It is 1 30.

We're going to call the meeting to order.

So today, before we begin, I want to remind the public safety, finance, and strategic support committee members, a member of the public to follow our code of conduct at meetings.

This include commenting on specific agenda item only and addressing the full body.

Public speaker will not engage in a conversation with the chair, council member, or staff, all members of the public safety finance and strategic support committee.

Staff and the public are expected to refrain from abusive language.

Repeated failure to comply with the code of conduct, which will disturb, disrupt, or impede the orderly conduct of this meeting, may result in removal from the meeting.

This meeting of the public safety finance and strategic support committee will now come to order.

Can the clerk office please roll call?

Tordillos.

Here Casey.

You have a quorum.

Thank you very much.

So I just want to welcome Councilmember Tordia's on his first uh PISBIS meeting.

And hopefully he'll he'll be here with us and then contribute to our committee.

So we'll go straight down to the work plans.

There's nothing there, nothing on the consent calendar.

We do have a report from committee, item number one, fourth quarter financial report for fiscal year 2024 and 25.

Maria Oberg and KNU Sun will be uh giving us a presentation.

Good afternoon, Chair, members of the committee, members of the public.

I am Maria Oberg.

I am the director of finance, and before you today you have our quarterly report.

We will, as always, only present the investment slides because that's the only ones that are required to be presented twice a year.

So let me get to those.

For those of you are very fairly new to this, it's important for you to keep in mind that the city can only invest in highly rated fixed income securities.

So when you look at our yield, don't confuse it with the stock portfolio.

We are not investing in stocks.

The investment policy is reviewed annually, was last adopted by the council in March 11th, 2025.

And it is also audited semi-annually for compliance purposes.

The goals of our investments is to meet the objectives of safety, liquidity, and yield.

Safety means that we don't invest in anything that can lose significant value.

Liquidity means we have money available to meet our obligations, and yield is to earn a market rate of return.

As of June 30, 2025, our portfolio was just shy of three billion dollars at 2.98 million or billion.

We earned an interest yield over the year of 3.805%.

So again, we're not stocks, so don't compare it to that.

Weighted average maturity is 560 days, which is about a year and a half.

We invest on the short end side of the curve up to five years, and the fiscal year to date net income recognized as significant, it's close to 96 million dollars.

We had no exceptions to the policy this quarter.

This graph shows you a very high-level overview of the type of investments we hold.

As you can see, the majority are held in U.S.

agencies and U.S.

treasury securities.

And by fund, most of the monies naturally are the general fund, but we also invest monies for the special revenue funds, such as airport, clean energy, housing, and others.

General fund balances increased by 275 million as of June 30th.

That's due to the receipt of property taxes.

And you will see in the next couple of slides that we have a very spiky cash flow pattern with bulk of property taxes being received in June and January, and then in the summer months is when we mainly spend money due to retirement prefunding and debt service.

We have to have a statement in our policy, assuring that the projected investment maturities, cash, and revenues are sufficient to cover anticipated expenditures for the next six months, and we do.

That's a rolling two-year effective yield, and also the LAFE, which is the state of California's local agency investment pool.

And those are a little shorter in maturities usually than us, which means that they take advantage of increasing interest yields in the shortened much faster than we do.

And consequently, when yields go down, they also take those losses quicker than we do, or not losses, but the reduction in interest rate.

The investment strategy for the next quarter continue to match known expenditures with suitable investments, mainly in the 24 month horizon.

We will also extend a portion of the portfolio beyond the two-year term when appropriate to provide income and structure to the portfolio.

We'll continue to be diversified and of course focus on the core objectives of safety, liquidity, and yield.

And with that, that ends my presentation.

Happy to answer any questions.

Well, thank you, Maria, for the presentation.

Do we have any public comments?

Yes, we do.

We have 10 speaker cards.

Can the following speakers please sign up along the stairs in front of the podium?

The verse the first available speaker can walk up to the podium to speak.

You'll each have two minutes.

The timer is displayed on the projection.

Drusy, Dina, Alex, Musa, Greg.

This one has no name.

Noble, Shana, Philip, and Serena.

Thank you.

At a city council meeting in April, council member council member Ortiz directed finance director Oberg to investigate the city's investment portfolio for ethical concerns after we mobilized to raise concerns about war profiteers, caterpillar, alphabet, and Microsoft.

The city has over $50 million invested in these corporations, which are directly involved and involved in Israel's genocide against Gaza.

We were directed to attend this city council meeting as the follow-up from that.

I'm disappointed to hear that those investigations on the city's investment portfolio were not presented to the council members today, but we are still here to mobilize and raise that concern and express our support for divestment in line with the city's ethical investment policy and also to push to divest from those corporations.

Thank you.

Thank you.

Next speaker.

Hello, my name is Ali.

I, along with nearly 2,000 other people, have signed a petition demanding that the city council divest from caterpillar, Alphabet, and Microsoft.

These three war profiteers make up just about 2% of our city's investment portfolio.

By divesting but divesting from them would be a meaningful act of socially responsible and ethical investing.

San Jose has done this before.

In 1985, our city council voted to ban investments in any company doing business in apartheid South Africa and establish a quote, South Africa-free restriction on the city's investment portfolio.

This directly counters any false notion of there being a bylaw that prohibits San Jose City Council from passing resolutions related to foreign policy matters.

More recently, in 2020, City Council passed a resolution to amend its to amend its investment policy so that our city would divest from fossil fuels and reallocate that money to prioritize investments in renewable energy, clean tech, and sustainable communities.

This shows that you share our values, that money should be used to build societies and not destroy them.

Our city has a proud history of being a leader in the struggle of justice and freedom for all people.

We invoke these precedents and urge you to have to divest from our part-side Israel and its genocide against Palestine.

Let's build upon our city's legacy and demonstrate how cities across the country can materially support the people of Palestine and put and pressure Israel to agree to a permanent ceasefire and end the genocide.

Represent us by introducing and passing a divestment resolution when the city's investment portfolio comes up for your vote in March.

Thank you.

Thank you.

We have two more cards for, I believe it says Anzu and Timothy.

Thank you.

Thank you, committee members.

My name is Dina Saba.

I'm a Palestinian American and a longtime resident of San Jose.

I live in district six.

What Israel is doing in the occupied Palestinian territories, Gaza, West Bank, and East Jerusalem is genocide.

It's apartheid, war crimes, and crimes against humanity.

You name it, they're doing it.

And divest from war profiteers, Caterpillar, Alphabet and Microsoft.

Although investments in these companies is a small amount, about two percent in the San Jose's investment portfolio, it is still investments supporting genocide, the mass slaughter of over 20,000 children, and intentional starvation by Israel, and that is a thousand percent unacceptable.

I don't want my beloved city's investments supporting the mass slaughter of my family and my people.

We must be a city that upholds our values, cherishing human life, justice, and freedom for all.

Why would we want to continue to associate with and investing in genocide?

What is preventing the city?

What is preventing the city council from by divesting from genocide?

Thank you.

Thank you, next speaker.

Hello, my name's Alex.

I'm a laborer.

I just come here to uh to say that our city has a proud history of being a leader in the struggle for justice and freedom for all people.

And in 1985, San Jose's city council voted 10 to 1 to ban investments in any company doing business with apartheid apartheid South Africa.

I would like for us to continue taking on that stance as a city.

Uh I know that we have a subcommittee made of very diverse group.

Uh somebody who was from my mother was from Iran, somebody who was from uh the Philippines and Vietnam, uh, and it's lovely to see and I like to for you to all think on your cultural background, your heritage, your family, your friends, and I want you to think of them as you choose which companies you'll invest in, and which companies you'll work with.

And I urge you to not work with Caterpillar, don't work with Microsoft.

These people are funding this genocide in Gaza.

Well, they're doing more than funding.

Uh they're adding their technology.

They're adding their uh bulldozers, and so I urge you divest.

Divest from genocide.

Thank you.

Thank you, next speaker.

Hello.

My name is Nobel Muschak, and I'm here calling on San Jose to divest from Wolfatio's Caterpillar, Alphabet, and Microsoft.

Investments that amount to about 2% of San Jose's investment portfolio.

Continuing to invest in these companies, close the value of this city because all three of these companies are complicit in the genocide of the Palestinians.

Caterpillar is complicit because they sell heavy machinery to the Israeli military, which the military uses to demolish Palestinian homes and build illegal settlements in the West Bank.

Microsoft is complicit because they have a 107 million dollar contract with Albert Systems, which uses Microsoft Azure to run one sim.

The training software Israeli occupation forces use to mimic battle scenarios.

Essentially training people to mortal Palestinians.

Alphabet is complicit because they are one of the windows of a 1.2 billion dollar contract called Project Nimbus, meaning they are one of the sole cloud providers to the Israeli government and military.

And they use this technology to surveil Palestinians and target them for assassinations.

By investing in all three of these companies, this city is complicit.

As the money this city invests into these companies is used to fund genocidal activities.

Divestment from companies is not just a theory, but it's happened in the past.

In the 1980s, many American cities and schools, including San Jose, across the country divested from South Africa under a strict racial apartheid.

The Bay Area was a key part of this divest movement with both UC Bugley and San Jose divesting billions from companies doing business in South Africa in the late 80s.

This divest movement was a key contributor to the economic isolation that ultimately resulted in the end of a poetide.

Today we face a similar urgent crisis: the genocide of the Palestinians.

San Jose must make the choice to be on the right side of history.

Drop these investments in Caterpillar, Microsoft, and Alphabet, and drop this complicity in the ongoing genocide.

Thank you.

Thank you.

We have one more speaker card for Vicky.

Okay.

Okay, cool.

Hi, my name is Musa with Kerr, the Council on American Islamic Relations, and we are here to echo our friends in urging the city of San Jose to divest from climate destruction and war profiteering.

Last week, among the many documented atrocities of the Israeli occupation, there was a video of an 11-year-old Palestinian girl in Jabalia walking by carrying water for her family.

In a mere moment, an Israeli drone bomb was dropped on her, killing her instantly.

This is one of too many incidents of bombs intentionally and directly being dropped on the heads of Palestinian children.

Since October 2023, Israel has killed more than one child every hour.

Israel has dropped over 10,000 tons of bombs on Gaza, the equivalent of seven nuclear bombs on a population trapped in an area the size of the city of San Jose.

A recent report using internal Israeli intelligence data showed that 83% of those killed in Gaza were civilians.

This has overwhelmingly been a war on innocent men, women, and children.

According to San Jose's quarterly investment report, over 50 million of city funds are invested in companies linked to Israel's genocide against Palestinians.

Our money should build communities, not fuel destruction and genocide.

Yet Caterpillar, Alphabet, and Microsoft provide the tools for Israel to commit these war crimes.

And by keeping investments in these companies, the city of San Jose is complicit in the killing of children and the destruction of Gaza.

So again, we urge you to ensure that San Jose taxpayer dollars and public funds are not used to fund war crimes, genocide, and climate destruction.

Thank you very much.

Thank you, next speaker.

Good afternoon.

My name is Shayna.

And I, along with nearly 2,000 other people, have signed a petition demanding that you divest all city funds from Israel's genocide against Palestine.

All of you sitting up here are politicians.

Tell me, what other issue can mobilize people like this.

What other issue do you see 20 or so people who have jobs, who have families, decide to not take their paycheck for the day and instead show up here to our leaders and demand that you listen to us to divest only two percent of the budget.

It can make a huge impact, as my um associates have mentioned.

And Maria, I am so glad that you are here today.

It is so great to be able to speak with you.

I know you have an incredible background, and you've done a great job leading the city through our investments.

Surely you can find a way how we can divest our money from only two percent.

Microsoft, Caterpillar, Google.

We cannot allow ourselves to uh fund these war profiteers.

Over 50 community organizations, 50, 5-0, nonprofits, and small businesses have also endorsed the petition.

The diverse and multicultural communities of San Jose refuse to be complicit in genocide and demand that our city practice socially responsible and ethical investing.

I urge you to exercise your leadership and stand with your constituents by introducing and passing a divestment resolution when the city's investment portfolio comes up for your approval in March.

And you'll be sure to see us there in March as well.

We are a strong group.

We are mobilizing.

Don't let our voices be silenced.

Thank you, next speaker.

My name is Greg Miller.

I'm um resident of San Jose, and I'm um, you know, appalled every day when I see the destruction that's happening in Gaza.

And I understand that the bullets and bombs and the caterpillar uh bulldozers that are destroying houses there are all provided or there with the help of the United States government.

We we fund this war.

Okay, we have to take responsibility for it.

And um, so I think San Jose has a role to play.

All local governments is uh um, you know, you can't say that just because this is a national issue that you can't take some kind of position on it.

Um I'm calling on San Jose to divest from the war profiteers, caterpillar, alphabet, and Microsoft.

These investments amount to only about two percent of San Jose's investment portfolio.

So the benefits of divesting 2% outweigh the inconvenience caused by being financially tied to these companies.

Continuing to invest in these companies breaks public trust and corrodes the values of this city as a public service institution.

Other Bay Area cities like Hayward and Richmond have already taken the courageous step of divesting with Richmond voting to divest nearly 7% of its portfolio due to these companies' ties with Israel's genocide.

I urge you to demonstrate your leadership and moral fortitude by joining their lead.

And uh I also have heard recently that there are studies have shown, you know, you keep hearing 60,000 people have been killed by Israel in Gaza over these past two years.

Thank you.

Your time is up.

Next speaker.

Hello, city council, council members and staff.

My name's Philip.

I am an alumni of San Jose State University.

I also work in San Jose and I'm also an SCIU 521 steward.

I'm also a member of San Jose Against War.

And I'm here to say, according to the most recent uh City of San Jose's quarterly investment report, over 50 million dollars of our city funds are invested in corporations with direct ties to Israel's genocide against Palestine.

Uh, that being Caterpillar, Alphabet, and Microsoft.

That's that $50 million dollars is just 2% of the city's investments.

And with that investments, we're uh enabling these companies to provide equipment and services and contracts that Israel has been used to commit war crimes against Palestinians.

Divestment is an effective way to demonstrate how cities across the country can materially support the people of Palestine and pressure Israel to comply with international law.

I urge you to introduce and pass a divestment resolution when the city's investment portfolio comes up for your approval in March.

We will be there.

Thank you so much.

Thank you.

We have one more card for Zaha.

Good afternoon, committee.

My name is Timothy Sampson, and I live in San Jose District 3.

I've been a resident of San Jose for about three years, and I am a math tutor and radio frequency technician by trade.

Therefore, as a conscious and tax-paying resident of San Jose, I'm disappointed to learn that this council has upwards of 50 million dollars in investments in companies complicit in the ongoing genocide and ethnic cleansing of Palestinians, which my tax dollars pay for.

I'm calling on San Jose to divest from the company's Caterpillar Alphabet and Microsoft.

These investments amount to only about 2% of San Jose's investment portfolio.

The Israeli military routinely uses caterpillar bulldozers to demolish Palestinian homes, public buildings, roads, commercial properties, agricultural land, and other civilian infrastructure.

Since December, caterpillar equipment has been systematically destroying civilian buildings and other property alongside the Gaza Strip border, creating a half a mile-wide buffer zone over roughly 16% of the strip's area.

In May 2021, Google and Amazon won the bid for Project Nimbus, a shared 1.2 billion dollar contract to be the sole cloud providers for the Israeli government and military.

Israel uses these AI systems developed by Microsoft and Alphabets who assume the responsibility of targeting airstrikes on Palestinians and forego all human accountability for targeting decisions and for Palestinian deaths.

To date, there are over 60,000 confirmed killed, most of them women and children, and countless more injured, missing and displaced in as a result of Israel's unrelenting bombardment and invasion of the besieged Gaza Strip.

Our city has a proud history of being a leader in the struggle for justice and freedom for all people.

In 1985, San Jose City Council voted 10 to 1 to ban investments in any company doing business in apartheid South Africa and establish a South Africa free restriction on the city's investment portfolio.

We invoke this precedent and urge you to divest from apartheid Israel and it's genocide against Palestine.

Thank you.

Thank you.

We have uh more speaker cards for Lisa, Allegra, last name Myers, and one with no name.

Thank you.

Well, Council Moders.

Uh, my name is Anzu, and I am calling to divest for more profiteers, Caterpillar Alphabet and Microsoft.

In 2020, the city of San Jose passed a resolution to amend its investment policy so that our city would divest from fossil fuels and reallocate that money to prioritize ethical investments.

This effort shows that our city shares its constituents' values.

Money should be used to build societies, not destroy them.

As our representatives, we urge you to follow this precedent and divest our city funds from war profiteers complicit in genocide.

I urge you to demonstrate your leadership and moral fortitude by joining our lead.

Thank you.

Thank you, next speaker.

Good afternoon.

My name is Vicky, and I'm from, I live in South San Jose.

Um I'm here today to call on you to show us some leadership on this.

Yeah.

Um I'm here to ask that you divest from Caterpillar Alphabet and Microsoft.

And we need to call this what it is.

It's a genocide, and we need to not be complicit in our actions.

And history is gonna hold us accountable.

Thank you.

Thank you.

We have one more speaker card for Alana.

Um, hello, my name is Jung.

Um, due to the time limitations, I will uh speak only about uh Microsoft's uh particular role.

In recent reporting by The Guardian, uh the commander of the Israeli military surveillance unit unit 8200 met with Microsoft CEO.

And as a result of the meeting, Microsoft created a customized and segregated area of their cloud storage platform to accommodate the storage of one million phone calls per hour, surveilling the population of Gaza and the West Bank.

This is mass surveillance by of the military of the Palestinian population by the Israeli military.

This is apartheid clear and simple.

Microsoft and Microsoft employees and Google employees are risking their jobs, and some of them have already lost their jobs by speaking out against their employers' role and come in the genocide.

We surely have as much courage as they do.

We need to wash our hands of this blood money.

Thank you.

Thank you.

Next speaker.

Hi, my name is Zaha.

I'm a pediatrician here in San Jose.

I think we all know the numbers.

I think we know who's which companies are involved, which companies need to divest.

That's just Microsoft.

50,000.

50,000 children have been killed so far.

It doesn't matter what your ethnicity is, what your religion is, it is right versus wrong.

It is, it is something that needs to be stopped.

You know, if enough people had done something, you know, in the 1940s during the Holocaust, there wouldn't have been a Holocaust.

This is our time to act.

You know, we have the internet.

We all see what's happening.

We it's not that we don't know.

You know, our country is actively supporting and allowing this.

And the Israelis themselves are, you know, going against their government to stop this.

You know, we we have to do something.

If we don't, if those of us don't know enough, read about what's going on.

You know, if you're on the other side and you believe in the Israeli cause, I think I think you know wanting uh human rights and advocating that is more important than any any other issue, you know, because we are all human beings.

Thank you for your time.

Thank you.

Next speaker.

Hi, my name is Alana Wagner.

I am a resident of Santa Clara County.

Um, I call on you to divest from the perspective as an American Jew whose family managed to escape the Holocaust, some being the only sole survivor of that.

My own grandmother, who at 16 escaped Germany after being removed from their home, managed to find the will within her, even though she refused to ever talk about it because it was so traumatizing of an experience to protest the Vietnam War, and divesting is a very powerful message to everyone, to other cities around us, to the country itself.

We are a big city of San Jose of over two million people, and that would send a very powerful message.

Over the past two years, um, I have seen much of the stories that I have been told by my family being reflected in what I have seen Palestinians saying is happening to them, and it is disturbing in its similarity of the ethnic cleansing of people being removed from their homes, and now at a um stage five famine, the starvation as well.

Um so I call on you to divest to send this powerful message to everyone.

Um, and thank you.

Thank you, next speaker.

I apologize in advance if I stutter during this.

Hello, my name is Cal Myers.

I am a 17-year-old constituent of Council Member Michael McKay.

I'm sorry if I pronounced it incorrectly.

As the observant of you may have noticed, that means I should probably be in school right now, and you're correct.

I am missing my fifth period government class to do this, I will look lend high school.

The irony of missing a government class to participate in government is not lost on me.

However, many students like me in Palestine do not have that right to simply attend their classes.

As per the Palestinian Ministry of Education, over 18,000 Palestinian students have been killed, and this number does not include those still lost underneath the rubble.

So today, now what does a city over 7,000 miles away from this conflict have to do with this?

It is because our city has over 43 million dollars invested in companies providing arms and military technology to the Israeli military.

Over 17 million dollars, over 17 million of our tax dollars are invested in Caterpillar Inc., a company which manufactures armored bulldozers for the IDF, which have been used to destroy homes in Gaza, kill American citizens like Rachel Corey, and enforce apartheid in the West Bank, an apartheid which has been considered such by numerous human rights groups, including MC International, including Amnesty International, Human Rights Watch, multiple Israeli organizations, the ANC, and multiple UN reporters and more.

As far as I'm aware, none of you are human rights lawyers, so I please ask you to take the opinions of those who are experts in this in their field on this issue and to believe them.

Perhaps I am wrong on that issue, but as far as I'm aware, none of you are human rights lawyers.

There is on top of this, sorry, this is what I forgot.

In 2024, the ICJ found that the Israeli occupation of the Palestinian territories violated Article 3 of the International Convention on the Elimination of All Forms of Racial Discrimination, meaning Israel legally under international law is either is either committing racial segregation, apartheid, or both.

Both.

And Caterpillar is helping with this.

Along with Caterpillar, we also thank you.

That's your time.

Next speaker.

Hello, um, my name is Allegra Watson, and I'm a constituent of District 9 in San Jose.

I'm calling on city council members to divest $50 million in San Jose's portfolio from corporations directly supporting an ongoing genocide in Palestine.

Caterpillar, Alphabet, Microsoft, they all supported Israel's genocide with their services and products, and by investing in these companies, you are also complicit in the genocide.

People in Gaza are suffering a horrific reality due to Israel's horrific campaign of forced starvation, bombing, chemical weapons, targeting children with snipers, torture, targeting everyone, even men, and destruction of all life-sustaining infrastructure in Gaza.

San Jose has a moral standard to uphold, and at this stage of the genocide, it is the bare minimum to divest from corporations who knowingly support Israel's genocide.

By investing in these companies, the city of San Jose also has blood on its hands.

Divest from companies that profit from death and pass a divestment resolution in March.

Thank you.

Thank you.

We have one more speaker car with Noni.

Okay.

Hello, good afternoon, San Jose, San Jose City Council members.

My name is Lee Sadikari from District 3.

Congratulations, by the way.

What happens in Palestine is directly connected to San Jose.

It is our tax dollars that are funding Israel's genocide and occupation, and it is American companies helping carry out these war crimes.

People in Gaza are pulling out bomb debris with made in USA written across it.

And it is Israeli Americans who are stealing people's houses in the West Bank.

My dear friend's sister's house was demolished a couple weeks ago.

They were a young family of six, and they were given 10 minutes to evacuate.

When you get home, set your timer for 10 minutes and see what you can grab, because literally they have the timer going on the family.

We should not fund any company complicit in illegal activity here or abroad.

Please divest from Caterpillar Alphabet and Microsoft.

I would also like to just show you here.

This is what it looks like to.

Oh, sorry, this is what it looks like to have your house demolished.

Um my friend just sent me these pictures two weeks ago.

His family with their four small kids were outside watching everything that they owned.

Family heirlooms, everything they owned torn down.

This is directly related to San Jose because these are my friends who I care deeply about.

And for many of us here, we have friends and family who are dealing with this and we see it every day.

So this is related.

Please divest.

Thank you very much.

Thank you, next speaker.

Hi, uh good afternoon.

My name is Serena.

I'm a uh resident of District 6.

Um, I'm also with San Jose Against War.

Um, I'm here with everyone who opposed the genocide and uh urge you to divest.

And I, along with nearly 2,000 people have signed the uh divestment petition.

Um, every day when I drive to work, I listen to the radio, and I hear about the purposeful starvation invasion uh into Gaza now and um destruction of the West Bank.

So I'll just read you some headlines from Democracy Now.

Um Israel calls up to 6,000 reservationists as it begins Gaza City invasion.

Israel approved settlement, splitting West Bank in two and further dooming Palestinian state.

State Department fire officer who expressed condolences for journalists killed by Israel in Gaza.

I just want to die.

Desperate med student in Gaza sends messages.

This is really horrific, and um we should divest.

So let's do it.

Thank you.

Thank you, next speaker.

Hello, my name is Fu.

I'm from District 7.

I'm calling on San Jose to divest from war profiteers, caterpillar alphabet, and Microsoft.

These investments amount to only about 2% of San Jose's investment portfolio.

So the benefits of divesting 2% outweigh the inconvenience caused by being financially tied to these companies.

Continuing to invest in these companies breaks public trust and corrodes the values of the city as a public service institution.

Utter Bay Area cities like Hayward and Richmond have already taken the courageous steps of divesting, which Richmond is voting to divest nearly 7% of his portfolio due to his company's ties to Israel's genocide.

I urge you to demonstrate your leadership and moral for you by joining early.

And I also wanted to talk about the um Columbus Park neighborhood this sweeps this week.

Um that was sorry this week.

I received an email from Mayor Matt Mahan about how they were doing these sweeps because um because the because the homeless people there, the homeless people there were causing fires and violence, and that they were offering beds indoors for him.

And I just want to say that I don't think that should be the only solution for the people that were living in Columbus Park, as those people had um personal items, their RVs, and that and that they shouldn't have only the options of having beds indoors because um because they may not find that living situation um compatible.

So I would want you to stop the sweeps and to and to corroborate with Mayor Mahamahan on another solution for them.

Thank you.

Thank you, next speaker.

Back to the committee.

Well, thank you to all the speakers.

Um, we're gonna go to our council member.

We're gonna go to Councilmember Rosemary Kameh.

First, I'd like to thank all of the speakers who came out who took time out of their day working or whatever you were doing to to be here to give us your message.

Um today we are here as an update to the fourth quarter report.

Some of you did mention uh the time frame of March, and so I was gonna ask um uh our director whether that is an appropriate time in terms of making any decisions.

Today we don't sit as a council, a full council, and only the full council is able to make uh those kinds of decisions.

So I was just wondering there was reference to March as a time frame, and uh wanted to see.

This is a council policy.

Um, so March is when we take it for the annual approval.

So that would work as a timeline.

Um, but you also have the discretion to bring direction to us sooner than that.

Um it is your policy.

Okay.

Um but normally that is the time when all of those investment policies come to us.

That is correct.

It provides for a very orderly method of doing it.

We'll need to do some research.

It's not as easy as just selling whatever we hold because we have to be considerate that we don't lose money.

Again, it's taxpayer money, and um we we need to make sure that we do it in a very methodical way.

Um, there are other considerations.

Um, if we start cherry pick certain corporations, you know, how do we expand it to make sure that everyone's values are heard?

Um it can be done.

It's the council's prerogative.

I also want to say that um corporate notes are a good investment for our portfolio.

It does provide more income.

Um, this is one of the few areas for the city that we can make money for the public without levying a fee or charging them a tax.

So if we move away completely from corporate notes, that would put our investment as a slight disadvantage.

But again, it's a council consideration as part of the policy, but those are some of the things we would want to really think through when we revise the policy.

Okay.

So I would like to move acceptance of the fourth quarter report, cross-reference it to the city council.

But I also would like to add having staff take a look at um at the appropriate time uh in the March time frame to be able to uh well you'll have enough time to be able to uh see what the trade-offs are and and allow us to, as a full council make a decision.

Second.

Thank you.

We move the motion and we have a second.

Let's vote.

That passes unanimously.

Thank you.

All right.

So that will be coming back at the at the time frame that was specified uh earlier in terms of uh the sort of the March time frame.

I believe so.

So we're gonna go ahead and move forward to the item number two, procurement uh audit report that would be by Joe Royce, Alison Pauly, uh Iwood, Hayder, Maria Olberg, and Albi Udam.

Good afternoon, council members.

Uh I'm Joe Royce, the city auditor.

I'm here with Alison Pauly and Howard Heider from my office to present the audit of procurement.

The city should review its risk strategy, performance measurement, and guidance to improve the procurement process, also in the box of Maria Oberg and Albie Udom from Finance Department.

Um I'm gonna turn it over to Allie to kind of walk through uh the background and the results of our work.

Hello, I'm Alison Polly.

I'm a supervising auditor with the office of the city auditor.

I'm gonna start with a short background.

Procurement is a critical city function for obtaining goods and services.

The finance department's purchasing division oversees many types of procurements with the exception of consulting services and public works projects.

While there have been some changes in recent years, the timeliness of procurements remains a concern citywide.

The objective of our audit was to assess the efficiency of the city's procurement process for goods and services, excluding public works projects.

Our audit had three findings.

The first finding is that reassessing risk strategies in key areas could improve procurement timeliness.

Every procurement comes with risks.

The city administration is responsible for balancing the risks of procurement with the business needs of departments.

Forty five percent of surveyed city fiscal officers and contract managers reported that their procurements were not completed in time to meet their department's business needs.

Purchasing's expectation is that requests for proposals or RFPs take between six and nine months to complete.

However, three-quarters of RFPs handled by purchasing between 2019 and 2024 took longer than that.

Nearly half took more than one year.

The administration should review five key areas to examine and reassess whether the current policies align with its desired risk strategy.

These five areas are the competitive procurement threshold, minimum insurance requirements, software subscription approvals, delegations of authority to departments, and the city's standard terms and conditions.

Additionally, there are two processes that we recommend should be defined and documented.

The first is for pilot program procurements.

Procedures are not well defined and can present challenges for approval.

The second is the escalation process for management review of contracts that are stalled during negotiations, which can be informal and lengthy.

Our second finding was that better tracking of strategic procurements would help measure progress and performance.

We found that purchasing's current tool for tracking strategic procurements does not consistently capture key milestones.

This limits insight into project timelines and areas for improvement.

For example, purchasing's internal log contains inconsistent and incomplete data, making it difficult to use for performance measurement or for supervisory review.

We also noted that there are no formal performance measures for strategic procurements, primarily RFPs.

Other jurisdictions use dashboards, cycle time metrics, and workload tracking to manage procurements.

To strengthen procurement operations and improve oversight, finance should implement a workflow tracking system to track procurement progress and develop performance measures for strategic procurement cycle times.

Our third finding was that purchasing should consolidate and update procurement guidance for departments.

Procurement related resources for city staff are spread out across over a hundred separate links and documents.

This leaves city staff without a single easy-to-navigate reference for policies and procedures.

More than half of surveyed city staff said they needed more guidance.

In particular, scope development has been a persistent challenge for departments.

To improve support to city departments, finance should develop a consolidated procurement handbook, guidance and templates for scope development.

Lastly, the city policy manual is outdated in some procurement sections and may not reflect current thresholds or practices.

We recommend that finance review and update the city policy manual to align with current procurement practices.

Overall, our audit has eight recommendations.

That concludes our presentation.

We ask that you accept the report and cross-reference it to the city council meeting on September 9th.

We'll turn it over to Maria for the administration's response, and then we are available to answer any questions.

Chair, committee members, members of the public, Maria Oberg Finance Director.

I want to start by thanking Ali Joe Huad and their team for an incredibly productive and collaborative audit.

I also want to thank the city attorney's office, the city manager's office, and of course my fantastic purchasing division for their thoughts and input into the responses to this audit.

I want to remind the committee and members of the public and staff that this is partially by design.

We are spending the public's money, so we need to make sure that they get the best value for their money, and we do that by having an open, transparent, inclusive process, so that there's planning of transparency, no conflicts of interest, we don't award to the same bidder over and over.

However, all of that takes time.

So we do share the frustration, and we are agreeing with all the recommendations that the auditors have proposed.

And as you know, we started working on this already last spring and before, and some of the changes are in the amended MUNICO code that had the second reading on August 12th and should take effect in September.

Well, thank you for the report.

Do we have any public comments?

No public comments.

Fantastic.

Councilmember Mulkehy.

Thank you, Chair.

Um, thanks for the report.

Uh so I've got a few questions and um going from 10 to 15,000 doesn't seem like a huge leap, and I'm curious.

If you use the 24 to 25 calendar year that you or the um fiscal year that you used for some of the the kind of comparisons, so you had 1450 procurements in 2425.

That's uh for 325 million, it's an average of 225-ish thousand per procurement.

I can understand major processes around 225,000, but I'm curious of the range of 10 to 15,000, you're going from 10 to 15, how many of those 1,450 would fit in that box?

I don't know that we have that number here.

I think you might know what I'm trying to get at.

Like what have we really done here by going from 10 to 15,000 in terms of if you talk about responsibility of the public's money?

We're also spending a ton of the public's money on making sure that we're crossing every single T and every single I, maybe seven or eight times by the time we're able to spend the public's money.

So to me, the data that's been provided is a little lacking in terms of really putting into perspective the recommendation of going from 10 to 15,000.

I'd also say that, you know, we have department uh or you know, people in charge of, you know, say the airport, for example.

It's a billion dollar plus enterprise, and we're handcuffing those folks who are dealing with not, you know, procurements that are hundreds of dollars but thousands and thousands of dollars, and yet we're limiting them to a fifteen thousand dollar before they have to get permission to spend.

Do I have that sort of right?

Thank you, Councilmember.

I'll be you don't deputy director of finance.

Yes, um, the move from 10,000 to 15,000 actually came after a whole lot of deliberation on our part.

We looked at we looked at the data, how much more will go.

I don't have that in front of me right now, but how much more procurements will be conducted if we went from 10 to 15,000 from 15 to 20,000 and from 20 to 25,000 with our competition, and we figured out that above 15,000, there wasn't going to be much of a move, increasing number of procurements that will go through that.

Secondly, we also try to benchmark amongst the jurisdictions around the FPA jurisdictions as to what they were doing, and we figured out that 15,000 was about the right level um for us to be at.

And lastly, there was also some implications with labor relations because we have a public work project, and if it goes over 15,000, you have to register with DIR.

So looking at what the result will be if we went over DI, if we went over 15,000, it may increase the number of procurements, but then on the other side of it, it will definitely increase the number of registrations that you have to do with DIR because they become public work projects uh require registration.

Um I think finance department is open to revisiting um setting uh services or commodities um being at a level over 15,000 for non-competitive, but um at this point we felt that 15,000 was the right level for it.

I would also like to point out that above 15,000 and up all the way to 250,000, there is a far more simplified process of procurement, which is either by quote or um uh be it which happens really quickly.

It's only after over 250,000 that we start talking about requests for proposals, which is the thing that takes a little longer.

So I'll be Maria, can you clarify though the 10 to 15,000?

That was kind of a first step that we did, and you are doing further analysis to look at whether we should go further than that.

That is correct on those contracts that don't require the state registration.

I mean, we looked at a number of other cities, and they're 20 to 25,000, which to me is still you know um lower in order to get what really the whole idea was efficiency of San Jose's procurement process, right?

I can understand trying to cut the time of how long our procurement processes are, but even getting down to a more expected six to nine months, there's still a cost to our community and to our taxpayers for that part of the deal, right?

So I'm still interested in understanding what we're actually what progress we've actually made in the case of the 415 annual procurements.

What difference have we made just by going from 10 to 15?

I think that would be important information for this council to know what needle, you know, what what have we actually moved in terms of making that adjustment?

And other evidence that might support the recommendation, because essentially all of the support for the recommendation doesn't sell me at all as to why would we even move from 10?

What difference are we making?

So I think that's part of what we're going to test out.

So the second reading of the amended municode happened on August 12th, so it should go in effect in September, and then we will evaluate, and in our response, we are committing to bringing back um regular reports, and with any change in metrics, we need to look at the number, see what it changes.

I think a lot of um a lot of relief will actually come.

It makes it easier for um departments to use their P cards.

Um, you know, having to go through a bid of any kind um for 10,000 or less, would be or 10,000 or above.

Um, you know, there will be several that they can buy on their P card without having to go.

So we think there will be some, maybe not on the RFP side, but I think on the day-to-day purchases, this should be easier.

But we're reacting to their report, right?

So basically, if we accept this report, then you go to your shop and figure out how to implement, and then you come back to council to make those recommendations that we would approve, right?

Correct.

So I guess Joe, I'm asking really my fundamental question.

You're the one who made the recommendation, validate the 10 to 15.

You must have seen some value there somewhere, and what is it and why?

Just to clarify, we didn't make a recommendation to move to 15.

So what we had found that we have in the report is that um other jurisdictions, as you had noted, had competitive thresholds up to around 25,000, Los Angeles, San Diego.

And ours were sitting at the time of the audit was at 10.

We were looked at how many fell between uh how many procurements uh competitively procured purchase orders this uh were within that range, 10 to 25, it was about a hundred between May of 2024 and May 2025, which is about two a week.

So that a couple procurement uh purchase procured purchase orders a week um fell within that 10 to 25.

We did see that, like I said, we were among some of those larger cities.

We are a little low.

So we're saying, hey, this is an area potentially to reassess what's the risk we're willing to take on.

Is it 10,000?

Is it gonna be higher?

Now that an organization looked at it and moved it up to 15, as Maria said, there's potentially room to move it further.

I don't have the detail in terms of how many went from 10 to 15.

I can't remember what I think we have that I can get that to you at some point.

But I don't know where the the line is, but it's about a hundred that we saw, or about two a week that if we didn't have to do that that's that's a some body work that some staff in the organization has to take on.

So I guess the last thing I would say is reiterating the first point, which is I understand protecting you know our taxpayer purse, but at the same time, the way we spend it, um, and how we evaluate how we're gonna spend it, in some cases, cost more, and I think that's an important evaluation to sort of understand.

Um, you know, I think uh we have an incredible um uh community of people that work in this building, and it sort of feels like having a bit more trust in the people that we're putting on the ground to make things happen for the city, and I I think that we need to consider that.

And then secondly, or lastly, around the issue of these larger enterprises like the airport, which again is not dealing in hundreds, but they're dealing in multiple, multiple thousands of dollars, and you know, a RFP process that takes six to nine months can mean a huge difference in their ability to be effective in their jobs and in their work.

So thank you very much.

Could I add one thing?

So the competitive threshold is just one piece of a larger puzzle.

The finding overall looks at a range of things, whether it's a delegation of authority, so giving department heads like the airport additional uh uh flexibility in how they procure what we were seeing is you know competitive uh other jurisdictions provide a departments more authority to handle procurements on their own.

For example, Long Beach uh departments handle procurements under 40,000, San Mateo's up to 50,000, Milpitas departments drive their own procurements up to 100,000 dollars without without direct control or not control, with with less input from their finance uh departments.

Now they they might play an oversight role, but they're not directly involved as much.

As well as you know, we have recommendations about really clarifying the the role of of how we can negotiate terms and conditions, how uh bottlenecks of the system get elevated up to the city manager's office to uh basically work through and waive certain conditions if it's in the city's interest.

So that's one piece of a kind of a web of of recommendations that Maria, as she said, they they agree with these, and they're gonna take it take a hard look and how they all kind of fit together because it's focusing on that is is important, but as I said, it's about a hundred recommended procurements fit within that ten to twenty-five.

It's one of a number of things that we're recommending.

So sorry, so you're Maria open to taking a look at where you're where our system is creating log jams that are just unnecessary, that we can perhaps look at policy that will allow that to move forward in a more efficient way.

Absolutely.

I think it becomes a risk tolerance um discussion to have that finance can't lead on its own, it has to involve city attorneys' office as well as the city manager's office.

But yes, we are committed to having those discussions.

Thank you.

Well, thank you.

Before I go to Councilmember Kamei, um, take a privilege to ask some of the questions I have.

I agree with Councilmember Mulcahy that 10 to 15,000.

I think that policy might have been set, I don't know how many years ago.

Um we need to move on with the modern world, how do we be more efficient?

I I know that procurement above 10,000 become cumbersome because as a former fire captain working to facility and and response for a company stores.

Sometimes these processes is arduous, and it it creates more spending and more resource from our side versus being more efficient.

But also, and I I'm looking forward for your new recommendation come up on the council so that way we can get a little more clarification and and hopefully we can be more efficient.

I do have a couple of questions.

What can we do to reduce that RFP?

You got your RFI, RFQ, and then you go right to RFP.

And that's a long process, six to nine months.

Are we using any new tools?

Are we using any new technology?

Or do we reach out to other city or government agency where we can look at the the procurement to a particular company that is trusted that's been around and make it a lot easier and more efficient.

Yes, to all.

We have taken a look and we have made it easier for us to use the cooperative agreement, which does exactly what you said, looking at what other your jurisdictions have done for similar or projects of similar scope.

So it comes down to as long as the scope is more or less the same as we want, then absolutely that has been made easier.

Well we've written in all thank you for that answer.

And the second question I have for you is that in our policy is stated very clear that we we should support our local businesses prior to go on the outside.

Now last couple years there was problematic when we went to company on the outside, would cost us in a million dollars more, less guarantee.

Um how do we overcome that?

Because I know this, for example, from mattresses to equipment to smoke detectors.

There are folks out there that find the loopholes.

What they do is say, oh, I got an office here, it's just their bedroom.

And I go, okay, that's qualified for local businesses.

I think we need to do a little more due diligence to make sure that it is a true business here in town, you know, in within our realm to support.

So how what are you doing to make sure that we truly support our small businesses here?

Councilmember Dunn, uh, thank you for that question.

I'll be you don't, Deputy Director of Finance.

Um, the Muni code states that if a local or small business applies, they get a preference or extra points in the evaluation, whether it's um price-based or evaluative, so they they do get that.

And that is how we make sure that small local businesses get a chance at being awarded a contract.

Um to make sure that there's more local businesses within uh um uh area, we obtain the uh first of all, they have to certify that there's more local business here, and we obtain that sector of state registration to make sure that they're actually headquartered here.

Is every single one of them correct?

I couldn't say, but we have to go with what they provide to us.

It may be that um we look at other ways to make sure that they are small local businesses within uh area within San Jose within the county, but at this time that's what we've been using, and um that's been working for us.

Well, thank you.

I'm hoping that Vilt will use more data that they can be proven the fact that they are small businesses that exist in San Jose, not just open up the last couple months because they heard about our bid process, but they are a true business that's been established here in San Jose.

Well, thank you very much for the report and keep up the good work, and I'm gonna go to Councilmember Kamei.

Thank you very much, Chair.

Um, as always, I I really um want to thank the auditor and the audit team.

Your reports are always very thorough and and I really do appreciate it.

I appreciate your reaching out and always being available to answer um all of the questions, tons of questions uh that that may arise.

Um, I also want to thank uh the finance department for agreeing to all of it.

Technical terms, to create to create efficiencies.

So I think that although the movement is incremental, it is movement, and I think that that takes us in the right direction.

So I really want to thank you for that.

And with that, I'd like to accept the audit report and refer and cross-reference this audit to be heard by the full city council on September 9th.

Second.

Alright, we got first second.

Let's vote.

That motion passes unanimously.

Thank you.

Okay, we're going to a third item.

Fireworks ordinance work plan status report.

And we have staff attending, which is Deputy Chief, Fire Chief James Dobson, police captain, Steve Donohue, Deputy Director Rachel Roberts, and product and project manager Namrata Batra Aggroa, and Program Manager Kia Ohara.

Sometimes that's a mouthful of that.

Oh, hey.

Good afternoon, Chair, Committee members, colleagues.

My name's James Dobson, Deputy Fire Chief and Fire Marshal with the San Jose Fire Department.

Today I have the pleasure of being accompanied by Deputy Director Rachel Roberts of Code Enforcement, Captain Steve Donahue with the San Jose Police Department, Product and Project Manager Namrata Patra Agrowa with the information technology department, and Project Manager Key O'Hara with the information and technology department.

We are pleased to present the 2025 Fireworks Ordinance Work Plan Status Update Report.

This report reflects the collective efforts of a dedicated team of individuals from multiple city departments committed to supporting the city's ongoing work to mitigate the risks of illegal fireworks, protect public safety, and strengthen our enforcement strategies.

The city's fireworks ordinance work plan has several core components.

Public education and outreach to inform the residents about the dangers and consequences of illegal fireworks, community reporting that allows the public to share information quickly and accurately, enforcement strategies designed to hold violators or violators accountable and to deter use moving forward, and continuous evaluation and coordinations across departments to refine our approach.

The 2025 campaign, our goals were to increase public awareness that all fireworks are illegal and can result in loss of life, property loss, and damage to the environment, to use hotspot data from the 2024 campaign to better target advertising and enforcement, to improve the refresh rate of our SJ 311 illegal fireworks dashboard for the near real-time utilization for first responders, to reduce illegal fireworks activities, injuries, and fires, to explore and evaluate the UAV or drone use in conjunction with the social host ordinance for enforcement, which during this year resulted in the initiation of our drone enforcement pilot, and finally to complete a fine adjustment study with a particular focus on increasing the spectator fine amount.

These goals build on years of work and reflect feedback from our community, especially neighborhood associations who continue to tell us that illegal fireworks activity is among one of their top concerns.

Working to combat San Jose's illegal fireworks is a year-long process.

That starts in August, when our team completes the process of issuing citations and warning and initiates debriefings to learn from the prior years campaign.

It extends to the following year's 4th of July holiday and then starts again.

This past year we saw enhancements in outreach, technology, and enforcement.

Our campaign expanded multilingual messaging, deployed targeted ads and identified hotspots.

We evaluated the use of the new state legislation AB 1403 with increased fine amounts of up to 100,000 and incarceration for up to a year for the possession of dangerous fireworks.

We completed the fire fine adjustment study, and we initiated the drone pilot program.

All of this while coordinating with regional partners and engaging with our neighborhood associations and council district representatives.

I want to emphasize that despite these efforts, fireworks remain a significant threat.

They are not simply a nuisance.

They cause fires, medical emergencies, and disrupt the quality of life in our neighborhoods.

Outreach continues to be the foundation of our prevention efforts.

The outreach advertising campaign emphasized accessibility and inclusivity.

Advertising was translated from English into Spanish, Vietnamese, simplified Chinese, and traditional Chinese.

We deployed billboards, banners, bus shelter signage, and even radio ads.

We provided brochures and other printed materials at our community centers, libraries, and fire stations.

Our fed up with fireworks campaign toolkits were shared with city council offices, schools, and neighborhood groups.

We held a news conference with our elected officials to advertise legal fireworks and drone shows to provide a safe, family-friendly alternative to illegal fireworks use.

These efforts were targeted to provide consistent messaging across San Jose's diverse communities.

This slide talks about fire department responses.

During the 2025 Lunar New Year, the San Jose Fire Department responded to 21 fireworks-related incidents, including one structure fire, two rubbish fires, three medical emergencies, and 15 general complaints.

During the 4th of July period, we responded to 69 fireworks-related incidents, including three structure fires, 20 vegetation fires, 27 rubbish fires, 15 general complaints, and four medical emergencies.

These responses illustrate the significant risk associated with illegal fireworks.

While fire-related calls were up as compared to the previous year, many factors can influence the number of fires that do occur.

Enforcement efforts resulted in one arrest and the multiple investigations that were conducted led to the seizure of 3,300 pounds of illegal fireworks, permanently preventing the distribution and use of those dangerous fireworks and improvised devices in our neighborhoods.

Their support of the drone pilot program resulted in sufficient data to initiate seven administrative citations.

For the hotline of SJ 311, while we saw a steady decline in the SJ 311 hotline for illegal fireworks over the last few years, the SJ31 hotline remains a critical tool to provide online reporting information and accessibility to reporting illegal fireworks over the phone for those people that may not have access to the app or to the Internet.

During the 4th of July, 132 fireworks related hotline calls were received, with 14 being routed to after hours service.

This year, IT improved the dashboard refresh rate to five minutes.

This near real-time visibility gave us a better picture of emerging hotspots and was available to first responders.

The SJ31 online reporting tool saw 71 illegal fireworks reports during lunar new year and 889 illegal fireworks report during the 4th of July.

Roughly 50% of the reports made on the 4th of July were anonymous.

These reports can be used for hotspot data collection, but cannot be used for citations or warnings.

This year, eight administrative citations were issued as a result of registered users reporting through the SJ 311 online reporting tool, which is a significant increase from the two previous years.

We continue to evaluate whether having anonymous reporting features reduces our ability to receive reports that can be used for citations and warnings.

As I indicated earlier, seven administrative citations were directly related to data obtained from the drone pilot program, making a total of 15 illegal fireworks administrative citations issued by Code Enforcement so far this year.

It is important to note that hotspot data generated during this year's campaign will be utilized for targeted enforcement and outreach during this coming year's illegal fireworks campaign.

One of the significant developments this year was our fine adjustment study.

Currently, spectators of illegal fireworks face a $25 fine, which is less than the price of admission to many of our paid fireworks shows conducted in San Jose.

Neighborhood associations, council members, and enforcement partners agree that this amount is not a deterrent.

Our review of peer jurisdictions throughout the state showed that some already impose $500 fines for spectators.

We recommend raising San Jose Spectator fine to $500.

This will provide a stronger deterrence, better align San Jose with leading jurisdictions prioritizing public safety, and support our broader goals of preventing loss of life, property damage, and environmental harm.

City staff are now working with the city attorney's office to amend the fine schedule with our proposal to return to council for consideration.

Looking ahead, our team will continue to enhance enforcement strategies by evaluating the drone pilot and real-time data integration.

We will continue to seek state and federal grants to fund expanded outreach and enforcement.

Recently, we applied for a 169,700 and $10 grant to assist with campaign enhancements and are awaiting hopeful approval.

We're working to strengthen regional collaboration with neighboring jurisdictions.

We will refresh campaign messaging to highlight our enhanced enforcement tools and continue to focus on the dangers of illegal fireworks.

And lastly, we will continue enhancing community reporting tools and enforcement technologies.

Our priority remains clear protecting life, property, and the environment, while respecting community traditions and celebrations.

In closing, we want to acknowledge that illegal fireworks are a persistent challenge.

One that we are addressing through education, technology, and enforcement.

We are proud of the progress we've made, but we also recognize that more work is needed.

By increasing fines, using drones, improving SJ 311, and working with our community, we are taking concrete steps to protect lives and property and the environment.

Thank you for your time, and we would be happy to answer any questions.

Thank you for the report.

Do we have any public comments?

No public comment.

Right, I'm gonna go to Councilmember Kamei.

Thank you so much for the report.

This is really important, especially when you think about you know all of the dry areas that there are, and uh, you know, I know that sometimes um uh, you know, it's thought, oh well, it's not gonna make a difference, or whatever, and then all of a sudden it's uh it's a big deal.

So thank you for all the work.

I um I do agree with the increasing in fines.

Uh I think that that's uh that's the way to go.

I also think that the use of drones is very helpful.

Uh I was just curious in terms of I know this was a pilot, uh, but uh will you continue to be using uh drones or how how is it gonna work?

Because it seems to me that that puts out sort of a broader uh area that you're able to uh look at.

Thank you, council member.

I'm gonna have uh Captain Captain Donahue help me with that question.

Hi, Captain Steve Donny has a PD support services division.

Short answer is yes, we definitely want to continue to use drones.

Um it is staffing limited.

This year we did something kind of neat.

We worked with our community emergency response team and brought in civilian personnel to help us with the drone program.

They were licensed drone operators, and using them, we were able to partner them with San Jose Police Department personnel, which allowed them to fly in certain areas that they normally wouldn't be allowed to fly.

And using their drone footage that helped with some of our citations.

So we hope to integrate that into the future and be able to use both our community members and our department personnel to do that.

Yeah, that sounds terrific.

You know, I do know that there's uh uh increased interest in you know how we can use drones to augment or to assist.

So I'm I'm delighted that you're you're thinking about you know using that in other ways.

So thank you so much for that.

Um I would like to go ahead and move acceptance of the status report.

Second, thank you, Councilmember Kamei.

I want to go to Councilmember McMulkey.

Thank you.

Thanks for the report.

Um Deputy Chief, I'm curious, and maybe Captain Donnie, you have to weigh in too, and maybe in Rachel, like on 4th of July, you know what is staffing look like, and you know, how are we deploying to kind of root out the issues before they happen?

And I'll give you just an example.

You know, as a candidate, I had two different neighborhoods uh in district six, you know, that were sort of calling out their neighbors because they you know do it out in the middle of their street, and every all the neighbors show up and they're doing it, you know, in a city street out in public.

Um, what does it look like on 4th of July to sort of get ahead of it?

And then I guess the second part is if we know where these hot spots are, what do we do with that information?

So great.

I'm gonna start with the last part of that.

When we have those hotspots, we actually target those areas for our advertising not only with social media but with actually printed advertising to try and make sure that the community knows the hazards but also uh what the affected populations are that's part of it for the targeted response I'll let uh Captain Donahue uh speak to that but one thing I will say that um for the fire department staffing is always a challenge during uh holidays uh we tend to move to we have minimum staffing and we move to mandatory so bringing people in uh to make sure that we have sufficient coverage throughout uh the uh department in addition uh because uh fourth of july falls uh usually right in the middle of our wildland season we um depending on weather there's at times we actually staff additional resources which then can be also be a challenge yeah thank you yes from the police department perspective it's very similar challenges as you can imagine fourth of july is a family holiday people like to be home with their families and so the the personnel that we use for the drone enforcement is supplementary personnel to the patrol division patrol is super busy that day they are swamped with calls and so we can't pull from the patrol structure to deal with the Fourth of July fireworks.

These are all volunteers that come in on their time off in secondary employment to do this.

So that day we only had two people able to come in we were able to prepare a cert operator with one of those people so that they could go out and take drone footage the other one was a drone operator on their own and they were able to take their own footage so that staffing was very very tight.

Now with those two different vehicles out there they were able to write six citations total which is pretty good all things considered with only two operational uh units.

Now in the future we hope to increase that we're trying to make it enticing for people to come in but really it's a volunteer assignment.

So did you say cert?

So the the it's cert certified folks that are doing the drone program is that yes so the the cert the community emergency response they're the ones that are coming in to help us.

Right.

Yeah I was gonna say I mean we have such a growing number of people that are getting certified and you know look we don't have many disasters in this town so it's you know they're they're always looking for something to apply themselves to so it seems like a good opportunity to engage in the fantastic they were very enthusiastic about coming out and helping us and spending time with us.

All right thanks thanks yeah lastly uh council one of the things that I would tell you is that for the fire department and the police department uh especially fourth of July that's one of our busiest days um the number of calls and and not just related to fireworks uh but overall are some of the highest we have all year thank you Councilmember Mulkey we're gonna go to council member George Casey.

Thank you.

Appreciate the report I I guess I mean it's a tough deal all the way around but I I just tend to think folks that engage in this type of behavior advertising that it's illegal to them is not going to really modify or change their behavior so I'm wondering if there's an opportunity to do something even more drastic to make an example of several people in order for it to really hit home.

I know in Sacramento they have a situation where I guess it's 10 thousand dollars if you set off fireworks on city owned property or in critical infrastructure areas and I think someone got hit with two point one million dollars in fines this past 4th of July I think something like that where you know there's a potential for you to be on the hook for a substantial amount of money if you engage in this type of behavior would break through some of the noise and register for some folks otherwise, I mean I applaud the effort and I understand there's limited resources and you're making a great a great uh attempting to make an impact, but I just think we got to really hit somebody hard and make an example out of somebody.

So if there were an opportunity for us to pursue or consider something along the lines of what Sacramento did in terms of the city owned properties, because I have, for example, Cahale and I know Captain Donahue knows the area well.

We it was like bombs over Baghdad this past Fourth of July.

I mean it was really, really bad, and they actually burned down some trees, and we went but afterwards, after parks cleaned up, we had to go and clean up as well.

So the amount of damage it does to our area and just the neighbors.

I mean it's it's I don't see us putting a dent in this unless we do something really drastic.

So I would hope you would consider coming back to us with something like that, asking us to impose something like that.

Thank you for that.

Um I agree with you.

Like I indicated, this these are not nuisances.

This really disrupts our communities.

Um and yes, I think we're looking for tools, we're engaging not only with other jurisdictions, uh, but locally with our neighborhood associations to gather information to uh to try and further that and to come up with some of these items that you know really can be impactful.

Um I wanted to uh invite uh um Rachel to uh comment.

Uh we have engaged with our attorney's office and are trying to look uh as far as increasing fines and ways that we can do that.

Thank you.

Excuse me, Rachel Roberts, Deputy Director of Code Enforcement.

So as um Chief Dobson said, there is um has been ongoing discussion around that.

One of the challenges we have currently in the city is that in order um for someone to have their due process when they've been issued a fine as regarding citations, um, is they're required to pay that citation before they can have their appeal hearing.

And so there is some um, you know, concerns around um if the fines are so steep that it makes it impossible for someone to actually have their due process by having to pay that first.

Um, you know, we could put ourselves in kind of a um predicament.

So um that's definitely been part of the conversation.

As far as um city properties, we haven't really explored that specifically, but I think that can that conversation is going to continue.

Um, and we'll do our best to provide more information and update when we bring back the fines um for the spectators.

Thank you.

I would suggest we follow what's going on in Sacramento as far as that case as it goes to I would imagine this guy's gonna appeal or do something.

So if they're able to make that stick, it's good news for us.

Thank you.

Thank you, Councilmember Casey.

We're gonna go to Councilmember Toddos.

Thank you, Chair, and thank you, staff for the presentation.

Uh, this is an issue that's been top of mind for me since one of the hot spots in our neighborhood.

It was about a hundred uh feet from our front door this past year.

So uh we spent many days uh seeing the illegal fireworks going off very close to home.

Uh I had two quick questions here.

Uh and apologies if I missed this in the staff report, but do we know why 2023 was such a hot spot for both citations and arrests?

So this are you talking about this last year or the prior year?

Uh just looking at the chart on slide six of the police call volume and enforcement.

It looks like 2023 was far and away the uh largest year for citations and arrests, even though it was pretty flat in terms of calls for service.

I think they're pulling it up right now.

Okay, so um I'm gonna ask that uh Rachel Roberts uh uh comment and then uh we'll also uh have a uh Captain Donnie have an opportunity because there's there's two different types of citations.

We have administrative citation and criminal citations.

So we'll start with uh Rachel.

Thank you.

Um I know that around that time as when we made a uh a change, there was a decision made um to allow the anonymous complaints.

Um so uh we have seen a decline in the amount of administrative citations that we can issue without having um an actual reporting party that we can circle back with to either provide testimony or ask additional questions, so on and so forth.

Um, I do also know that year over year we've been trying different strategies um on the police um department side, which I know um Donnie Hill will speak to in just a moment, but um it is a lot of times dependent on what staffing we have available and what what funding and resources we have each year and what we can deploy um for the fourth of July.

Thank you for your question.

Yes, uh as she referenced it's it's really about the techniques that we used prior to the Fourth of July that year, where we were able to get a couple of really good cases on some people who are selling fireworks and storing them.

Uh we also had some fire incidents that led us to have some information on to who had what and where.

So without giving away the investigative secrets, that's what it was.

And then, you know, you saw this year we were able to put two good cases together for a large quantity of storage of fireworks.

Thank you.

And then uh my only other comment would be echoing uh, you know, the concerns raised by uh some of my colleagues would love to see uh report back on uh increasing the fines for use and possession, not just the spectator uh fines.

Uh since it's a little strange to me that the spectator fines, if this goes forward would be only 50% or would be 50% of the first violation for use and possession, so it feels like there may be room to increase there as well.

Thank you, Council Councilmember Tordios.

Well, thank you.

I, you know, my office work with um our fire department or police department, a code enforcement, and our neighborhood association in order to come up with this pilot program.

I see there's a lot of value.

It's it's uh it's in an infant stage.

It'll take time to make it better.

Um I was up on Sierra Road looking down to the city of San Jose, and boy, I'll tell you it.

And I'll go to Councilmember Casey, it is like bombing out there.

And um my question to you is the uh people who got caught with 3300 pounds of uh fireworks.

Did we did both administrative citation and criminal citation?

To my knowledge, they're just criminal because of the charges.

If if you give me the uh latitude we have with us, Josh Schwitters, he's an officer in our bomb squad, and he is our expert on fireworks and and explosive devices, so he might be able to speak to that.

Okay.

Good afternoon.

My name is uh Josh Witters.

I'm currently assigned to the bomb squad, and uh I actually run the department's drone program as well.

Uh to answer your question, uh the cases that you're referring to, they were charged criminally.

Uh they were felony cases, and so they're currently in the hands of the district attorney's office, and they're working uh that direction because uh possession of dangerous fireworks over a hundred pounds is actually a felony.

So the threshold to get a felony case on someone for possession of dangerous fireworks is actually pretty low.

And did we use the AB 1403 in order to on top of the criminal?

We could find them a hundred thousand dollars where it hits the pocket, that's what counts.

I believe that would be determined after sentencing.

So they would have to be convicted and then sentenced, and then that's when the disciplinary action would happen, including any fines or anything associated with that.

It is well, thank you.

Thank you for the answer.

Uh the other question I have for you is this um why we can't use the hot zone and cite them, you know, the the drone identify the hot zone, right?

And I would imagine the the drones now with the 4K ability to observe the people who are in violation of fireworks.

Why can't we use that footage to narrow down the citizen or the vehicle, even the the address and cite them?

So let me clarify what you're asking.

Are you asking if we can use the drones to identify the individuals in the footage?

Yes, individual, the address, or even the the vehicle, right?

With the license plate.

Our our um our municode is written such that it's it's a liability on the residents that is using the fireworks.

So what we do is we capture individuals related to that residence.

So we did this year have a citation, for example, in a park.

That citation can't be filed, it can't be used because it doesn't associate them to the residents for the strict liability of using those fireworks.

So the owner of the residence gets fined, not the individual firing it.

If, however, we were to send officers out, detain the individual, they then could be, you know, arrested or sighted or fined for using the fireworks, but that's staffing intensive, right?

Imagine sending officers out to every location where fireworks are and then detaining all the people there.

So using the drones, it was very staffing, um, allowance.

It allowed us the opportunity to hit multiple locations in brief periods of time to capture the information we need to provide that to code enforcement for that citation.

Thank you for that answer.

Regarding the spectator, if we were to go to the $500 fine, what is consider within that geographical area?

Is it within a thousand feet the spectator?

Is it within a five hundred feet or a couple hundred feet?

So per the municipal code a spectator is defined as someone who is like viewing, observing, um, you know, part of the the crowd that within 200 feet of an unpermitted fireworks event display, so forth.

Well, thank you.

And I I know that is difficult with the resources that we have, but I think as you're looking toward in the future, as we hire more police officers, perhaps even use the combination of police officer co enforcement and public safety officer to to come out and cite um these violators.

And again, I just want to say thank you for the first time that we we take some type of action within the city of San Jose, and I appreciate all your hard work, both of police and fire, and I'm very proud of you.

Now I'm gonna go to oh I saw council member Casey.

So Captain Donahue, if you could, I mean, there's some practical realities too, right?

For example, at Cahalen, we'd have 100, 200 people out there shooting off fireworks, and that's difficult situation to send our officers into.

I mean, how many would you have to have to be safely orderly going there and and cite folks?

So there are some logistical and practical challenges to enforcing some of these laws, right?

Very much so.

I mean, if you imagine you've got 150, 200 people, how are we going to detain that many people and keep them there for the time period necessary to cite every one of them for the uh $500 fine?

That's incredibly time and manpower intensive.

That's why we got to get one of them and hit them with two million.

Thank you.

Appreciate it.

Thank you, Captain.

Thank you, sir.

All right, we um have our motion and then our seconds.

Let's vote.

That motion passes unanimously.

Thank you.

And we have open forum.

No public comment.

Meeting adjourned.

Um, we're not going to be