San Jose City Council Meeting – February 10, 2026

The San Jose City Council met on February 10, 2026, to address a full agenda including the mid-year budget review, a proposed ballot measure to increase the Transient Occupancy Tax (TOT), approval of San Jose Clean Energy rates, and an appeal of a denied conditional use permit for a late-night restaurant. The meeting opened with ceremonial proclamations for Vietnamese New Year (Tet), American Heart Month, and Black History Month, as well as an invocation by Jamal Williams, co-chair of the Sawa Bona Collective, who highlighted challenges facing the Black community in San Jose. The council also adjourned in memory of retired San Jose Fire Department Battalion Chief Ken Heredia.

Consent Calendar

• The consent calendar was approved unanimously without any items pulled for discussion.

Public Comments & Testimony

• Item 3.4 (TOT Increase): Multiple speakers, including representatives from the Bay Area Glass Institute, San Jose Arts Advocates, the San Jose Museum of Art, and the Silicon Valley Chamber of Commerce, urged the council to include arts and cultural funding in the ballot measure or to reinvest a portion of TOT revenue into the arts and experience economy. Speakers from Working Partnerships USA and IFPTE Local 21 supported the memo to explore business tax modernization. The California Apartment Association opposed a gross receipts business tax, citing impacts on housing costs.
• Item 10.2 (After Bar & Grill CUP Appeal): The property manager and a community member spoke in support of the applicant, emphasizing ongoing safety improvements at the Tropicana Shopping Center and the importance of supporting small businesses.
• Open Forum: One resident spoke about experiencing homelessness due to a landlord’s alleged constructive eviction.

Discussion Items

• Mid-Year Budget Review (Item 3.3): Budget Director Jim Shannon presented a mid-year outlook showing a projected $15–20 million revenue shortfall in the general fund, driven by lower property tax and utility tax revenues. To offset this, the city manager recommended $16.6 million in expenditure reductions, including pausing the opening of the Police Training Center and Fire Station 32, defunding the emergency medical services field coordination program (Med 30), and absorbing salary/benefits reserves. Councilmembers debated a memo from Councilmembers Dwan, Campos, Candelas, and Ortiz requesting extensive data on homelessness spending and county costs. After discussion, the council amended the motion to request a two-year lookback on city-side data (items B, D, E, F, H) to be presented at a May budget study session, with a staff referral to the county for additional information. The motion also directed staff to prioritize funding for mobile integrated health care and community paramedic pilot programs as part of legislative advocacy.
• Potential TOT Ballot Measure (Item 3.4): Staff recommended placing a measure on the June 2026 ballot to increase the general fund portion of the TOT from 4% to 6%, generating an estimated $10 million annually. Polling indicated soft support (55%). Councilmembers discussed the need to protect arts funding and avoid business tax increases. A substitute motion to approve the staff recommendation (TOT increase only) passed unanimously. The council also agreed to receive a status report on business tax modernization via a Manager’s Budget Addendum (MBA) in May.
• San Jose Clean Energy 2026 Rates (Item 6.1): Staff proposed lowering rates by 18% (total savings of $92 million for customers) while maintaining 62% renewable content. The decrease was achieved by using $108 million from reserves to offset a 470% increase in the Power Charge Indifference Adjustment (PCIA) fee charged by PG&E. Councilmembers expressed frustration with the PCIA and urged continued advocacy for reform. The resolution passed unanimously.
• Weed Abatement Public Hearing (Item 8.1): Two property owners requested removal from the weed abatement list, citing recent compliance. County staff explained the three-year inspection process. The council approved the staff recommendation to adopt the abatement report.
• Appeal of Planning Commission Denial for After Bar & Grill (Item 10.2): The applicant sought a conditional use permit to extend operating hours until 2 a.m. on weekends. Staff and the San Jose Police Department opposed, citing a documented history of violations (including serving alcohol after midnight, locked fire exits, and noise complaints) despite prior opportunities to correct. The Planning Commission had unanimously denied the permit. After debate, a substitute motion to uphold the denial passed 7–4 (Cohen, Ortiz, Dwan, Casey dissenting). The applicant can reapply after demonstrating consistent compliance.

Key Outcomes

• The mid-year budget adjustments were approved, including $16.6 million in expenditure reductions and a directive for staff to present city homelessness data at the May budget study session.
• The council voted to place a 2% TOT increase on the June 2026 ballot (simple majority required).
• San Jose Clean Energy’s 2026 rate reduction and renewable energy content were approved.
• The weed abatement report was adopted.
• The appeal for the late-night use permit at 1692 Story Road was denied, upholding the Planning Commission’s decision.
• The council adjourned in memory of Ken Heredia.