a we're we're a city that's been very data-driven for years in the sense that um we do a lot of measurement and data collection. Um the nice thing about the scorecards and dashboards that we've built out is that they give us a sense of prioritization, and the proposal would be to say within whatever our priority areas are.

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