Good morning, good afternoon.

I'd like to call this meeting to order.

If everyone could take a seat, we're going to get started.

We're gonna start with a roll call first.

Tony, will you please take the roll?

Kim.

Campos?

Tordillos?

Here.

Cohen.

Ortiz.

Present.

Mokehi.

Here.

Duan.

Here.

Candelas?

Here.

Casey?

Fully?

Here, Mayhan.

You have a corn.

Great, thank you so much.

Now, if you're able, please rise and join me in the Pledge of Allegiance.

I pledge allegiance to the flag of the United States of America.

Today's invocation will be provided by the Silicon Valley Gay Men's Chorus.

Council Member Tordillos, please tell us more.

Thank you, Vice Mayor.

And good afternoon, everyone.

Uh for our final invocation of the month.

We are pleased to be joined by the Silicon Valley Gay Men's Chorus.

Founded in 1983, the Silicon Valley Gay Men's Course was first called the Leaderman Chorus of San Jose and sang their first full-length concert in June of 1984 as part of San Jose's Gay Pride celebration.

In 1998, they change or 88, they changed their name to the Silicon Valley Gay Men's Chorus, or SVGMC for short, embracing and more openly identifying themselves as a singing group made up out of gay and proud men.

SVGMC has celebrated a number of historic firsts over the years, and the group was the first LGBTQ plus organization to perform the national anthem for the San Jose Earthquakes and the San Jose Giants.

SVGMC's most recent concert, Legacy, honored their more than forty year history as a home for queer voices and allies with their largest chorus yet, honoring the past while affirming how LGBTQIA 2S plus identity continues to grow and thrive.

SVGMC's vision is to inspire and unite our diverse community through musical excellence and collective pride.

So without further ado, please join me in welcoming the Silicon Valley Gay Men's chorus.

Yes, we can yes we can we can build a beautiful city not a city of angels, but we can build a city of do we may not reach the end but we can start on slowly but true and break my brain by heart no baby start learning how to do we can build a beautiful city yes we can yes we can we can build a beautiful city not a city of angels but we can build a city of do when you're trust is all but shattered when your faith is all but killed you can give up bitter and battered or you can

Not a city of angels, but we can build a city of when your trust dissolve but shadowed.

When your faith is all but killed.

Or you can slowly start to start to be the beautiful city.

Yes, we can.

Yes, we can.

We can a beautiful city.

Not a city of angels, but finally a city of man do a city of.

Thank you so much.

Such beautiful voices.

And I just want to acknowledge while they're still here that the Silicon Valley Gay Man's chorus always sings for us at the two pride events that we have in June and August.

So it's wonderful to see you here in Chambers singing for us.

Thank you for being here.

And now will Councilmember Ortiz please join me at the podium as we recognize and proclaim Ernesto Galarza Day.

Thank you so much, Vice Mayor.

And if I could be joined by members of La Rasa Historical Society and La Rasa Roundtable.

Today we recognize Dr.

Ernesto Galarçade.

A moment to reflect on a life dedicated to justice, education, and dignity for working families.

Dr.

Galarza's story is one of resilience.

From humble beginnings, starting in Mexico, to becoming a scholar, organizer, and advocate.

Here in San Jose, Dr.

Galarsa made a lasting impact, teaching at San Jose State, organizing farm workers, and helping lay the foundation for what would later become the United Farm Workers Movement.

He didn't just study injustice, he challenged it.

His work exposing the abuses of the Abracer Program brought national attention to the exploitation of immigrant laborers and contributed to its end in 1964.

But beyond his accomplishments, what makes Dr.

Galarza's legacy so powerful is that it continues to live on through organizations like La Rasa Historical Society, through your work to preserve our stories, uplift our history, and ensure future generations understand the shoulders that they stand on.

It's about carrying that legacy forward.

It's about continuing the fight for equity, opportunity, and justice in East San Jose and really far beyond.

And following her, a short uh talking points from Rose Amador from uh La Rasa Roundtable.

Thank you.

Thank you, uh Council members, uh, most especially Peter Ortiz and his office for this honor to receive along overdue uh recognition to Dr.

Ernesto Galarza, the most prolific Mexican American to come from California and arguably the country.

He fought tirelessly for labor rights.

And when most of us thought that the Brasero program was a great opportunity, he saw beyond that.

And fought until he could have that program ended across the country.

Because he did that, he opened the door for the farm worker movement.

As a historical society, it's our responsibility to share these stories truthfully with dignity, to celebrate our leaders.

This year we are celebrating our tenth year anniversary.

We are also opening our own house at the San Jose History Park called Casa de la Rasa.

We hope you all come.

His contributions deserve to be recognized.

Thank you.

This honor reflects decades of dedicated work to preserve, uplift, and celebrate the stories that define our people's resilience, resilience, and achievements.

The Raza Roundtable is especially proud of our ongoing collaboration with the historical society across multiple community initiatives.

Among these joint efforts, the recognition of Dr.

Ernesto Galarza stands as a powerful example of what our partnership can achieve.

Dr.

Galarza's legacy as a scholar, organizer, and champion for workers' rights remains a cornerstone of our collective history.

The historical society's commitment to honoring his life work and our collaboration in amplifying that recognition ensures that his contribution continue to inspire action and pride throughout San Jose.

We celebrate this well-deserved proclamation and look forward to continuing our shared work to preserve our history, empower our community, and advance justice and representation across the city.

La Rasa Roundtable stands with La Raza Historical Society today and always as partners in cultural stewardship and community progress.

Congratulations.

The Vice Mayor will now present the proclamation.

Ernesto Galarza is one of the schools in my district, but I had no idea that was the history of all that he has contributed to our society.

So I'm honored to learn that today.

I should have done my research more when I was a school board member.

Next, I'd like to bring forward Councilmember Duan.

Please join me at the podium as we recognize Happy Hollow Park and Zoo's 65th anniversary.

But I don't see Danny the Dragon.

See, when you when you ask, here come Danny.

Fantastic.

Hello, everyone.

Today in council, we are celebrating a very special milestone.

The 65th anniversary of Happy Hollow Park and Zoo.

For 65 years, Happy Hollow have been more than just park or a zoo.

It has been a place where a generation of families in San Jose have come together to learn, laugh, and create lasting memories.

From childhood field trips to weekend family outings to space has connected our community to nature through play, discovery, and joy.

Through its incredible commitment to animal care, conservation education, and family-friendly recreation.

The park and zoo continue to inspire curiosity and a deep sense of responsibility for the world around us.

It is a place like this that helps shape future generation, encouraging young minds to explore to care and to dream.

I also want to take this moment to say how thankful I am to have Danny the Dragon here with us.

Truly a San Jose celebrity, and to recognize the amazing Happy Hollow staff, your dedication, your passion, and hard work are what made this place so special year after year.

And we recognize this milestone alongside with Vice Mayor and obviously our mayor Matt Mahan and my colleagues.

We celebrate not just the 65 years, but the many more to come.

And I will end on this, because no celebration at Happy Hollow would be complete without a little fun.

After 65 years, this place had proved that you are never too old to monkey around and have a great time.

Congratulations again and thank you for the 65 wonderful years of service, education, and community.

Here is two many more magical moments ahead.

Thank you.

And uh Vice Mayor will hand the commendation top, I'm sorry.

Thank you, Councilmember John Siswell.

I'm the director of the Parks and Recs Department.

Uh 65 years, that's many generations that uh people have been going there and visiting.

I know when I walk around there, I often see grandparents who are with their grandchildren telling me the story about hey they they went there as a child.

And so we see that always going on at Happy Hollow because it's such a great place for kids.

It's such a great place for them to learn through play, which is really something we try to do.

More than 400,000 people visit the zoo every year, making it one of the most popular attractions in the whole city.

Um, of course, they go there and they create these great memories that last forever.

Um, and some people it's their first encounter with any kind of an exotic animal.

Um, and it's where almost a hundred animals call themselves home.

Um, and it reflects a core mission of our department, which is to create welcoming spaces that promote play, learning, and community connections.

And so, in that vein, I want to let you know about a few things coming up.

This Friday, we're celebrating the 65th anniversary at the zoo.

So if you have kids or not, doesn't matter.

You still can be a kid at heart.

Feel free to come by and celebrate with us.

Uh, we have our Earth Day celebration, uh, Sunday, April 26th.

And senior senior safari starts uh in May, which is a very popular event with our older adults.

So I just want to thank a few people.

We have our brandly newly minted general manager, Mario Day and his team.

Standing next to him is our brandly newly retired former general manager, Kirsten McCormick.

Thank you, Kirsten.

You've done such a great job with the entire team, all our volunteers and community that supports us and continues to come out and have memberships with us and so on.

I also want to thank the Happy Hollow Foundation, their executive director Ronald Norse is here.

And I want to thank their board as well.

They did a great capital campaign on their own, uh, working with us to completely re-envision the Danny the Dragon ride.

So if you haven't been there recently, you should come see the new stuff.

And then certainly uh Councilmember Duan for recognizers and the mayor and council for all the years of support.

Um, on behalf of the department, we're honored to be part of this legacy in these 65 years.

Thank you.

Thank you.

Well, that's fun.

It's always good to learn something we didn't know, learning about Ernesto Galarza and then seeing Danny the Dragon and celebrating an anniversary.

That's that's wonderful.

Uh moving on to orders of the day.

Before I begin, I'd just like to announce that we have a lot of people here to speak on a couple of issues, and so we will be limiting public comment to one minute, and that's for the whole uh council session going forward.

Do any council colleagues have any mo any changes to under orders of the day to the agenda?

If not, then I will move forward to the closed session report.

Yes, Mayor and Council met in closed session this morning to go over the items as listed on the agenda, and there's nothing to report at this time.

Great, thank you.

Next is the consent calendar.

Are there any items that the council wants to pull from the consent?

I understand that council member Kamei will be pulling 2.13 declaration of city's commitment to opposing the coercion of institutions of higher education for comment.

With that, do we have any public comments on the consent calendar?

I have no cards for that item.

Okay, then let's move to council member Kamei.

Thank you so much, Vice Mayor.

Um, I just like to um thank all who have spoken or uh sent letters of support regarding the resolution.

Uh we stand in solidarity with our hard higher education partners, um, and it's deeply important.

I appreciate all the community members, the university partners who joined us last week uh regarding uh today's resolution uh of support.

And I just wanted to go ahead and move the entire uh consent calendar.

Second.

Is there any further discussion on consent?

Don't see any hands raised, so let's vote, Tony.

Motion passes unanimously.

Thank you.

The next item is the report from the city manager, Jennifer McGuire.

Thank you very much, Vice Mayor Foley.

Um, I do have a report today.

So some time ago, I had a simple idea where city employees would step outside of their everyday roles and come together as one team to volunteer in the very communities we serve.

I am so happy to share that this idea has come to life as this Thursday, March 26th, will be the first ever.

One team, one city, one community day of service.

City employees will leave their daily activities and get out from behind their desks in many cases and take part in community service projects across the city.

Some of the projects include serving lunch at our senior centers, rolling up our sleeves for park beautification projects to plant trees and paint a colorful mural, cleaning up our trails, making cozy blankets for our furry friends at the animal care center, and so much more.

The day will start at Kelly Park, where we will deploy 600 employees.

Yes, 600 employee volunteers to various community centers, uh, senior centers and parks in all ten of our city council districts, including in District One, uh, we'll be deployed to Starbird Park and Cypress Senior Center, District 2, Great Oaks Park and South Side Community Center, District 3, Guadalupe River Trail, North Side and Roosevelt Community Centers, District 4, Coyote Creek Trail and Beriesa Community Center.

District 5, Hillview Park, Hank Lopez and Mayfair Community Centers.

District 6, Guadalupe River Park Trail, and the Gardner and Willow Glen Community Centers.

In District 7, we have Happy Hollow Park and Zoo and the Alma Senior Center, Leninger and Seven Trees Community Centers.

In District 8, we have Evergreen Park and Library and the Evergreen Community Center.

In District 9, the Dor Park Pedestrian Trail and Camden Community Center.

And in District 10, the Hoffman Neighborhood Park and Almaden Community Center.

Mayor and City Council members, you of course are welcome to join us at these locations to see our city employees in action and to recognize the passion and commitment they bring to the community we serve.

I want to sincerely thank Deputy City Manager Angel Rios for serving as the executive sponsor of this incredible event.

A big thank you also goes out to the city manager's Office of Employee Relations and Human Resources Director Aram Cuman for his leadership, Human Resources Division Manager Randy Perry, Human Resources Analyst Regina Morantonio for leading this effort and to the city's Parks Volunteer Team, Beautify San Jose, Happy Hollow Park and Zoo, and our dedicated planning committee made up of representatives from all city departments who have worked very hard to ensure we have a wonderful and meaningful day, which will help us build a stronger, more connected San Jose.

It takes a village to do something like this with 600 employees.

Would all of you who helped plan Thursday's amazing day of service, please stand so you can be recognized for your contributions and bring this vision to life.

Let's give this planning team a big round of applause.

I'm so proud of them.

And you may notice the the blue shirts that some of them are wearing.

That was that was designed by one of our city employees as well.

So that is very cool.

So thank you very much.

I I am incredibly proud of this team.

Our employees all give so much through their daily work and contributions to our city, but to contribute time through this day of service demonstrates that service is not what they do just as part of our jobs, but it's also who they are as people, as neighbors, and in many cases as members of the San Jose community themselves.

Thank you and looking forward to an amazing event on Thursday.

And I'm again super super proud of this event coming up.

Thank you very much.

That's the end of my report.

City manager, I remember when you brought that through last week, last year, and I thought, really?

But now we have so many people who are involved, and I'm just so grateful that so many of our staff people who actually actually live in San Jose as well, are out doing work in our parks and areas to beautify the community.

So thank you for organizing that, and thank you for the committee for organizing it and being present in the work that you do.

The next item is item 3.3, City of San Jose Investment Policy Annual Review.

I uh before we I turn the uh podium over to the city attorney.

I will I want to acknowledge that I will be recusing myself due to my ownership of Amazon and Microsoft stock.

So I'm gonna be leaving the meeting while this uh continues on, and someone else will it's in your hands.

I also will recuse myself due to financial conflict of interest.

Council members, it's it's now um if there's no other recusals at all.

It's now appropriate for you to select amongst yourselves somebody to act as a pro tem for this item and a motion and then a second and then a vote.

I I did not catch the audio on that.

I don't think the microphone was on.

It was it there was a motion from uh councilmember Casey to nominating uh councilmember cohen to serve as a book down okay.

It's the wrong item you're voting on, but okay.

That motion passes eight to zero.

All right, well, thank you, colleagues, and uh I know Maria and you're you're here to present our annual investment report, so we'll turn it over to you.

Um good afternoon, vice mayor, members of council, uh, city manager and staff.

I am Maria Oberg, Director of Finance.

I'm here with Cheney Sun, Deputy Director of Finance.

We do not have a presentation for you today, but we are here to answer any questions you may have.

Okay, see, that's what happens when I don't get the notes ahead of time, but thank you for thank thank you for the uh introduction of the item.

We have in front of us our annual investment report, and uh we're going to go to public comment first before we start public comment.

Just want to remind everyone to be respectful and thoughtful of their fellow um audience members and the council members.

Um we will we ask people not to cheer or boo or applaud in any way.

We want to be able to hear everyone and hear Tony calling out the next speakers.

And so with that, we will um turn it over to Tony to call our public commenters.

Thank you.

I'm going to call uh five to seven people to start.

I will keep an eye to see who's coming down.

Um I have currently about 60 cards, that's six zero.

Um, you each have one minute to speak.

Um, the reason we ask you not to cheer and we ask you to do like jazz hands or some other visual way to show your support is to allow us so that the last person in line doesn't have to wait extra time while waiting for cheers to die down.

Um I'm gonna start again with the first five to seven.

Um I have I think it's Joan Simon, but it might have said John Simon.

Alice, Dylan, or possibly Diane.

I'm not sure if there was an L in there.

Ethan, John from the Students for Democratic Society, Tamar and Shonda Whitkin.

Come on down.

And you do not have to speak in the order that you're called.

Good afternoon.

My name is Joan Simon.

I represent the San Jose Peace and Justice Center, and I am a Jewish resident of San Jose.

I am here to urge council members to lead by example, to stand with the people of San Jose to do what is ethical, just, and compassionate, to divest from the companies that profit from the brutalization and death of people.

I urge council members to have the city of San Jose divest from the genocidal Israeli government.

Stop the funding of the murder of innocent Palestinian children and the forced starvation of the Palestinian people and the murder of over 70,000 Palestinians.

I urge council members to divest San Jose from corporations cooperating with ICE.

The city should not cooperate at all with ICE, and the city needs to protect the populace from the kidnappings, murders.

Thank you.

That's your time.

Next speaker.

Hello.

We acknowledge that the land we gather in today sits on the unceded ancestral homeland of the Muekme Ohlone.

These are the words I have heard you say, and which make me so proud to be from San Jose.

Meanwhile, Caterpillar and other companies profit by selling their goods and services to groups which use them to steal land from indigenous communities.

Do you remember Rachel Corey, the brave American girl that stood in front of a Palestinian home in an attempt to block its unlawful demolition by the Israeli military?

The caterpillar that came did not stop.

It crushed her to death.

Thank you, next speaker.

Good afternoon, City Council and staff.

My name is John DeRoyan.

I'm an alumni and grad student at San Jose State and president of students for a Democratic Society at San Jose State.

This is a criminal, unjust genocide.

And I'm joining the call for you to divest from Caterpillar, Alphabet, Microsoft, Honeywell, and Amazon.

It is the rational thing to do.

It is a reasonable thing to do.

And divestment is an effective way to exert pressure on Israel until it complies with international law.

I call upon you to divest our city funds from those corporations today.

Thank you.

Next speaker.

Hello, City Council and staff.

My name is Ethan Pham, and I am a home health nurse and homeless outreach nurse here in San Jose.

I'm here to demand that the city of San Jose show up for their most vulnerable residents by introducing and passing a much-needed ethical investment policy today, which will divest city funds from companies with direct ties to ICE.

San Jose is a sanctuary city, and we should reaffirm this by divesting and barring any further investments into companies such as Alphabet, Microsoft, and Amazon who have contracts with ICE and other deportation operations.

I'm here to demand that San Jose City Council pass an ethical investment policy today that permanently divests from companies complicit in ICE tear operations nationwide.

Thank you very much.

Thank you.

Next speaker, I'd also like to call Daniel with JSU, Serrana, Dina, and Jonathan Engelman.

Come on down.

Go ahead and hi, my name is Dion.

I'm a resident of District 10 and a local educator in San Jose.

I'm calling on San Jose to follow the lead of Dublin, Alameda, and Albany to pass an ethical investment policy that would divest from Caterpillar, Alphabet, Honeywall, Microsoft, and Amazon.

San Jose, as a leading insanity city in California, should take a stand for human rights, which is not beyond the purview of the city to comment on issues related to international affairs, because there are people in this city who I've met who have been impacted by the situation in the Holy Land.

I met someone here who had many of their family killed by the bombing of Lebanon in 2024.

And ICE is coming to our airports with the technology that Amazon provides as well.

Thank you.

Thank you, next speaker.

Hello, my name is Tamar Katz.

I'm from Israel, and I live in San Jose in District 9.

I'm also a parent, and like many of you, I want the city to focus on things that matter most to families, our schools, parks, and essential services.

I'm asking you to support staff's recommendation and not add more companies to the social responsibility divestment list.

Divesting from this companies could cost San Jose three to five million a year.

That's money that should stay in our community, not risk cuts to services that affect all of us, especially our kids.

I also support the city's long-standing policy of avoiding position on foreign policies.

Taking sides in matters outside city uh jurisdictions is divisive, and districts from what I are elected to do, serve the residents of San Jose.

As a parent as a resident, and as someone who cares about our community, I asked thank you.

That's your time.

Next speaker.

Hello, my name is Shanda Whitkin, resident of San Jose's District 2, with three elementary age children, the executive director of Congregation Sheer Hadash.

I'm here to express strong support for the staff's recommendation to reject adding additional companies to the city's social responsibilities divestment list.

The city has long maintained a policy of not taking positions on foreign policy matters.

The policy reflects wisdom and restraint.

Foreign policy is complex, often divisive, and well beyond the jurisdiction of local government.

When we move into that arena, we risk dividing our community while stepping outside the scope of our mandate.

Consistency matters.

If we set aside this policy now, we erode a standard that has helped guide decision making across many different issues and moments.

We should not make exceptions based on the issue of the day.

These companies are doing business worldwide.

San Jose does not need to step in as a moral guide.

This is not the role of city government.

I care deeply about these issues globally and at home.

I also believe we must stay grounded in the proper role.

Thank you.

Next speaker.

I'd also like to call Julia Mates or Matez, Sage and Shaina.

Come on down.

Go ahead.

Dear council members, uh, my name is Daniel Klein.

I'm the CEO of Jewish Silicon Valley and a resident here of San Jose, and I share your profound frustration regarding the actions of ICE.

As a parent, the side of families being separated in our own communities is deeply personal and painful, which is why my concern about the sobering roadmap of unintended consequences of the investment movement.

According to the report by staff, this move would trigger an immediate two to five million dollar loss in a long-term revenue reduction of 15 to 35 million dollars over a decade.

Crucially, this financial blow to San Jose would have zero impact on ICE's budget or operations.

As we already face a $56 million projected deficit, I propose an alternative approach.

Explicitly earmark the 15 to 35 million in projected earnings from these companies for dedicated legal defense fund for our most vulnerable residents, and or to fund health care for those in need, and or to support our struggling schools, including the one my children attend that is currently facing close.

Thank you, next speaker.

Hi, I'm Jonathan Engelman with the Jewish Community Relations Council of the Bay Area.

One of City Council's most important responsibilities is keeping residents safe.

When this conversation expands from a narrow local investment policy review into a debate about global conflicts, it fuels division and creates a climate where Jewish residents, your residents feel unsafe.

We've seen that in recent months in Michigan and in New York, and we've seen it even here in San Jose.

Respectfully, we're asking you to keep today's deliberations focused on what you can control.

Fiscal stewardship and decisions rooted in local impact.

If the council wants to discuss values or human rights concerns, there are more appropriate tools than turning the city's investment policy into a broad geopolitical litmus test.

The Jewish community in San Jose is already feeling the effects of rising anti-Semitism.

Please keep this discussion grounded in local responsibilities and avoid actions that import global conflicts into our neighborhoods, increasing tension and harming community trust.

Thank you, next speaker.

Good afternoon, council members.

Thank you for this opportunity.

I'm Dina.

I'm a long-term resident of San Jose living in D6.

I'm here today to urge my city council to pass an ethical investment policy.

The time is now for San Jose to follow and adhere to moral principles of humanity for all.

San Jose must not participate or profit from investments in companies that are complicit having direct ties to ICE.

Each one of these companies, namely Alphabet, Microsoft, Amazon are actively terrorizing our community with their platforms.

There are ethical alternatives.

You just have to look beyond the surface.

Thank you.

That's your time.

My name is Julia Mates.

I'm here on behalf of the Jewish Community Relations Council of the Bay Area, a local organization focused on the safety, well-being, and civic inclusion of the Jewish community across our region.

We are asking respectfully that today's discussion remain focused on matters within the council's purview, particularly policies that directly impact the safety and security of San Jose residents.

In recent months, we've seen a troubling rise in anti-Semitic incidents, including in San Jose.

At the same time, we've also seen that when local bodies take up geopolitical issues outside their jurisdiction, those conversations can quickly become divisive and almost always contribute to rhetoric that makes members of our community feel less safe.

We fully recognize that people hold deeply felt views on global issues, but this council's role is to serve the residents of San Jose to make decisions grounded in local impact, where you can directly improve public safety, strengthen community trust, and bring people together.

Thank you for your consideration and your leadership.

Thank you.

Next speaker, I'd also like to call Musa with C A I R, Akemi, Wendy, Maria Lynch, and Alex.

Go ahead.

Good afternoon, Council members.

My name is Shayna.

I'm joining the call for an ethical investment to remove our city funds from any companies that are complicit with ICE and complicit with Israel, a country that has a numerous international law violations and currently carrying out the genocide of an indigenous peoples Palestinians.

Let's talk about safety.

When we look at the terrorism that we've seen ICE pull out in Minneapolis, in LA, and even in our own airports, I see clear parallels between what is happening here with ICE and what is happening in Palestine, the West Bank, and in Gaza.

And that's no that's no mistake.

We know that CBP has had uh ties with Israel's military force for decades.

And we see that in their tactics, the way that a security force is imposed on local authorities, the way they are made to detain and kidnap children without thank you.

That's your time.

Next speaker.

Hello, City Council and staff.

My name is Sage, and I'm a community member of San Jose.

I'm calling on San Jose to divest from Caterpillar, Alphabet, Microsoft, Honeywell, and Amazon.

Because these are companies that are directly that are directly facilitate ICE hairs against our immigrant neighbors in the US war machines.

And these investment amount to around 4% of San Jose's investment portfolio.

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

And I am here shaking because I am I work for one company.

And I'm just really deeply terrified that they can just get ICE to detain me or to honestly just murder me.

Um if I say the company I work for.

So that's why I still stand here to tell you to please divest for these companies.

Thank you, next speaker.

Hello, I'm Alex, a Bay Area resident.

According to the City of San Jose's most recent quarterly investment report, over 115 million dollars of our city funds are currently invested in corporations with direct ties to Israel's genocide against Palestine, including Caterpillar, Alphabet, Microsoft, Honeywell, and Amazon.

These corporations provide equipment and services which Israel uses to commit war crimes against Palestinian civilians and to enact Trump's war on Iran.

Driving up everyday costs for San Jose residents.

Divestment is an effective way to exert pressure on Israel until it complies with international law.

I call upon you to divest our city funds from these corporations today.

Thank you, next speaker.

Good afternoon.

My name is Wendy Greenfield, and I speak on behalf of the many Jewish residents of San Jose and organizations like Jewish Voice for Peace, who urge you to make it San Jose policy to make only ethical investments instead of investing our money in companies like Caterpillar Alphabet and Microsoft that together invest 38,465,000 in Israel's government and military at a time when it has been engaged in horrific genocide, opposed by the majority of people in this city, county, and nation.

These ongoing attacks also produce climate pollution, principally in Palestine, but also worldwide, producing over 31 million tons of carbon emissions in just the first 15 months since Israel's attack.

Our money should be invested in companies that support health education.

Thank you.

That's your time.

Next speaker.

I'm at all select to call Azazil, Lori Ketcher, Uriel, and Spencer H.

Hello, Council members.

My name is Musa with care, the Council on American Islamic Relations, and we want to urge you to pass an ethical investment policy and support the memorandum from council members or Tease and Cammy to divest from companies doing business with ICE.

ICE continues to terrorize immigrant communities, separate families, and erase due process and basic human rights in San Jose.

San Jose should not be complicit in that abuse.

Ethical investment is a natural next step in aligning the city's financial practices with its commitment to protect its residents.

The same weapons and technology being used to imprison and kill children in Gaza are being used by ICE to brutalize Americans.

San Jose must ensure the city's public funds are no longer used to bankroll genocide, ethnic cleansing, war crimes, or mass deportation.

Not in Palestine, not in Iran, not anywhere, and not in San Jose.

San Jose must protect all its residents and it must permanently cut ties with fascism abroad and at home.

Thank you.

Thank you, next speaker.

Hello, my name is Maria Lynch, and I am a constituent of Mr.

Mulcahi.

In July 2024, the international uh court of justice ruled that Israel's entire occupation of Gaza and the West Bank, including East Jerusalem, is illegal and violates the prohibition against apartheid.

According to a former UN official, this ruling makes BDS not only a moral imperative and constitutional and human right, but also an international legal obligation.

I also say to my friends here in the room, there is nothing divisive about standing against a genocide that our tax dollars are paying for.

Please divest from these companies and free Palestine.

Thank you, next speaker.

Thank you.

Good afternoon.

I'm a Kemi with the Immigrant Protection and Empowerment Network, cross sector collaborative across the county, and I'm here to urge you to support the memo from Council members Ortiz and Kameh, uh, restricting new investments in companies that provide services to ICE.

This is a reasonable step, and you all have provided really strong leadership for our city in San Jose and as a model for cities across the county and across the region.

You've been leaders in stepping up for no staging zones for no masking for your de-escalation plan.

So I ask you to continue to follow those values in providing concrete benefits to community and also value based in uh approving that memo.

Thank you.

Thank you, next speaker.

Good afternoon, council.

My name is Uriel.

I'm with community service organization in San Jose, uh San Jose resident, and the three is more specifically resident.

I'm here in support of the memo put forth by Peter Ortiz and uh Rosemary Kamei to let investments in Amazon, Microsoft, and Alphabet who have direct ties with ICE to mature and prohibit any new investments in those possible uh in those companies.

We have seen ISIS direct impacts in our communities here in San Jose with deportations of South Bay families with uh kidnappings and even just recently ICE agents pulling a gun at community members for entering a lobby of a building down in Southside San Jose.

We cannot permit ICE to have such uh harm in our communities.

We need to stand with our community members as you all have in passing the anti-masking policy, reaffirming our sanctuary state.

Thank you.

That's your time.

Next speaker.

Hello, my name is Spencer.

My wife and I have been living in D6 for almost 40 years.

I have devoted countless hours as a volunteer serving on multiple city boards and commissions.

According to staff's unbiased memo, San Jose already foregoes half a million dollars a year boycotting investments in three companies.

Now some are suggesting that we add five more names to this list, bringing the annual price tag to five million dollars.

Investment boycotts have no impact on national nor international affairs.

How can we possibly justify losing five million dollars in investment income per year when we face a $56 million deficit?

What programs will be cut?

How much police overtime will be canceled?

Staff calls this investment boycott untenable.

I urge council to uphold fiscal responsibility and fiduciary duty as core civic duties and values.

We have also heard some inflammatory comments on foreign policy today, which resides.

Thank you, that's your time.

Next speaker, Moran.

Um, I'm I think it says Yarn.

Last name starts with Jay.

Um last name starts with M, and Avery Kaufman.

Come on down.

Go ahead.

Good afternoon, City Council and staff.

My name is Azazel Homequist, and I'm a district six member, the District Six resident of San Jose and a surge member.

The people that suffer here and abroad need our support and divest.

ICE unethically and unlawfully detained and incarcerates places, places like CICOT continue to be a risk.

The decision to divest matters.

I know because I am a survivor of multiple traumas and aligning our values further to protect our undocumented immigrants is a must.

Please do not listen to the rare occurrences in the news that are good and bad everywhere.

Our decisions absolutely matter.

Two months after our mayor criminalized our unhoused, so did Trump.

Let's set a better example and hope others continue to follow suit.

I'm here to demand the city council city San Jose show up for their most vulnerable residents by introducing and passing a much needed ethical investment policy today, which will divest city funds from companies with direct ties to ICE.

San Jose is a sanctuary city, and we should reaffirm that this.

Thank you.

That's your time.

Next speaker.

Hello, council.

My name is Lori Catcher.

I am a 23-year voter in D6 and a member of showing up for racial justice.

I urge you to support the memorandum from Council members Ortiz and Kameh to restrict new investments in companies that provide a services to the U.S.

immigration and customs enforcement.

This is a reasonable and important step toward the city of San Jose more fully divesting from corporations that do business with ICE.

Updating the city's investment policy and practices in this way is important to me as a taxpayer, as a longtime resident of San Jose, and as a mother of three young adults.

Ethical investment means that we actually care and support all children.

So I ask you to make this step.

Thank you that's your time.

Next speaker.

Hello, my name is Yaranine.

I live in San Jose in District 10.

I urge the council to reject divestment.

We're already in a deficit and cannot afford it.

And keep the city out of foreign affairs.

I would like to also press on the hypocrisy.

The groups promoting divestment claim the moral high ground.

They tell us companies like Microsoft, Google, and Amazon are evil because of their commercial ties to entities they don't like.

But do they actually live by these rules and values?

I would bet most of them use these companies on daily basis, using Google search, Android phones, Microsoft Windows Office at home and work, and getting their Amazon Prime packages.

This is nothing but virtuous signaling without the personal sacrifice.

They want the moral win without any personal pain.

In short, it's hypocrisy.

Thank you.

Thank you, next speaker.

Good afternoon.

My name is Mohan.

I'm a resident of San Jose.

I grew up in Israel, lived there most of my life until the past year.

And I'm here to encourage you to follow the decision that was very smartly made by this console many years ago, not to decide and to even discuss a foreign policy matters.

There is a lot that you cannot know from here about what's going on in Israel or any else in the world anywhere else.

So many people here attempt to tell my story and they say it all wrong.

So many details that are not being told about the wars there.

And I don't think this is the scope and the place to decide what is ethical and what is not.

So many times in the past three years I had to run for my life with my children.

Thank you that your time.

Next speaker.

Go ahead.

Dear members of the city council, I support the city staff's recommendation to reject adding companies to the divestment list.

It violates the city's fiduciary duty to manage assets for the benefit of all residents.

City staff estimates that divestment will cost the city up to five million dollars annually in lost investment income.

This will result in significant service cuts when the city struggles with a 56 million dollar deficit.

I also support the long respected city resolution rejecting any action which on foreign policy, which divides the community and lies outside the city's scope and jurisdiction.

Thank you.

Thank you, next speaker.

Dear city council members, my name is Yaron Marks.

I live in San Jose in District 9.

I'm here to urge you not to accept Councilmember Ortiz and Kamehameha.

Um I believe that this is a wolf in the ship closing.

We already see what is the impact and for us as a minority here in San Jose.

Whenever that type of items are being brought up, we are fear for our lives.

We see our security being harmed.

We need guards in schools and around synagogues, and we definitely need to prevent that.

The city should focus on covering the deficit in our budget and not adding additional deficit as expected.

We urge you to follow the financial team requirement or recommendation.

Thank you very much.

Thank you, next speaker.

Hello, I'm Jack from San Jose Against War, and I want to urge you to support an ethical investment policy.

The question today is not whether or not Israel is committing genocide.

The question is, will we be complicit in funding companies guilty of this genocide?

As much as some people would like to pretend it isn't so, our local investments do have impacts across the globe.

You can say it's none of our business when it isn't our investments here killing people on the other side of the world.

These companies, Alphabet, Amazon, Caterpillar, Honeywell, and Microsoft are integral to Israel's genocide.

And while Israel does the killing, these companies make a killing.

When these companies are held accountable for their war crimes, when they go bankrupt paying reparations for the damage they have done, what will that do to the stock market?

What will that do for these investments?

And is this the legacy that we want to leave for future generations?

When we have budget shortfall.

Thank you, that's your time.

Next speaker, also Yi Saul Bloom, Maria Wong, Naomi Cohen, and Philip.

Come on down.

Go ahead.

Hello, my name is Anna Stepanenka, and I am a long-time local resident with family and friends in San Aze, mostly in districts 10 and 1.

I urge the council to reject any divorcement policy.

For my entire career, I worked at high-tech companies.

I'm a software engineer.

Those companies have been an engine of progress, bringing wealth and jobs to Silicon Valley.

And today, here in the heart of Silicon Valley, we hear the city council members calling for divestment from such companies.

I have many friends working at Google and Amazon who are proud of their jobs.

Most of the offices I worked in used Honeywell products.

Thank you, next speaker.

Good afternoon.

My name is Ishlomit Bloom.

I'm a longtime resident of San Jose.

Let's ask a simple question.

Who are the people behind the calls for BDS?

Are these justice seekers who stood up against the atrocities in Syria?

Did they call for boycotts against Sudan, Iran, or Turkey?

No, they did not.

Because this is not about human rights, it's about opportunity.

They were waiting for a chance to target Jews and Israelis.

Notice how they didn't not take to the streets to protest the massacre of Jewish lives.

Instead, they mobilized for one thing: a campaign of pure anti-Semitism.

They are infiltrating our schools, our businesses, and harassing private individuals.

Thank you.

That's your time.

Next speaker.

Good afternoon, Council members.

My name is Maria Wong.

I'm a community activist who spends most of my waking hours every week here in San Jose, seeing firsthand the issues that impact our daily lives.

I want to urge the council to reject calls for divestment, such action, risk worsening the city's existing budget challenges, and deepening the deficit.

Ultimately impacting essential services that residents and the greater community rely on every day.

At a time when resources are already stretched, we must prioritize fiscal responsibility and protect funding for core community needs.

From my understanding, the city has a longstanding policy first adopted in 1979 and reaffirmed in 2016 that the council should not take positions on matters of US foreign policy.

That policy exists for a reason.

It recognized that international thank you, that's your time.

Next speaker.

Good afternoon, Council members.

I'm Nomi, a local resident, and I support city staff's recommendation to reject adding companies to the divestment list.

As others have stated, the city is already operating at a significant deficit and cannot afford the millions of lost investment income.

Divestment would violate the city's fiduciary rights to its residents, uh, fiduciary duty.

Furthermore, the city has a long-standing and long respected res resolution to reject any action on foreign policy, which lies outside the city's scope and jurisdiction.

Thank you for your consideration.

Thank you, next speaker.

I'd also like to call Drusy, Edit, or maybe Edith.

Lisa Adakari and Yoon come on down.

Go ahead.

Hello, City Council and staff.

My name is Philip.

I'm an alumni of San Jose State, and I now work in San Jose and I'm an SCIU 521 steward.

I want to echo what a number of community members have stated and emphasize the question how do we show up for our most vulnerable community members in San Jose?

We have investments in companies that have historically facilitated the ripping apart of families and killing of people at home and abroad, with Alphabet having a partnership with Lockheed Martin to make their weapons kill more efficiently, as well as CBP to make their tactics of surveilling the border more deadly.

Then there's Microsoft who has supplied their Azure Cloud software to the Israeli military to more efficiently track and kill Palestinians, commit war crimes against Palestinian men, women when when men, women and children, Microsoft is also enabling ISIS abductions and concentration camp operations that have killed ins innocent people.

Keith Porter, Renee Good, Alex Predi, and the rising number of people who have died.

Thank you, that's your time.

Next speaker.

Good afternoon, Council members.

My name is Igar Bloom, and I've been a resident of San Jose for 37 years.

I'm here to remind this council that your primary duty is to ensure the well-functioning services of the city.

You should refrain from entangling yourself in complex international affairs or dictating how major US corporation, which employs so many of our neighbors, conduct their businesses.

Furthermore, I urge you, do not fall victim to this latest attempt of the BDS movement.

Their ultimate goal is to cease the existence of Israel as a Jewish nation's homeland and to eliminate any potential for a two-state solution.

Remember, BDS was founded in 2005, the same year Israel withdrew from Gaza, despite continued Israel proposals to a two-state solution, at least until 2014.

Thank you that's your time.

Next speaker.

Thank you.

Thank you.

Next speaker.

Honorable council.

San Jose's policy to reject foreign policy as a subject for council deliberation is just.

What does Pakistan have to do with anything?

It was negotiated by the British between the Muslim League demanding a separate homeland for Muslims, and Indian National Congress reluctantly accepted to avoid civil war.

So a huge country, Pakistan, was torn violently off of a bigger country, India.

It was done in haste, but it was done, and now nobody is trying to undo Pakistan.

They're lucky.

Thank you, next speaker.

Hello, San Jose City Council.

My name is Lee Sadikari, District 3.

America has been at war, 92% of our 250 year history.

What does this say about us?

The top three countries with proven oil reserves are Venezuela, Saudi Arabia, and Iran.

This year we adopted adducted Venezuela's democratically elected leader who is nationalizing their oil.

What does this say about us?

The US and Israel just started an illegal war of aggression with Iran and bombed an elementary school, killing 180 people, mainly schoolgirls aged seven to twelve.

What does this say about us?

Stay objective and don't get involved in foreign affairs are ridiculous as excuses at this moment.

The US is a global superpower.

What we do locally reverberates worldwide.

That responsibility trumps objectivity.

We ask for ethical investments that align with international and domestic law and reflect who we want to be.

Thank you.

Thank you, next speaker.

I'd also like to call David Tim Fan, Mila Bekelli, and Lila Salinas.

Come on down.

Go ahead.

Good evening.

My name is Bita.

I oppose this divestment proposal.

As an Iranian American, I am deeply concerned by the conspiracy thinking surrounding this issue, and by the way, people who are not Iranian are using the Iran war to push on related local political agendas.

We as Iranian Americans appreciate President Trump's military intervention.

This proposal does not improve public safety, does not ascertain city governance, and does not solve the problems it's its supporter claims.

Please reject the divestment effort.

Thank you.

Thank you.

Next speaker.

The genocide convention says that complicity and genocide is punishable.

The convention holds that preventing and punishing acts of genocide is obligatory, not optional.

Should any of the 153 parties to the convention pursue efforts to uphold their obligation, Microsoft, Amazon, and other companies would face legal consequences for their complicity.

If San Jose is not swayed by ethics when choosing its investment portfolio, it should consider the financial consequences of holding companies that will face legal liability or just market bash backlas from investors or consumers.

And an obvious question.

How can staff project a loss when they don't know what investments would replace Amazon, Microsoft, etc.

in the portfolio and what those um uh subsequent performance would be.

There is opportunity cost to the city's choices.

When the two cities chooses to invest in profiteers of blood money, the city is also denying support to thank you that your time next speaker.

Hello to San Jose City Council and staff.

My name is Tim, and I am an animation student in SASQ.

I, along with thousands more community members, demand our city to pass on an ethical investment policy that will permanently divest from corporations which take part in ISIS illegal raids and the illegal war in Iran and the Palestinian people.

In three years, we have used our taxes to harass and destroy a people's race in our culture when we could use it to find our infrastructure and house the unhoused.

Now Donald Trump wants to further threaten world peace with unquote weapons of mass destruction.

Today Americans are unemployed and our cost of living is getting higher.

Please find better ways to spend our money than on war on inflation.

No more money to caterpillar, Honeywell, Alphabet, Amazon, or Microsoft.

Thank you.

Thank you, next speaker.

Hello, City Council.

My name is Lila Slinus.

I'm part of the Community Service Organization San Jose, and I'm here to support the memo put uh forth by Councilmember Ortiz and Kamei.

There's been a lot of uh, you know, statements and questions about what the council members are supposed to do.

Your job is to uh hear the voices of your people and meet their needs.

Okay.

Trump's administration is currently terrorizing many of the residents that are in your districts.

San Jose is a city of immigrants, over 40 percent.

Okay.

So what you do here today will not only reverberate within San Jose, but worldwide as well, and as well as Trump's administration.

So you need to divest now.

Thank you.

Thank you, next speaker.

Good afternoon, Council members.

My name is Lilac Affree.

I'm a San Jose resident, District 9, and I'm here to oppose the divestment from the industry.

Uh, as a San Jose resident, uh, I strongly oppose this approach.

I believe it could have a negative impact on the city's budget by increasing its deficit significantly, and therefore have a direct effect on our residents.

These businesses are an important pillar of the local economic and community framework, and I encourage the city uh to look for ways to strengthen the relationship with the industry rather than weaken it.

And I'd personally be happy part uh to be happy to be part of this uh partnership.

I also believe that this divestment agenda is politically motivated, and I urge you to vote against it.

The council's responsibility is to its uh residents, not to foreign affairs overseas.

Therefore, I respectfully ask you to act in the best interest of your own.

Thank you, that's your time.

Next speaker.

Thank you.

I'd also like to call Chaim Cohen, Charlotte Casey, and Dash Leeds.

Go ahead.

Uh my name's David.

I'm a longtime resident of San Jose.

I'm here to oppose additional divestment.

Um addition to the questionable use of divestment to achieve those aims.

I want to would like to point out the similarities between those that would demonize our immigrant community and those that would demonize Israel and by implication uh much of the Jewish population in our city.

Those who demonize the immigrant community see um the natural flaws and imperfections and exaggerated to label them as murderers and rapists.

And those that demonize Israel see it's obvious mistakes and imperfections and exaggerated to label it genocide.

Um there are those that don't refuse to see the benefits that the immigrant community brings to our city, and there's those that refuse to see the benefits that Israel brings up.

Thank you, that's your time.

Next speaker.

Good afternoon.

My name is Mila.

I am a university student, born and raised in San Jose, and I'm a resident of District 3.

Like many of my neighbors, I am here today to call on our city to divest from companies with ties to ICE, immigration detention centers, prisons, and the US and Israeli militaries.

We know the ethical lines these corporations have crossed and will continue to cross.

Some have manufactured weapons used to kill children in their classrooms.

Others have supplied web infrastructure to ICE, and others have profited from mass incarceration, making the U.S.

incarceration rate fourth highest of any country in the world.

We can't claim innocence or distance when we know our city's money is enabling these business practices and the inhumanities that have resulted.

San Jose's investments should promote the future we want to build, because these investments truly do shape the course of future events.

The Artiz Comme memo is a necessary step towards an ethical investment policy.

Thank you.

Thank you.

Next speaker, thank you very much.

My name is Haim Cohen, and I am a San Jose resident.

The current divestment policy already costs San Jose nearly $500,000 annually.

Adding five more companies could increase that loss to tenfold to five million dollars.

I must caution the council against using our investment policy as a tool for national or international politics.

Doing so opens a Pandora's box.

Once you begin, various groups will constantly pressure you to divest from whatever supposed evil they abhor, whether it's specific countries or companies.

Who decides what is ethical?

The council risks getting bogged down in endless political debates instead of focusing on managing our city.

By entertaining this divestment action, you invite special interests to turn our budget into a political battleground.

Our investment policy must be based on sound math and fiscal stability, not a revolving door of political demands.

This is your fiduciary responsibility to the town.

Thank you that your time.

Go ahead.

Good afternoon.

My name is Charlotte Casey, and I'm pleased and happy to be here on a day honoring Ernesto Galarza, who was such an important figure for social justice and fighting for the farm workers.

And I urge you to maintain and preserve the beautiful piece of public art that's located along the Paseo de San Antonio that honors his memory.

And in the spirit of social justice activism that he embodied, I urge you to adopt an investment policy that is ethical, that divests from the companies that are involved in terrible, horrific war crimes and suffering throughout the world.

Thank you.

Thank you, next speaker.

Hello, my name is Dasha Leeds here representing just myself right now as a San Jose resident.

The city has already made significant investments to protect its residents from ICE.

And it makes sense to be consistent with our existing actions by not investing in the companies that enable ICE.

Otherwise, we're feeding the mouth that bites us.

I think it's an incredibly local issue.

It affects our friends and neighbors.

The memo from Ortiz, Councilmember Tiz and Kameh is a great start.

Hope you consider it.

Thank you.

Thank you, next speaker.

Good afternoon.

My name is Lisa Chapontier, and I'm a mom, a member of the California Donut Economics Coalition for Cal for Common Good and a resident of downtown San Jose.

Donut Economics views the purpose of the economy as human and ecological thriving and meeting our needs within planetary limits.

Therefore, the ethical foundation of our economy should be common good for all.

Reciprocity, responsibility, and our economic success metrics should be health, equity, ecological stability, resilience, and ultimately thriving communities.

So our financial investments have real life moral implications.

Today I urge you to stand firmly on the side of peace, justice, and human dignity, and show that San Jose is against genocide and human rights abuses.

And as we invest to strengthen flourishing within our city, we must remain mindful that as a sanctuary city, our morality.

Thank you.

That's your time.

Next speaker, I'd also like to call Florence Anderson, Shirat Lin, Chris Bedford, and Jeff W.

Come on down.

Go ahead.

My name is David Riewer.

I am from Caracas, Venezuela.

I work in San Jose.

I oppose this divestment policy, which is misguided.

I hear people talking about justice, rights.

Should San Jose divest from Mexico and China?

Let's talk about justice.

How about the drug trafficking problem and all the drug deaths all over the US and San Jose included?

Should the US div uh should San Jose divest from El Salvador, Russia, Ukraine, Iran.

This is a ridiculous policy.

It is uh designed to hurt one country and one people.

And it is a fake uh attempt to defend human rights.

Thank you.

Thank you.

Next speaker.

Good afternoon.

My name is Mani Bakala, and I'm a high school junior from downtown San Jose.

I'm primarily an advocate of climate action, but I am here today in solidarity with human rights activists, urging you to uh work towards an ethical investment policy that divests uh city dollars from corporations that work with ICE, the military of Israel, or any other military responsible for repeated war crimes.

There is no, and I think uh Council members Ortiz and Kameh for their memo as an important step towards this.

There is no more urgent duty of a government than to protect children and to build a safe future for us.

Right now, ICE and other federal agencies are abducting children, separating them from their families, sending thousands of them, uh sending them thousands of miles away and blocking them up for months in horrific conditions that are sometimes deadly.

The Israeli military has also killed thousands of children in Gaza and continues to do so despite the ceasefire.

Uh, please divest from these companies as quickly as is possible.

Thank you.

That's your time.

Next speaker.

Hello, City Council.

My name is Florence Anderson.

I'm a mother and oncology nurse in District 2.

Ethical investment is the least we can do, and one of the best ways to take nonviolent action toward justice and humanity.

No amount of money is worth the blood of innocent people or the stability of our climate.

Other Bay Area cities like Dublin and Albany, along with Alameda County, have already taken the courageous step of passing an ethical investment policy.

I'm calling on San Jose to divest from Caterpillar Alphabet, Microsoft, Honeywell, and Amazon, which directly facilitate ICE's terror against our fellow humans.

These investments amount to around 4% of San Jose's investment portfolio.

Can we really not think of a better way to invest that 4%?

There are alternatives that I urge you to explore.

I, along with over 2300 other people, have signed a petition demanding that you divest all city funds from Israel's genocide against Palestine.

Over 50 community organizations, nonprofits, and small businesses have endorsed the petition as well.

The banality of evil is the idea that great atrocities are often committed not by fanatical.

Next speaker, hello, my name is Jeff.

I'm a longtime resident of San Jose and representing the Jewish Democratic Coalition of the Bay Area.

Losing income of three to five million dollars per year every year.

I'm wondering what services will you cut.

And uh the uh only thing that the finance people found was a $600,000 contract from Microsoft with ICE.

Uh this proposition is a Trojan horse, it's divisive.

And are you going to restrict citizens from working for the companies facing divestment?

Uh what are you gonna lose?

What are you going to gain?

I think you're gonna lose a lot more than you're going to gain.

Thank you.

Thank you, next speaker.

I'd also like to call Inga, Greg, Maddie, and Sidamina Ortiz.

Come on down.

Go ahead.

Yeah, my name is uh Sherat Lin and I come here to to support the memorandum of uh Peter Ortiz and Rosemary Kamei to uh divest from and you know not invest in in these companies that that are uh complicit with ICE and with genocide.

I want you to think of this as uh as a very domestic issue that the ICE you know impacts our local residents, and and that's why it's important for the city to take a position defending our our local residents and the connection the the connection to Israel, apart from its genocide, is is that it actually trains ICE so it has a direct role in in the kind of tactics that ICE uses.

So please um approve the the memorandum and and divest from um human rights violations.

Thank you.

Thank you, next speaker.

Hello.

Good afternoon.

My name is Chris Bedford, and the gentleman just gave me a great segue regarding the training uh that the Israeli occupation forces provide ICE and how to be more brutal, how to uh brutalize our immigrant communities and how to shoot non-immigrants in the face.

I'm really horrified by that.

Um, my background is Mexican American and Jewish, and my wife's Filipino, so I have strong connection with immigrant communities.

And obviously, I have a strong connection with the Judaism, which is like uh the background of my family.

And I want to um urge you guys uh on the council, please don't fall for the argument that any criticism of uh of Israel is anti-Semitic.

Um, the rabbi that I follow, uh Rabbi Yaakov Shapiro will tell you um, encourage people to look at him.

Um, and here's message that uh uh Zionism is is identity theft, it's theft of Jewish identity.

And by aligning ourselves with genocide, Jewish community.

I think that makes sense that's your time.

I'd also like to call Marcel to come on down.

Hello all.

I'm from the Central Atlanta Mostok, and I want to thank you for recognizing Ernesto Galarsa, who is one of our most honorable men that defended uh workers here in California and all over.

So thank you so much, and I hope that you uh continue to support uh Ernesto Galarza for his contribution to the defense of undocumented people, especially.

I also want to thank uh uh Councilman Ortiz and Kamei for the for the proposal that they have made in regards to the divestment um ICE and also um uh uh recognizing that all these corporations are responsible for the genocide of our gente, our children that have been locked, uh, that have been kidnapped from ICE and uh we uh have thank you.

That's your time.

Next speaker.

I'm sorry, that's your time.

Hello, City Council and staff.

My name is Marceau, and I am a community member of San Jose.

I am here to demand the city of San Jose to show up for the most vulnerable residents by introducing and passing a much needed ethical investment policy today, which will divest city funds from companies with direct ties to ICE.

I see this as an educator for the people in San Jose.

I say this as a surrogate fodder to the people in San Jose.

My ties to the immigrant community are vast.

San Jose is a sanctuary city, and we should reaffirm this by divesting and barring any future investment into companies such as Alphabet, Microsoft, and Amazon who have who have with contracts with ICE and other deportation operations.

I'm here to demand.

I'm sorry, that's your time.

Next speaker, also I've called all of the cards that had names written on them.

If you did not hear your name, please line up.

And if you had submitted an anonymous card, please line up.

Thank you.

Go ahead.

Hello.

The groups promoting divestment claim the moral high ground.

They tell us companies like Microsoft, Google, and Amazon are evil because of their commercial ties to uh entities they don't like.

But do they actually live by those values?

I'd bet most of the youth, uh most of them use the companies on a daily basis using Google search on their Google Android phones and Microsoft Windows Office at work and getting their Amazon Prime packages.

This is a virtue signaling without the personal sacrifice.

They won the moral win without any of the personal pain in short of hypocrisy.

And I think this call for divestment opens also the door for hostilities, further hostilities against Jewish community, claiming it all in is done in the name of peace, but it isn't.

It actually is hostility.

Thank you.

Next speaker.

Good afternoon, City Council member.

My name is Greg, a resident of D8, and I'm here to call for an ethical investment policy and a divestment from this current uh policy initiative that is being taken.

Uh, we want to be able, as San Jose to know that we can divest from companies that are complicit with ICE's terror operations nationwide.

This city council already voted for the public for public spaces uh that are owned by city property to not be used by ICE.

Um the mayor and city council's memo outlines a policy alternative into US Treasury bonds.

I think it's a wise decision that the city council can use, and it should be further researched with different resources available.

Funding software companies like Alphabet, Microsoft, and Palantir purposely designed facial recognition software, and they allies themselves with customs and border patrol, which could possibly be used by our flock cameras that we have.

Funding this private prison sector is also something that we don't want to be initiative of.

Thank you very much.

Thank you, next speaker.

Hello, City Council and staff.

My name is Megan and um resident of D9.

Um I am here to demand that the San Jose City Council pass an ethical investment policy today that permanently divests from companies complicit in ISIS terror operations nationwide.

The city currently has 15 million invested in Alphabet, whose subsidiary, Google, is integral to ICE's detention and deportation operations, and which has direct contract with Lockheed Martin and Customs and Border Protection, supplying AI and technology to the US Mexico border.

The city also currently has 12 million invested in Microsoft, which for years has maintained secretive, ongoing and increasing business relations with ICE.

The city also has 31 million invested in Amazon, which provides crucial technology to ICE, CBP, and DHS, which they use to track, monitor, and deport immigrants, our neighbors.

We must not be complicit in Trump's terrorization of our immigrant neighbors.

Please divest.

Thank you.

Thank you.

Next speaker.

Hi, my name is Serena Meiger.

I'm from District 6.

Um I'm a biologist.

And I want everyone to have a healthy and livable future.

Calling on San Jose to divest from companies which directly facilitate ICE's terror against our immigrant neighbors and the U.S.

war machine and intensify the climate crisis.

In 2020, City of San Jose aligned with its constituents' values and chose to amend city council investment policy so that the city would make no new direct investments in entities that directly engage in exploration, production, and refining or marketing of fossil fuels.

The president has been set, letting justice and equity guide investment decisions.

Not only do armed conflict inflict humanitarian and economic damage, but environmental damage, intensifying the climate crisis and biodiversity crisis.

Please divest.

Thank you.

Thank you, next speaker.

Okay.

So first of all, my answer they raise um and under the constitution, you guys, the committee cannot put any um regulations saying so the time limit did not count.

That's against um our rights.

If you guys are here to actually listen to us.

So under the constitution, you guys are breaking the law.

I need you to go on topic.

Um topic is the investment policy.

Oh, the policy.

Yeah, the topic is the investment policy.

So if that's the topic, then I'll be back with my lawyer, so to make sure that he'll that you guys listen.

Thank you.

Have a wonderful day.

Thank you.

Um, that was the last speaker back to council.

This mic microphone, I'll have to hold the button down, I guess.

Um thank you everyone for being here for your comments for the respectful um input to the council.

Just to set the stage, I want to uh turn it over for Maria for a second to just make sure we understand the underlying uh staff recommendation, which I think has important an important element that that is expected that has to move forward today, and I want to understand um just give a little explanation of what what the underlying motion is and its importance.

Apparently I have issues with microphone too.

Um what we need council's approval for today is um to approve the updated City of San Jose investment policy.

As you have before you, it's been referred a couple of times.

It might not be in your full package.

Um, but basically the updates we have made to the policy right now is just an updated primary dealer list.

Those are the um companies or the dealers from whom we can buy securities in our investment.

And it is an annual requirement for the council to adopt the investment policy.

So that's the one thing you need to do today.

Okay, thank you.

So yeah, so adopting the investment policy and accepting the staff investment report is the underlying recommendation.

Now I'll turn to my colleagues, uh, Councilmember Ortiz goes first.

Thank you, uh Councilmember Cohen.

I also want to thank everyone who's coming out here today to share your your uh input, regardless of the position in which you you hold.

I um truly appreciate everyone here speaking freely um and just their personal truth.

Uh and I say that um realizing that you know the memo uh that myself and Rose uh Councilmember Kamehav have introduced doesn't necessarily do anything that was asked of us today by by the individuals.

It's it's essentially a a third, a third option.

We're not um motioning to divest from Israel or for getting involved with foreign countries.

Um we aren't necessarily divesting it uh at all.

Uh what we're what we're hoping to do is to allow our current investments to mature and cease divesting in ICE in the future.

Um, so that we can make sure we are continuing this council's track record of defending our immigrant community and ensuring that our city's financial decisions reflect our commitment to protecting them.

Today's vote is about holding companies accountable.

While we understand that companies can choose who they do business with, when those choices involve profiting from terrorizing our residents, there should be consequences.

As a city council, we represent the values of San Jose.

And we've been clear, both locally and in support of state legislation that we do not support ICE, and we don't support companies that profit off of collaboration with ICE.

Who we invest in needs to reflect that same level of commitment.

Families being separated, children torn away from their families, children being used as pawns in order to target their parents, women being sexually assaulted, women testing positive for being pregnant as they're being detained when no one else other than ICE officers and border patrol would be the ones to uh cause that sexual uh act.

Um, you know, not just in our words, we need to make sure that we're advocating for our immigrant community in our in our actions.

And we cannot say we stand with immigrants while continuing to invest public dollars in companies that benefit from their suffering.

It has given me great pride to see this council rally around our immigrant community.

And this is about continuing that work, and that work solely.

We have taken strong positions to protect our residents from ICE, and we've been leaders in the county and in the state, and honestly, in the nation.

Today is our opportunity to make history again by being the first municipality in this country to stop investing in ICE.

And so uh I know that there are concerns about potential budget impacts.

And so I just wanted to ask uh Maria.

I know that, you know, and this is not necessarily the same act that we're doing, but as mentioned by speakers, there have been other uh municipalities and counties that have divested.

Has there been any sort of reports?

Uh and obviously we're doing ICE, not Israel.

Has there been any reports of negative consequences from those decisions?

I honestly cannot say uh council member.

I have not read anything on any of those cities, what their financial impact has been.

I would assume, however, they had what we would if we were to stop investing in these companies.

There is the opportunity cost loss.

We know that these companies trade at a um spread over treasuries.

They are currently the most safe uh investments we have, so have the lowest um investment yield, and corporates obviously take on a little bit more risk on that.

So there is a premium on top of the treasury yield.

It can be anywhere depending on the company and the day.

You know, we looked the other day, we we looked at three companies and they were about 55 basis points higher than the U.S.

Treasury.

So from that standpoint, from not investing in that corporate, you would lose out on that um premium on your investment yield.

So from that aspect, it is a negative impact, but it's not a loss.

So these three companies are the only ones that are presenting this level of return.

No, no, no, no, no.

Those were just um an analysis we did um earlier this week.

So that's just an example, but they do trade at a spread over treasury.

Thank you.

That that's pretty much proves my point.

There's no shortage of reputable high performing options that do not profit from immigration enforcement, that do not profit on terrorizing our kids, on terrorizing our families, individuals who we have sworn to defend.

And so the City of San Jose does not need to rely on profits tied to companies supporting terror in our very own neighborhoods.

And so, with that, I'd like to make a motion uh to move the memo signed by Councilmember Kameh and myself.

Thank you.

Sorry, I forgot because I'm not usually in this position.

Thank you, Councilmember Ortiz.

Okay, now we're turning to Councilmember Kamei.

Thank you so much.

And I want to thank everyone who um uh came out to speak today, as well as we certainly have gotten a lot of uh emails and different messages uh on your um uh different perspectives.

I want to thank city staff especially for uh going above and beyond all of the information.

I had uh specifically thought that it was just looking at the uh uh financial situation in terms of what it would cost us.

So uh I know you provided a lot of information above what uh you know I had requested.

Um so I want to say thank you so much for the information.

Uh my understanding is that uh we are really focusing on what is local and what affects our community here.

So I want to kind of separate a little bit about the you know geopolitical and all of that.

There are a lot of things that we're not able to move forward on in terms of looking at our own council policy 0-11.

And so, you know, I think that the memo that Councilmember Ortiz and I have put forward really follows a lot of the work that we have already done in terms of looking at what ICE has done to our local community.

And so our recommendation specifically responds to businesses with ICE, and uh whether it's direct contact or third party services arrangements.

I think that it is uh at the local level and not at the uh foreign affairs level.

Scenario two in the um in the memo that was um uh presented by staff is the most responsible option before us because it limits future investment, it doesn't just cut it off right at right now uh and allows for uh thinking about putting those investments, not that they're gonna go to zero, but that those investments into other entities.

So I therefore support the motion on the floor and look forward to the discussion of my colleagues.

And I had a question to for the um for the um uh count our council uh in terms of because we have a few missing members here, uh we still need six votes for anything that is moved forward, correct?

That's correct, Council.

You need a majority of the city council, so that would be six.

Okay, regardless of those who are absent, right?

That's correct.

Okay.

I just wanted clarification on that so that we can know that.

All right, thank you.

Thank you, Councilmember.

Um, next is Councilmember Casey.

Thank you.

Uh I guess interim mayor Cohen.

Uh I saw my challenge is on a policy level.

I appreciate my colleagues and their memo, um, but I don't I don't think it's sound policy.

It's an unstructured directive.

A sound policy requires clear definitions, an objective criteria, consistent application rules, and administrative feasibility.

And this memo lacks all four.

It lacks definitional clarity because we don't know what's necessarily being regulated.

The memo hinges on companies that have, quote, ties to ICE, but never defines what qualifies as a tie, whether indirect relationships count, whether scale or materiality matters.

Without definitions, this policy has no clear scope.

Um that means staff can't reliably determine who is in compliance and who is out of compliance.

This is not the hallmark of a operational policy.

Um it also lacks decision rules.

How's it applied?

The real policy answers what triggers action.

This memo does not specify a threshold, for example, percentage of revenue or contract size.

It doesn't have a standard of evidence.

We basically, I guess, quoted a Forbes article.

Um, if that's the litmus test from now on moving forward, as long as a company appears in some article that we don't like, we're not gonna invest in them.

And there's no consistent evaluation method.

So instead it relies on a case-by-case interpretation.

Uh that transforms policy into a discretionary judgment call, not a rule-based system, which is the opposite of how investment governance is supposed to function.

It also lacks internal um consistency.

Why these companies?

The memo targets a small set of companies, but many companies have federal contracts.

Many industries intersect with immigration enforcement.

The memo provides no principle explaining why these companies and not others are included.

This creates a selective application without a limiting principle.

This is not a policy, it's an ad hoc selection.

Now to administrative feasibility.

A policy must be implemented by staff.

Your implementation would require continuous monitoring of global corporate relations, interpreting indirect and evolving contracts, making subjective determinations without with incomplete data.

The finance department already indicates that this type of screening in their memo would be untenable to administer.

A policy that cannot be consistently administered is functionally not a policy.

It also conflicts with the structure of our existing framework.

The city's investment policy is rules-based, quantitative, and designed for consistency and auditability.

This memo introduces qualitative, undefined criteria, subjective interpretation, and open-ended scope.

This is not an amendment, it's a departure from the policy model itself.

So the bottom line in terms of the memo, this is just not just controversial, it fails to meet the basic test of what a policy is.

It's undefined in scope, unclear in application, selective in targeting, unworkable in practice, which means it cannot be applied consistently, enforced fairly, or defended administratively.

So just a couple questions for you now, Maria.

Can you implement this policy?

As written in the memo, no, that would be difficult.

I don't have enough staff or resources in general to know everyone.

As many um speakers today highlighted, um, corporate law is complex, and the way companies set up affiliates, um, subsidiaries, branches, how they cooperate with others.

It it becomes very difficult for us to follow that tangled web in a timely manner.

And we do tend to make our investment decisions relatively quickly because companies come on the market um only so many hours of a day, and you kind of have to be quick and ready with your analysis to be able to execute.

I would like to just highlight um, because I think many people misunderstand what types of investments we are buying.

We're not buying stock, so our buying and selling of these investments do not impact the stock price.

We only buy the bonds and we buy them 99% of the time in the secondary market, which means we're not actually sending our money, the city's money to these companies.

Um we are paying the former holder of the bonds the money so that we can take them in our portfolio.

And likewise, when we divest, we don't hand them back to the company itself and demand their money back.

We actually sell them to another investor.

So when we buy and sell these um bonds, they're not actually noticed by the issuing corporation, just as when we issue our own bonds, we issue them to the initial bondholders, and then they trade them on the secondary market.

So um most of these were issued years and years and years ago.

We can only buy five years and in most companies, just like us issue 25, 35-year bonds.

So, you know, these holdings, the money was spent years before they became an issue.

So managing these and monitoring these to see what bonds are actually currently in the political headwinds is very difficult for us.

Um that is the privilege of being an administrative professional.

I focus only on the financial facts.

I don't pay much attention to the qualitative stuff that's for um council as a policy to do.

So would the implementation of this policy prevents you from further investing in corporate bonds?

I think that is where we're heading.

Uh, the more we um set parameters that are difficult to administer, the easiest thing for us would be to close down the corporate bonds um program, keep them if council allows until they mature, but not make any further investments.

And based on your memo, I think in nine 2024 and 2025, 22 million of a 95 million that we earn were from these corporate bonds.

That is correct.

Now the universe of these premium, these bonds that that pay the premium, these highly rated bonds, to council member Ortiz's point.

He was saying that you basically could switch them out.

It it is a small universe of the it is a small universe, it's doable to a certain extent.

There is about 29 um names that we can trade in, 24.

We already hold investments with our policy limits how much in each name we can go, so we would come up to a capacity issue.

Um, you know, if we have 45 million already in one bond, and that we need to invest 10 million, and that's the only name available, we could go five million in that, and then we would put five million in a lower um yielding, probably U.S.

treasury or agency bond.

Right.

So this policy would make it prohibitive for you to move forward.

It also would shrink the universe with this go-around, and I would imagine subsequent issues that pop up in the newspaper would shrink that universe till it's non-existent at some point.

Potentially, I guess I'll just close.

Uh, a policy without definitions, standards, or a way to implement isn't really a policy.

It's a direction to make ad hoc decisions, and that's not how public funds should be managed.

And staff has warned us that a policy like this cannot be applied coherently.

A corporate the corporate bond program that we have is would be untenable and we'd no longer invest in them.

So this is not just a question of values, it's a question of whether we adopt a policy that cannot function, and in doing so, put a significant portion of the city's revenue at risk.

I again in it's been mentioned here a few times.

We're at $56 million budget deficit right now.

Five million dollars annually and potentially 22 of 95 million in one year.

None of us are going to want to make the cuts that that's going to require.

Um so for that reason, I'm gonna offer a substitute motion to go ahead and accept staff's motion.

Okay, so we have a substitute motion on the floor to accept staff's recommendation, and uh next in line is Councilmember Candellas.

Uh thank you.

Um, I I I I just wanted to take a moment to thank all the speakers who came and um you know voiced voice their opinion.

I mean, this is this is a forum that I believe, you know, we we can have uh an open candid discussion and hear from folks, you know, who who may not agree with us and and even the dialogue on the dice today, I I want to thank uh my council colleagues for their leadership and and um in discussing and and and and introducing you know an alternative and having the administration come back to us with an alternative.

And you know, I I think you know, as a as a son of immigrants and and as somebody whose uh family um you know suffers that same um that same fear that a lot in our community are experiencing uh given the actions of the federal administration and you know um you know the things we've seen not just um on social media but in on television and and everywhere else, it's it's scary and it's and it's not it's not something that um you know it's it's not uh a fun time um to not just to be an elected but to be a San Josean because of what we're seeing um on the streets of Minneapolis, LA, um, even here in our in our own backyard.

But um the the question I have for staff is we have a social responsibility component as part of our investment policy.

Uh can you please talk a little bit about that and uh and you know uh I have a follow-up question afterwards.

Um good afternoon, council member.

Yes, we do have social responsibility clausing our investment policy.

We will exercise that clause of one um one like um kind what similar kind of uh uh securities come on to play.

And if they are priced at the same of the same credit quality, we'll evaluate it social response social responsibility, social socially responsible investment scope when we make the final selection.

Great.

So Maria, can you articulate how we can um define certain companies that uh support well-being through safe and environmentally sound practices and fair labor practices, et cetera.

Uh and and we we we can't necessarily implement the policy uh that the language was provided by the administration.

Can you articulate that?

I think the intent of the memo is good, right?

It says let's not invest in these right now.

I think what we would need is a little bit more guidance.

Is it just these three companies, or is it anything if they have um subsidiary affiliates or they partner with something else?

How long is this um ban active?

How do we reenact it?

Do I bring back to council?

Hey, we think it's time to reenact uh or we allow investment in these.

I think we'd like a little bit more meat around it.

Uh technically, question.

And so uh the recommendation was when they mature, do not reinvest or uh you know invest additional funds.

Can you can you um can you uh when uh when do most of those funds mature um for the audience?

I saw it in the memo, it's 2027.

I believe so, correct.

Right.

And so, you know, given that we review this policy every year, correct?

Um what would would it make sense um uh from an administrative perspective to maybe you know find uh uh an area where we can explore the the the fleshing out some of the administrative implementation details that I believe council member casey is asking for while also recognizing that you know this is this is also important for you know for a values conversation because just a few years ago we we uh implemented the no no direct investments in entities that directly engage in exploration, production, refining, and marketing of fossil fuels as part of our social responsibility policy.

So can can how can how you know and I'll look to the administration, how can we um uh you know move forward with a a policy that that doesn't put us in a in a in a bad fiscal position this year when we have to figure out how we solve for that $56 million deficit or next year, but when we have to make the decision on when we actually uh reap the benefits of the maturity of some of our investments to be able to find some middle ground.

And and I I I would you know, I would be um open to suggesting a friendly amendment that would try to um you know uh provide the administration that flexibility while granting you know the spirit of to which I think the the council member uh council member Ortiz and Kameh are are trying to um instill as part of this policy and uh you know I I guess um uh I can we I can think about massaging the language in a little bit, but um just curious about the administration's perspective, Jennifer, on on the implementation or maybe language that we can possibly implement, not necessarily this year, because I mean, even uh I mean the most of the funds have mature next year, and the the the reinvestment or the the alternative pathways are after the maturity.

I think I need a little bit more time to really sit and think through how that would work.

The fossil fuels was easier.

That was a segment of um a certain specific segment and incorporates all companies within that segment.

So what we're dealing with here, depending on how you want to analyze these companies, Amazon is retail.

Um you have one that's high tech, um, two actually that are high tech.

So it's a little difficult to generalize off the top of my head here.

Okay.

Uh I mean, uh I just, you know, uh looking at previous direction as instructed by PISFIZ, uh, the public safety finance and strategic support committee.

Um there was uh a direction to the review to review the investment holdings and certain corporate notes and investments with ties to U.S.

immigration and customs enforcement and provide policy guidance to the administration.

And and I, you know, I saw that I saw the supplemental memorandum on Friday, and and you know, I I appreciate my call council colleagues' uh effort to try to you know figure out a pathway forward.

So I uh yeah, I uh that that's it for now, and I'll wait to hear from the rest of my colleagues before I offer up a friendly amendment.

Thank you.

Okay, thank you.

Councilmember Ortiz.

Yeah, so I just want to be uh very intentional with the direction of this memo.

So now I'll read the direction.

Direct the city manager to implement alternative scenario two, identified in March 20th, 2026 supplemental memorandum by allowing existing investments and alphabet, Amazon, and Microsoft to mature, which means not divest, while prohibiting any new investments in these three in these companies and a lot of community concerns regarding certain business relationships with ICE and to return council with any necessary updates to cities investment policy.

So I've probably, you know, I don't I'm not bragging about this, but I probably have introduced more memos than almost anyone on this city council.

Time and time again, when I hear from staff, all the times it's direct staff to come up with a strategy and they come back with that recommendation.

This is the first time I've ever been told, oh, there's not enough information here, you're not being too specific.

I don't know how more specific I can be with uh by naming the three companies that I'm talking about.

And so uh I just uh it's very frustrating to hear this type of information and you know I don't I don't feel like uh uh the city of San Jose is really going to miss out on five million dollars.

I feel like what happened in Oakland and the county of uh Alameda, we haven't heard any sort of financial impacts from those type of things.

And I'm surprised honestly that the administration didn't reach out to those cities to make sure that they're the facts that they're putting in the memo are founded on actual facts and not uh misinformation.

Um and so you know, this ice may not be a big deal to some people on this dais.

I am hearing from my constituents who are being terrorized every day from ICE.

I take this very personally.

Some people may be okay with the city of San Jose having blood money on their hands.

I'm not all right.

Let me ask can I ask a clarifying question?

I'm gonna ask Maria a clarifying question.

You I heard first you're talking about we're buying specific company bonds.

Is that right?

So the c so the it would be a an alphabet bond, but then you were talking about sectors.

So are we buying sector bonds or are we buying individual bonds?

Uh sorry, I meant the industry sector.

Um fossil fuels, that's an entire sector, so we're not cherry picking within that sector, you know, so that no one can come back to us after and saying, why are you picking one company to punish and not the other one?

Um so sectors are easier than one here in retail, one on the high-tech.

But the but when we actually are investing money, we're investing in the individual company.

Individual companies, correct.

In the bonds held.

And as you pointed out, though, we're not investing in the company directly, we're investing in in a lend in a bond that the lender has is holding over the we're investing in the note that the corporation holds.

We're just not dealing directly with the company when we purchase it.

We purchase it on the secondary market, which is other investors.

Okay, thank you for the clarification.

Back to Councilmember Casey.

So I take exception to Councilmember Zorti's uh allegation that we don't care about ICE, and unless we care about ICE, we're gonna support the memo.

I think pardon my language, that's bullshit.

Um the reality is the three companies you've outlined, there's been no evidence-based evaluation of whether or not these companies are tied to ICE or not.

You've your memo quotes a Forbes article.

So all we're gonna do is every time an article comes out about a company that might be involved in something we don't like, suddenly we're not gonna invest in that company.

That is not the type of standard we should be holding ourselves to.

It should be much more uh difficult for us to decide to do something like this.

Just willy-nilly ad hoc arbitrarily divesting from companies that we don't like because they appeared in a newspaper article.

I mean, that's ridiculous.

It's not divestment.

All right.

No longer invest in a company based on hearsay because you are hearing from the community a company is doing something, and then you read about it in an article when we're going to be able to do that.

All right, let's let's move on to the next comment.

Councilmember Candellas.

Thank you.

I think I guess my question for the administration is uh what kind of further analysis would you need?

And what could you bring back to the council in order for us next year as part of the investment policy to be able to make a more, I guess, informed decision, if you will, uh, based on on the administration's feedback?

Um what I mean, I guess I would say asking more more for more analysis next year.

Uh I mean, how how would you how would you uh how would you help help us come back to be better informed in the next year?

I don't know that there is more analysis I can do than we did, for example, for these um companies in the supplemental memo.

We are not set up to be a portfolio that actively trades securities, meaning we buy and sell when we see arbitrage opportunities in the market.

We are a buy-to-hold um investment portfolio only.

We look at the financials of these companies.

We are very restricted by government code, further restricted by our policy as to what we can invest in based on credit quality.

So for us, it's still it's going to be more.

Do we continue your delegation of authority to me and my staff to invest in corporate notes, or would you prefer that we do not invest in corporate notes?

Because these things will come up.

They have several times over the past history.

Um there's always an opinion about a company or in a company, these are multi-billion dollar multinational companies.

We only invest in the U.S.

domiciled notes only for projects issued here in the United States.

We do not invest in the affiliates around the globe.

Still, um, these large companies tend to end up in trouble for one thing or another if it's not labor issues, it's they sell tools to an investor or someone who buys the tool and uses it for a purpose that it was not intended by the company.

It becomes very difficult for staff to keep track of that.

So from an administrative perspective, I feel it's a little bit more all or nothing.

Either we invest in corporate bonds or we do not.

Got it.

Okay.

Um would you suggest maybe an update to our social responsibility policy to kind of create create those guardrails and that framework to provide as much guidance and and and I guess black and white um uh language uh that would uh that would give the administration you know their their um uh their directives.

I think the social responsibility language and the policy as it stands is as good as we're going to get it.

It is restrictive enough, but also flexible enough.

Um it does not go into details on certain foreign policies, and again, I think that was a conscious decision by counsel back when that was added.

I was not here at the time.

I do not know exactly how those discussions went.

Got it.

Thank you.

Okay, we're turning to Councilmember Mulkey now.

Thank you, Councilmember.

Um I recognize the conviction of all of our speakers who were here today.

Thank you.

I also want to thank Maria uh and your team.

Uh, in a year when we're scrutinizing every program, every position, every procedure to maintain core city services, your work is essential.

So thank you.

But that's our context, right?

And it's unwise to pursue financial choices that knowingly weakens our fiscal resilience and impacts the general fund.

Some have argued that our investments should reflect our community values.

It's worth noting our own adopted policies already make clear what those values are in this arena.

Our core values call on us to demonstrate fiscal responsibility.

Our investment policy puts safety and liquidity first ahead of yield, precisely to safeguard public funds.

And our budget commitments emphasize fiscal sustainability and cost-effective service delivery as guiding principles.

Using our investment portfolio to take positions on international conflicts would substitute symbolic geopolitics for the very fiscal responsibility we say is core value of this organization.

The companies at issue, Microsoft, Amazon, Alphabet employ thousands of San Jose and Bay Area residents and support countless local organizations and events.

In Microsoft's case, roughly $600,000 out of more than $280 billion in 2025 sales were tied to DHS.

About 0.00214% of its revenue, well under 1,000th of 1%.

We would be taking a significant action over a fraction of a fraction of their business.

I wanted to ask, is Jim Shannon in the room?

Jim, so sorry.

We've fired a few at uh Maria on the finance side of the equation, but maybe we can talk a little bit about if you and your team have modeled anything around if the divestment were to occur, what impact that may have on our city budget.

And I know you look at our city budget over a period of years.

Yeah, thank you for the question, Councilmember Jim Shannon, City's budget director.

Um we haven't done any specific modeling on this.

I think the supplemental memo that the finance department put out had talked about you know the impact of the corporate bond program or the corporate note program going away would be a three to five million dollar um range.

That's across all of our city funds.

So you know, we uh the finance department is investing on behalf of all of the various city funds that are out there.

So not only the general fund, but the rate, the ratepayer funds that we have, like all of those are revenues that we reinvest in then provide for services.

Um I think the general fund is is I is the largest single fund, but I think the uh the proportion share there is probably somewhere uh around the 16 percent range of of the proceeds that that come back from that.

Um but as we're going through and and going through the budget bill and process, you know, every every reduction matters.

We are we are arm wrestling right now over various budget proposals um for uh for um you know um even um not very large amounts, but that's going to be an impact.

I mean, as an example, I think one of the reductions last year was the reductions to the senior health and wellness um benefits grant program, which was around $500,000 deduction, which is um you know probably within the range of potential impact of a three to five million dollar overall corporate note reduction proportionally to the general fund, if that gives some context.

So, Jim, um I I would think that this would maybe come through you eventually, but do you have any sense of what kind of funds we're spending with Microsoft as a city today?

That's an on-the-spot question.

My apologies.

Yeah, I don't know if that was did we is there something mentioned there in the Memo Maria?

I thought that was a we did.

Um let me pull it up.

Um Microsoft uh let's see.

We're both on it, right?

Yeah, this is the supplemental I will have Chinese read it because clearly I can't.

I I think we're okay.

I think I think it's okay.

I don't want to be belaboring the search.

Um Thank you, Jim, very much.

I appreciate it.

Uh so I'll just finish with um I I think our choices here today will have little to no impact on today's complex conflicts.

Um, but as we have heard from our trusted advisors today, divestment will have real material consequences to our residents.

It's for these reasons I'm supporting the substitute motion on the floor to support staff's recommendation.

Thank you, Councilmember.

Thank you.

Um Councilmember Kamei, you're next.

Uh thank you so much.

Um I wanted to get a little bit of understanding.

It sounded like it was either you have a corporate bond program or you don't at all.

Is that correct?

Because to me, you know, like I've not been in the business of your having your shoes.

Uh and so, you know, I I thought that perhaps we would allow some time to be able to figure out oh, if you have a a um uh a group of corporate bonds, and these are the ones that uh uh you know we didn't want to invest in, let's say, hypothetically, right, that the package of corporate bonds would be some other corporations as opposed to including these items.

But you're saying that it's either all of it or not, is that the way it's sold to us, that this is the package and as a package it's all or nothing?

I I'm just trying to understand.

No, I think I may have been unclear.

Um it is difficult to administer these as it is.

Um they are not on the market all the time.

So it's not like these 29 names that meet the government code and our um policy requirements, they're not in the market all the time.

Again, because we're not buying them directly from the issuer, we're buying them secondary market.

So if we start putting restrictions so that you know, Microsoft, the parent company that we are holding are not the ones doing atrocities across the globe.

Um, but if that's how we define it, then it's going to be more burdensome on staff to administer and keeping up on foreign policy.

But we're not we're not talking about that.

We're talking about specifically just not we are specifically in our memo, we specifically mention U.S.

immigration and customs enforcement.

And we deferred this is not divestment.

I mean, a lot of people have thrown the word divestment, but this is not.

This was thought to be a thoughtful way where we're able to take a look at uh going in this direction, and then I think Councilmember Casey is correct.

We didn't perhaps that's our fault.

We didn't have the the exact details.

So I I I agree with you there.

But we had asked for that to come back to us to operationalize this direction.

So what I'm asking is okay, so when we're buying these bonds, do they come in as a package of different, you know, and I know that we buy them on the secondary market, I know that we don't have them all the time, but you know, in terms of if there's one that comes up that says Microsoft, well then maybe we don't want to go there, maybe we want to go somewhere else.

So um I just I just am wondering is it is it a package of corporations that we have to go with or what it is because you mentioned that there are 24, is that correct?

Um we have 24 right now.

We have 29 allowed.

So so there are there are others that there are 21 others that we invest in.

So I'm just wondering, you know, if it's not as a package, it's not like all or nothing.

Correct?

Because we're not talking about looking at geopolitical or international or anything like that.

We're looking at specifically ICE.

Now, if things happen to turn around and things don't uh uh you know are in a better direction where our own local residents are not being terrorized, then I could understand saying, okay, well, maybe you know, ICE is doing something better.

I don't know.

But right now, you know, the policy that we uh want to uh set forward is really to look at, you know, they're doing some bad things, and that needs to change.

So the the difficult thing for us um when we ran our holdings, our corporate holdings um last week to compare against what the US government shows as companies having ICE contracts, the only one that showed up was Microsoft.

So the other two must be showing up through some subsidiary, and that's where I'm saying that's where we're going to have a very difficult time as staff.

I have four investment staff.

That's where it becomes very burdensome on staff to really figure out are is this company somehow involved in other areas that we don't know.

I see that's the administrative burden, and and these bonds are in most cases general purpose bonds, so they're not always dedicated.

Um be honest, the fossil fuel companies were easier because they were very much this is for a certain plant or this is for a hydro plant.

Um, but these are in many cases for general purposes, kind of like our general obligation bonds, but a little bit more fluffy.

Um so it becomes very difficult for us to pinpoint what are they being used for.

I see, I see.

Okay.

Sorry, I should have been clearer on that before.

No, no, no.

Because I I I just was wondering, well, it you know, because it at one point it sounded like it was all or nothing, right?

And to me, it seems like well, if you have 21 others to choose from, well, you know, you go over there instead of going over here.

But you're saying that just a selection.

And I think that was one of our intent in terms of looking at how do we operationalize this direction.

And I know that um, you know, you come to us yearly, and so I just I just feel like you know um as things sort of make their way on an annual basis.

This is something that I know that I'll be bringing up.

And I don't know if anyone else will be bringing up, but I think that's something to keep in mind in terms of of uh the effects of ice in our community.

And like Peter, I also feel that um we need to we need to uh do something here.

Thank you.

Thank you.

Um before I turn back to Councilmember Casey, I'm gonna ask a couple of questions and make a couple comments myself.

Um so as I understand it, what you're saying is I mean, we we we get funds throughout the year that we want to invest.

It's not this is not that the money's invested in waiting.

We it this is this is uh there's always a churn and there are always some new investments.

And we it's a matter of timing, right?

Because an issuance comes, we buy it.

It might be the first issuance might be an alphabet or a an Amazon issuance, and if we don't take it when it comes, we have to wait for another issuance to come later potentially, which could be an opportunity lost and some revenue loss.

Is that correct?

Correct.

Okay.

So that that that's important to understand.

It's not that there's that it's not a s like the stock market where you can go out and choose from a portfolio at any moment and invest in one of many choices.

That is correct.

Okay.

Um and then I uh you know, I I know that your original report talked about Microsoft being the only company here.

And this was based on the fact that there was a $600,000 contract at DHS for using Microsoft tools of some kind.

It seems very small to me actually that an agency that large would only be spending that much on a contract with Microsoft.

I suspect our contract with Microsoft is actually bigger for all the things that we use Microsoft for, Microsoft Teams, Microsoft Office, and all the tools we use to communicate as a city.

So you know, this action, we we end up profiting Microsoft more by the contracts that we spend as a city, I believe, than through this secondary market of bonds.

That probably is a fair statement.

I mean, I'm not gonna ask I don't want to put you on the spot.

I guess it's not really a question for you.

In looking at the supplemental memo, we were able to see what we as the city spend on contracts with all the other companies except for Microsoft.

We couldn't see, but anyway, I mean it I some I don't know if uh Khalid's here, but anyway, we I'm sure we're spending uh he's there, it's okay.

I mean I think he is it about three million?

Three million dollars a year that we spend on our Microsoft contract.

And I suspect that the Microsoft contract that DHS has predates the current administration, it will probably continue long beyond the current administration.

So I, you know, I mean, while we you know we certainly have uh all of us I think are in agreement that it's reprehensible the behavior and that we should take every action Kansas City to protect from the abuses of ice, it's not clear to me that this is the vehicle to do that, um, especially given you know that we're already we're gonna continue spending money and and on contracts with these companies unless we also want to take action to rethink who our provider is for our services based on a temporal issue with the current administration.

Um the other and um and and at the same time, we're you know, we're Microsoft's building a large data center in our district, I mean in our community in our city.

Um we have obviously you know companies that are coming in and investing and that we are welcoming into our city to invest in our city that are on this list.

And so I I'm a little uncomfortable that this is the vehicle by which we take action against ICE.

I think that we've done admirable and very strong work and thanks to Councilmember Ortiz and others for leading on um uh on standing up for in the ways that we can as a city against ICE and their abuses and investing and wrap in in our response network, for example, and making sure that we are there to protect people when they're targets.

I you know, we I think this is a that's a separate conversation and a very important one.

But this is I'm a little uncomfortable with this conversation because I don't think it really achieves what it is that we are would like it to achieve.

Um anyway, and I want to thank you, Maria, because you've done a great job today of explaining some complicated finance things that uh that you know prior to today's meeting I didn't fully understand.

So you do a great job of of kind of articulating how it is that we invest the city, what the process is, and it helped me better understand, you know, what why this is comp more complicated than it seems on paper.

So I really appreciate that.

Um now I'm gonna turn to Councilmember Candelas.

Councilmember Casey, do you have any?

No, okay.

Uh you put your hand down.

Uh no.

Uh uh so uh would uh would you be open for a friendly moment to include some kind of analysis to what other municipalities or other cities are are doing with regards to ICE investments or disinvestment, whatever we want to call it, uh, as part of the analysis and direction to the administration next year?

As a friendly amendment.

Well, I guess no, the challenge is because we'll be right back here again having the same conversation.

That's I think we should resolve it here and now.

But I think I think in order for us to adequately gauge that, I think I I'd like to know, you know, for example, what other other cities in in California are doing with regards to their investments and see if they've delineated and or specified or provided more directions to their respective administration and their invest investment officers on on how to thread this important topic given what we're seeing uh nationwide.

So we would accept the staff's memo.

It's your memo with uh yes.

Sure.

Great.

Thank you.

I'd like you to clarify a little bit further what you're asking for.

Um what one more clarity do you need?

Do you have a time frame for the study when you expect that to happen?

What's the sort of the scope of what you're looking for?

How many cities?

This comes back every year.

I'm asking for an analysis on what other cities have done with regards to ICE investments.

I don't know how much how much more clear I can be.

Um I I'll decline the friendly amendment.

Thank you.

Okay, then I cannot support the substitute motion.

Okay, so I think we're I see one more hand up.

Let's maybe we can wrap it up after uh Councilmember Ortiz, or at least take a vote on the subject.

No, I just want to thank my colleagues.

Um, regardless of you know the side of the discussion you're on, appreciate everybody's input.

And even though this may have not gone my way, I will continue to advocate for my community and do everything I can to protect my residents from ice.

Thank you.

Okay, so we have a substitute motion, which at this point is to accept the staff recommendation, and um we need six votes to do that, so let's um take the vote.

I think okay.

We have the motion fails.

Well, you tell us the vote.

Motion fails three to five with um fully wait, sorry.

I can't read the screen to say it out loud.

Um against I have Kamei Ortiz, Candelas, Tordillos, and Campos.

And fully is reflect yeah, Cohen is reflected as foley because he's sitting in her chair.

So if you're looking at the screen, that's not fully voting, that's Cohen.

Okay.

So we are back to the underlying motion.

And if do we have further comment or suggestions on the underlying motion before we move to vote on the underlying motion?

I see no hands, so let's vote on the underlying motion, which was the uh memo authored by Ortiz and Kamei.

Okay, so that motion fails, and that brings us to uh kind of a stalemate.

I think we are let me let me say it out loud for the people who are visually impaired.

Um the vote is 4-4 with with Cohen Tordill, Mulcahi, and Casey voting against the okay.

So the next step, if we want to reconsider the underlying motion, because we do have some issues with needing to update our provider list for our bonds, and we wanted to try to get that done today.

We would have to have a reconsideration of the original motion or a new motion that's somewhat different than either the other motions.

So I will uh take another.

I see council member Condellas.

Yeah, uh, you know, I'll I'll move staff's recommendation with uh with the analysis component that I uh requested as a friendly amendment.

Second.

Thank you.

Okay, we have a motion in a second, and I just want to clarify just um I took it um council member that you would leave it to our discretion to provide as much or as much information as we felt them deemed necessary to give you that back.

Correct.

Okay.

So now we are on to the third motion, and let's vote on that.

Motion passes unanimously.

The motion carries the eight zero.

Thank you, everybody, and we are done with item 3.3, and I will step aside.

Okay, we're gonna move on with the agenda, moving on to item three point four, which is right.

Yes.

You know, I'm I'm gone for two hours and I forget what happened.

Although I was paying attention.

Um 3.4 grant of franchise to LS Power Grid California.

Do we have a presentation?

No.

No presentation.

Any discussion.

I have public speakers.

I'll just I'll I'll say this.

I I'm really excited about LS Power and the agreement that was made to co-locate LS Power at the Metcalf station with PG ⁇ E.

So working with PGE, LS Power, and Open Space Authority.

It's uh we were able, the city and everyone was able to negotiate LS Power moving in and not negatively affecting the Coyote Valley.

So it was a huge win.

We had a nice press conference there last Friday, and it's just wonderful that this is moving forward.

We know how important we're going, we need uh more, we need more power, and LS Power is going to do that.

So if there's no, I don't see oh, I do see the case.

I need to come out.

I need to call the public speakers.

I'm sorry.

Public speakers.

Yes.

See, I'm gone and I forget what I'm told.

I'm sorry, councilman, and I should have called you council member campos.

I'm so sorry.

Let's start with the public speakers.

Yes, I have three cards for this item.

Dash leads come on down, Mani Bikelli and Casey Carroll.

Totally.

And we do stay with the one-minute timer once we go for a whole meeting.

Hello, my name is Dasha Leeds.

I'm the conservation coordinator for the Sierra Club Loma Prieta chapter in a San Jose resident.

I'll ask me to please defer this vote until adequate environmental review and community noticing is conducted.

The environmental impact report for this project does not analyze the impacts of data centers, even though the massive 200 or 2,000 megawatts of capacity you are building is clearly meant for data centers in the future.

This amounts to sequifragmentation and renders the environmental analysis inadequate.

Alviso carries some of the highest environmental burdens in our region, according to Cal Environ Screen.

These data centers could bring diesel backup, uh diesel backup generators, onsite gas power plants that could make these burdens worse.

Uh Alvisa residents do do they deserve more noise and air pollution?

Currently, right now, they don't have a say.

I spoke with camper canvassers who went out into the Alviso community over the weekend, and when they asked residents about the power lines and data centers, uh most residents had they just didn't know what was coming.

So most residents don't know what's coming because we haven't done thank you, next speaker.

Good afternoon.

My name is Mani Vaca, and I am a high school student from San Jose District 3.

Um and I am part of Silicon Valley Youth Climate Action.

Please do all that is possible to ensure that any data centers powered by these transition transmission lines do not harm the local environment and the climate.

They use as much as possible entirely renewable energy.

They pay for their own increase in energy demand, and they have minimal impacts uh on surrounding communities from and the environment from water use, from noise pollution, um, and from air pollution.

Thank you.

Thank you, next speaker.

Hello.

Um I share concern that the environmental impacts of data centers use of these power lines be fully investigated.

Please ensure that our city's irreplaceable bay lines are prioritized and protected.

I ask also that only renewable energy be used for this project, data center owners be required to pay for their increase in energy demand, and that these developments not cause noise, water, or other forms of pollution.

Thank you.

Thank you, next speaker.

Good afternoon, Council members.

I'm Casey Carroll, Senior Vice President with LS Power Grid California.

I'd like to take a moment today to thank city staff, especially the Department of Public Works, for all the efforts that have brought this franchise before council today.

The franchise, if granted, would mark a significant milestone for nearly two billion dollars in grid reliability projects proposed to serve San Jose and neighboring communities.

As we look to construction, we're committed to continuing the spirit, the same spirit of cooperation with city staff, your offices, and our neighbors.

We thank you for your consideration of the franchise here today.

Thanks.

Back to council.

Thank you.

Councilmember Campos, turn to you.

Thank you, Vice Mayor.

And thank you for being uh at the press conference for this on Friday.

I was not able to attend in my own district, but I appreciate you uh being there and speaking to this issue.

I also appreciate the work that staff in our community has done.

I know that when we are talking about environmentally sensitive locations, whether it's North San Jose, South San Jose, Coyote Valley, I know that these um decisions should not be made lightly.

And so I just want to emphasize that there has been a lot of work to um ensure that we are making sound decisions, and so with that I will um move the um the item forward.

Thank you.

Thank you.

I have a motion and a second.

Councilmember Collin.

Yeah, thank you.

Um, just want to uh thank uh LS Power and PGE and everybody for making this getting us to this point, making this happen.

I really appreciate the the collaboration and partnership between the two two organizations to make sure that we were preserving our open space in uh Coyote Valley.

When this started, we weren't sure how this was going to play out.

And we've we met several of us have been uh we're pushing for that to get worked out and and make sure that we could um we can do what we need to do for our um grid reliability and economic development without affecting our environmental um goals as a city and as a community.

Um just just to briefly mention about um the the commenters and their questions about the environmental impact.

You know, this this is a the this these lines are part of how ISO's plan to make sure that there's a robust grid across the state and make sure that there's not power outages and that there's a rely, there's reliability for our customers.

Um how that power gets used is not was not part of that consideration.

That decision about these lines being located in these locations was made many years before any potential land use decisions are being considered.

Um we have companies throughout North San Jose and residents throughout the our city who have been concerned about the lack of reliability of their power sources, which makes it hard for them to do business and makes it hard for our residents and having the additional capacity on our grid in our area will be beneficial to everyone.

So I really do appreciate this work.

Um I did ask a question last week, and I'm appreciative to hear that that the work that's being done, particularly in Elviso with uh lines that are coming overhead are being done with all care to make sure that they're they have all the technology that is now in we now know about to prevent any injuries to birds with uh the latest of the standards and spacing of lines so that these are that there's an environmentally sensitive installation process.

So thank you to Ellis Power for that.

Great, thank you.

Councilmember Kamei thank you so much.

Um I just wanted to thank everyone involved.

You know, these kinds of projects don't come around very often.

I mean, it's sort of once in a lifetime type of a project where you're really really doing something great for the infrastructure and for what's to come in the future.

So I just want to say thank you to all of the people who uh uh were involved in this, as well as you know, continuing the collaboration.

I think that the messages out there that we care about uh uh preserving our environment and open space.

So I think that as long as we're able to like come together and collaborate, I think that'll be a great success.

So I just wanted to say thank you.

Great, thank you.

Seeing no further hands, let's vote.

Did you want to motion passes unanimously?

Okay, moving on to item 3.5 status of open audit report, audit recommendations report.

We have auditor Joe Royce.

Good afternoon, Joe Royce.

I think Jennifer wanted to say something first.

Okay, I'll go first.

Thank you.

Mr.

City Auditor.

Good afternoon, Mayor and City Council.

The report that is in front of you today that our esteemed city auditor will be presenting to you reflects how we manage performance across the organization, how we hold ourselves accountable for results.

I truly believe that such audits serve as a core management tool.

They identify where we need to improve operations, strengthen controls, and deliver services more effectively, transparently, and equitably.

Overall, the results of this six-month review again show that we had strong and sustained progress in audit implementation.

Over the past decade, in fact, departments have implemented or closed 88 percent of all audit recommendations exceeding the auditors' target.

In the last six months alone, teams closed 57 recommendations, and the city now has 88 open items, the lowest level in more than 10 years.

That trend reflects strong execution, clearer ownership, and better coordination across departments, and is something I monitor and discuss regularly with our department heads.

I want to recognize that progress, particularly the work of the public works department and their animal care and services division.

The department closed all recommendations from its 2024 audit in a short time frame.

They were relentless in doing so.

That level of focus and follow-through reflects the standard we expect across the organization.

At the same time, several areas require continued attention.

These include CECOA and permitting processes within PBCE, operational clarity at interim housing sites, and procurement policy updates within finance.

These items do not present an imminent risk, but they require sustained focus to ensure timely completion.

We will continue to track these items closely and hold departments accountable for delivery.

In closing, this report shows that the organization is improving performance, strengthening accountability, and using audits to drive better outcomes for our residents.

We will continue this work with discipline and urgency.

And with that, I'll turn it over to you, Joe.

Thank you.

Thanks, Jennifer.

So uh Joe Royce, City Auditor.

I'm here with Michelle Millary from our office to present the report on status of open audit recommendations as of December 31st, 2025.

Under the city charter, the city auditors' primary responsibility is to conduct performance audits.

These audits include recommendations to address deficiency, strengthen accountability, and improve the efficiency, effectiveness, and equity of city programs.

Over the past 10 years, uh our office has issued nearly 100 audit reports containing 664 audit recommendations that address many areas of the city's operations.

Our office monitors progress uh in implementing those recommendations and provide regular status updates.

This report shows the progress on 145 auto recommendations.

Uh, and since our last update, 57 auto recommendations were implemented or closed.

As Jennifer noted, we'll be carrying forward 88 open audit recommendations next cycle, which is the fewest that we've seen carried forward in more than a decade.

As noted earlier, the office has made 664 recommendations over the past 10 years, and as Jennifer noted, 88 percent have been implemented or closed, which is above our target of 80 percent.

In addition, 75 percent of recommendations made over the past five years have been implemented or closed.

To illustrate the range of departments' work to implement recommendations from past audits, we want to highlight a few.

Some recommendations are large in scope, affecting multiple departments or having broad program impacts.

Others are smaller and more targeted to a single department or workflow.

Together they demonstrate the variety of recommendations that we have made over the years, as well as the actions departments have taken in response.

As Jennifer noted, animal care and services has implemented has implemented all 39 recommendations from our 2024 audit of animal care and services.

Since our last update, ACS has taken several actions, including completing shelter capacity assessments, updating guidance around daily care of animals, supervisory responsibilities and data entry, adding new performance metrics to its public reporting, beginning to provide limited free spay and neuter services for own pets, and developing a self-service platform of rescue partners, among other improvements.

We believe that these actions, along with the hiring of a new shelter operator in November, will put ACS on a good path to improve services moving forward.

The administration proposed updates to the operating budget and capital improvement program policy or council policy 1-18 to clarify guidelines and cost recovery and revenue sufficiency, considerations of rate pair impacts, and policies around reserves and fund balances.

The City Council accepted the updates or updated policy on March 3rd of this year.

Those closed recommendations from our Audit of Environmental Services from back in 2012 and the audit of development of partner work in progress reserves in 2020.

Public works also updated City Policy 1.81 on the use of city and personal vehicles.

The update requires departments to monitor overall fleet utilization and clarifies guidelines for take-home vehicles, including monitoring for personal use.

Fleet division also developed performance measures to track work order timeliness.

That's from our those closed recommendations from our audit of fleet maintenance operations in 2020 and our audit of take-home vehicles in 2022.

The Housing Department streamlined performance measures and aligned them more consistently across reporting platforms and is in the process of documenting methodologies to ensure consistency over time.

That's from our 2023 Audit of Housing's performance measures.

PRS executed and updated agreements with the remaining school districts served by the San Jose Youth Empowerment Alliance.

The agreements clearly define roles and responsibilities for both city and school staff.

That was from our 2019 audit of the Mayor's Gang Prevention Task Force, which is now the San Jose Youth Empowerment Alliance.

Retirement Services as established purchase orders with its remaining vendors to eliminate the use of non-standard payment methods, which was from our retirement services audit in 2024, and lastly, City Clerk improved its performance management system by updating its performance measures and assigned per uh responsible staff.

They additionally updated its Form 700 procedures to address non-filers and the assessment of late fines.

Those closed recommendations from our 2016 audit of the Office of the City Clerk and the 2019 office or audit of Form 700s.

In 2018, the City Council directed City Manager to identify and prioritize work on 12 outstanding audit recommendations while continue to make progress on all others.

I'll briefly highlight the current 12 priority recommendations.

The three in area of potential budgetary savings include updating time tracking guidelines and reviewing cost recovery calculations for environmental review fees from the 2022 audit environmental review for new developments.

This was implemented this past year.

Renegotiating revenue sharing terms of the integration agreement with Valley Water from the 2016 South Bay Water Recycling Audit.

Clarifying maintenance responsibilities at interim housing sites between service providers and the city.

That's from our 2025 homeless coordination audits.

These last two are both in progress.

The three recommendations in the area of operational efficiency include identifying vacant lands within the city's real estate portfolio and reporting annually on their intended use from our 2021 Audit of Real Estate Services, finalizing publishing guidelines on the city's secret requirements and processes for environmental consultants from that from the 2022 environmental review for new development audit.

Those two recommendations are both in progress.

And the last one here is a contracting with outside service providers for SPAY and neuter services from the ACS audit the Animal Care and Services Audit.

ACS currently has two active purchase orders with SPA and neuter vendors and intends to work with the Finance Department and the City Attorney's Office to use the Municipal Code's unique service provisions to SQ to obtain future services.

Three priority recommendations, the area of improved service delivery include increasing language translations of vital documents and include language translation options and SJ permits.org.

The SJ permits.org website, that's from our 2023 residential building permit audit.

Updating the San Jose Animal Care Center's manual to align with Association of Shelter Veterinarian Guidelines from our 2024 audit over the ACS that I've mentioned before.

ACS adopted the ASV guidelines as a primary manual, and as part of our review for this report, we noted that updated ACS specific policies and the ASV guidelines addressed many of the procedural gaps identified during the audit, and we do encourage ACS to continue reviewing and monitoring its policy and practice to ensure continual alignment moving forward.

Lastly, incorporating all languages spoken by 5 percent or more of the population to the SJ 311 website and mobile application.

Both the translation recommendation related recommendations are both in process.

The three priority recommendations area of citywide security risk mitigation include reassessing procurement policies to align the city's risk strategy with timely procurements for our 2025 audit procurement.

And the last two are from our 2025 audit of fire inventory controls or controlled substances, separating critical duties for management of the central supply of controlled substances from our controlled substances, which is in process, and updating policies to formalize central supply oversight, which has been implemented.

More information on all open audit recommendations is available in the appendices of our report and in our online interactive dashboards, which can be found on our website, which you can see in the slide.

I want to thank all the city departments for their work implementing audit recommendations and for their assistance in compiling the report.

I'd also like to thank my staff for continuously working with departments to document and verify the information included in the report.

With that, happy to answer any questions and ask that you accept our report.

Thank you.

Thank you.

Thank you for the presentation and thank you for meeting with us and briefing us on the open audit items.

Do we have any members of the public who wish to speak?

Yes, Valentina M come on down.

Hello, council members.

My name is Valentina Martinchik, and I'm here to speak about animal shelter data and why the audit report for the shelter should not be accepted as is.

Your recently rated the shoulder's performance highly.

These numbers may reflect reporting changes and data manipulation, but not real improvements.

In 2025, 1600 scats were returned to the field.

It's a 25,000 percent increase since 2021.

Kiddings as young as 30 days are released to the wild.

Found animals are often not accepted into the shelter and remained in public care.

Many are home without being spayed and neutral contributing to the overpopulation.

And this information has now been removed from the public view, making it impossible to track uh outcomes accurately.

Other fields and data have also been recently removed for the limited transparency and oversight.

Thousands of records have been changed, retroactively reduced in reported deaths and inflating life release.

Maddie, come on down.

The auditor stated that all 39 items of the animal care center have been closed.

I am a volunteer at the shelter.

I disagree with this statement.

Specifically, just in this last month, I saw an issue with how staff was doing a dog-to-dog appointment.

I followed up via leadership to ask what the clarification of what process was because it did not align with actual documented procedures we have as volunteers.

After two weeks, I didn't get a response.

It took four follow-ups and magically only got a response today after the email trial was submitted to the document clerk.

I have concerns.

I've seen the alleged documented training.

It is not something someone can follow.

It is pictures, it does not align to the specific situations.

People continue to get hurt at the shelter.

Volunteers have documented process.

I'm sorry, that's your time.

Thank you.

Back to council thank you.

Councilmember Kamei Thank you so much.

Um I want to thank the auditor and his team for always doing a great job this year.

I noticed that there were more uh completed items, and I want to thank the staff for really trying to get through a lot of this.

Uh some of the items that are on the appendix B are um had been delayed and and they're moving forward.

So I know that there's a lot uh on your uh plate right now.

Uh, but you know, much got done this year, so I want to recognize that for all of the staff that are trying to complete uh their deadlines in terms of where they see things going.

Uh so with that I'd like to say thank you, uh both the auditor and to staff and move the item.

Sir Second, okay.

Thank you.

Any other questions?

Joe, I'm gonna ask you the question I always ask you, which is what keeps you up at night in relation to the open audit items or your work in general.

So most of the recommendations, pretty much all our recommendations are around improving the city's system internal controls, which are basically nothing more than the systems we have in place to make sure things are working as intended, or the city's assets are protected.

These are things like procedures which uh define how you know the day-to-day work is done, or supervisory responsibilities, or um, you know, uh systems for procuring and overseeing contracts that you know, contractors who provide services on the city's behalf, or and it a lot of this work is done by staff, not on the necessarily on the front lines, but might be providing support analysts, attorneys, uh, IT staff, HR staff, accountants, auditors, uh, and and I would just say that a lot of this work that I'm talking about is it's not secondary to the way we do business in the city, it's integral to how we do business in the city.

And in the way in the in the face of a large budget deficit, I would just uh I'm concerned that we we see backsliding.

You know, we've spent, you know, it wasn't just this uh we've seen cycle over cycle of the number of open audit reputations declining.

It was just a few years ago we had about 200 open auto recommendations carried over.

Now we're below 100.

Uh my concern really is backsliding and the system of controls weakens uh in the context of uh of a budget, uh a real tough budget season.

Uh we've seen that in the past, that uh the again the the controls get weakened.

And then we see problems down the road that we end up dealing with later.

So that's that's what keeps me up at night right now in the context of what we're talking about today.

Thank you.

I I really appreciate that.

We as council members, we depend on city staff to get the work done.

Many of them are forward-facing, but there's staff analysts behind the scenes who we don't see who are also doing the work and and enabling the work that we do see to get done.

So uh I'm sure that all of the council shares your concern about any uh reduction in workforce because they're really critical to the work to the work that we do, uh also to the the continuity and the history of the work that they've done, that they have some background, they've been with the city in a a while and they remember what happened two, three, four, five years ago.

So I I share your concerns too, and we'll just have to watch the budget as it goes forward and see how that's affected.

Okay, I don't see any any other hand, so let's vote.

Thank you, Joe.

Motion passes unanimously.

Okay.

Next item, item 6.1, San Jose Santa Clara Regional Wastewater Facility Capital Improvement Program Udate.

I understand we have a presentation.

Sometimes you had to click a little clicker up there when it's ready.

There we go.

Good afternoon, Vice Mayor and Council.

My name is Jeff Provenzano, the director of the Environmental Services Department.

The San Jose Santa Clara Regional Wastewater Facility processes roughly 100 million gallons of sewage daily for 1.4 million residents and businesses from seven cities and unincorporated areas, including the cities of Santa Clara, Melpitas, Cupertino, Campbell, Los Catos, Monte Sereno, and of course San Jose.

As one of the largest advanced treatment plants in the Western U.S., it is a critical regional asset because it treats our wastewater, protects public health, prevents pollution in the San Francisco Bay, and supports our local ecosystems.

We're excited to bring this item forward today.

With me is Mariana Chavez Vasquez, the regional man, sorry, the general manager of the regional wastewater facility and Capil Verma, our deputy director of our capital improvement program.

And with that, I'll pass it over to them.

Okay.

Thank you.

We're going to try to make these as fast and easy as we can.

I know that you have had a long day so far.

So we uh just a reminder.

Uh we're coming back today after a study session we had last year, uh January 2025.

We were here just to give you an update of where we were with our capital program.

Uh maybe just a reminder of our capital program, the largest capital program in the city.

Uh we have been working in this in this program for the last 10 years.

So one of the items that that we discussed when we were here in January was uh how much progress we had done to date, uh, and kind of like some of the issues that we have found as we have uh completed some of these projects.

Uh so when we when we came in January, we discussed three main items that that were kind of affecting how we will do the work in the next 10 years.

Uh, one of them was how the scope has uh the evolution of a scope at the plant and also issues with the cost and the escalation and how inflation has been affecting all these.

Uh we will discuss also some changes in regulations that are gonna impact the projects that we have coming forward.

And of course, we are still working on a facility that is started in 1956.

So, aging facility, uh, as Jeff mentioned, the largest facility, one of the largest facilities in the western uh side of the United States, and we are the largest facility in the Bay Area.

Um at that point, we just talk about like the things that we still had to do to complete this study, which we did uh in the last year.

And what we're doing today is basically being you bring you a status update of where we are with the program, what is happening with the kind of like the technical uh projects that we'll have coming forward, some of the programmatic requirements, and how is that looking also for our financing and cost impact uh for the program.

Um just a few things uh just to kind of like set up the stage, and Capillo will walk us through a lot of the of the details of the program.

Uh we have done a lot of work in the last 10 years.

As mentioned, our program started around 2014.

We have completed to date uh 31 projects around the facility uh for a total of 1.2 billion dollars.

Uh we have uh from the regional master plan that put together kind of the uh projects that were gonna be done.

We have completed about 30% of them.

Uh we are uh very proud to say that we are an award-winning program.

We have done a lot of like work and has been recognized by uh our peer agencies and uh professional agencies.

Uh we have also successfully implemented design build at the facility, and what we are highlighting here is four of our largest projects that were completed in the last 10 years.

Uh we also have been focusing on projects either uh because of priority, uh, that they are in in in poor uh shape, the structures were in poor shape, or because uh we wanted to improve resiliency of the facility.

So, what we are highlighting here, for example, uh at the bottom left, you can see the headwork street facility.

That was a priority area for us because of issues with the conditions of the of the system.

And then on top, uh the co-generation facility.

So that was one of the priorities of the first 10 years of the program, uh, so we could improve resiliency at the facility and uh use all the energy that we uh produce because of our treatment process.

So we can say now we can be uh independent from the grid from PGNE.

Uh we have improved the resiliency of the facility, and we self-produce about uh 75% of the energy that we use currently.

So, what we will do, uh Capillo will go through kind of like the different process areas and maybe talk a little bit about the projects that we have completed and the how we're shifting focus to other things and how the next 10 years are looking for Capel Verma, CIP deputy director.

Um, as Mariana mentioned, uh we're talking a little bit about CIP and a snapshot of where we are and what the next 10 years looks like.

What we have here is an overview of the regional wastewater facility.

Um, it's an image that a lot of us have seen uh quite a bit over the last several years and had a chance to actually go out and visit and do some tours.

Um, the real takeaway from this photograph in this image though uh is the identification of multiple unit processes, um, and they're all called out there in text boxes.

And I want to call your attention to the idea that each one of these unit processes is critical to the effective operation of the treatment plant and um the uh operation and treatment happens in a sequential process.

And so I'm gonna go through that sequence over the next few slides.

Um first and foremost, we have preliminary treatment.

Uh, right now, this is one of the easier ones to talk about.

Um Mariana mentioned the headworks project that was completed a couple of years ago.

Uh preliminary treatment is the first step in the treatment process, and it effectively protects all of the downstream infrastructure.

So super critical, it primarily removes all of the inorganic material uh before it gets down further into the waste stream.

Um and in uh our mind reliability here for preliminary treatment has been achieved.

Uh, after completing the headworks project, we have no more preliminary treatment projects scheduled or booked for the next 10 years.

Moving forward with preliminary treatment, which is the downstream of headworks.

This is an area of focus for us in particular over the next 10 years.

We have not done any major work to date.

Just a quick synopsis of what primary treatment consists of.

We effectively have these primary clarifiers, which is the first step in the treatment process to separate the solids from the liquids.

The primary clarifiers represent some of our most aged assets dating back to the 50s and 60s.

And I'm not sure how good the photographs show up on your screen there, but as you can see, a lot of the infrastructure is deteriorated, a lot of concrete spalling, a lot of mechanical and metallic components that need to be replaced or rebuilt.

And this treatment process is super critical, as are all the other ones.

But this one in particular, as I mentioned, a lot of the solids settle to the bottom of the primary primary clarifiers, and those solids feed the digestion process and our biosolids processing.

And I'll talk about that in a few slides.

And again, I'll talk about that in a few minutes.

But we have a heavy investment in our primary clarification system over the next 10 years.

And one of the complications of this in particular is that we don't have a ton of capacity.

There's going to be a lot of complexity in the construction sequencing, potentially having to build out some capacity so that we can sequence and phase out the work over the next years to come.

Okay, secondary treatment.

This is what we characterize as the heart of our treatment process.

This is the biological nutrient removal process, and this is where effectively all the biology occurs.

All the bugs and science here break down our waste, and this is really where a lot of our NPDS compliance permit is achieved.

So needless to say, this infrastructure is super important.

And as you can tell again in the photographs on the right hand side, a lot of deteriorated assets.

One, which is across the whole facility, asset restoration or rehabilitation, a lot of stuff is falling apart and in need of repair.

The other piece of this is, and we've brought this to council previously, the concept of our new watershed permit and our more stringent regulations for nutrients, in particular, total inorganic nitrogen.

That's going to require some process improvements to our aeration system, which we don't currently have.

A couple of a couple of positive notes though.

I would say with confidence that we operate our facility and produce produce a very high quality effluent as it relates to nutrients.

So we don't have as far to go as some of our neighbors to the north.

I'll provide one example.

SFPUC, which is a comparable utility to us.

They have a two billion dollar nutrient program in front of them to upgrade their assets and to further improve their treatment.

Our investment over the next 10 years is about 250 million dollars.

Now that represents just the first phase of our aeration tank restoration.

Okay, uh final step in liquids treatment is our tertiary treatment, and this is primarily our filter complex, our granular media filters, and also our disinfection before we discharge out into the San Francisco Bay.

We have recently completed a filter rehabilitation project which extended the useful life of a majority of the filter complex.

We have a little bit more work to do in a phased approach.

We have another project coming up called additional filter improvements.

The combination of these two projects will yield a facility that won't need replacement.

So what do I mean by that?

We in we're by investing roughly about a hundred million dollars in our filters.

We eliminate the need to build a new filter complex, which was originally envisioned in the plant master plan in 2013.

That project was valued at over 200 million dollars, and so with that strategy in place, we feel like we've really made good use of our funds for capital improvements here.

I also want to say that the filters is where we produce our Title 22 compliant water for South Bay water recycling that goes out into the community.

Moving over to the solids treatment, uh I alluded to it earlier with regards to the primary clarifiers in particular, the solids go to the anaerobic digesters.

The digesters are where the solids get broken down.

Um byproduct of that, which is really beneficial for us is biogas.

And uh Mariana had mentioned that the facility produces uh roughly 75% of our own power on site.

Um that's really substantive, uh, and that's really a very strong thing to note for us.

Um, and it's a big win.

And by completing some of these projects in the biosolids uh treatment scheme, uh, we're effectively enhancing our ability to do that.

Uh, one project that we have immediately in front of us is the additional digestive facility upgrade project.

One component of that project is to receive fats, oils and greases from the community or fog uh into our digesters.

That's a high octane source of fuel that further increases gas production and allows us to produce more power on site.

Uh one project also uh that's completing this year, we're all familiar with the is the digested sludge dewatering facility.

That's gonna allow us to dewater our digested solids uh in a matter of a day and significantly reduce the footprint of what we currently do.

And and sorry to say that the um the additional digester project represents effectively what we consider to be uh one of the final uh biosolids projects for us in the program.

So we talked about biosolids, we talked about gas production, um moving on to power and energy.

Uh you know, it's it's a uh generically one can say that a wastewater treatment facility is the largest power consumer of any community.

Um, and the fact that we produce the majority of our power is again a really strong statement to make uh and again a really big win for us.

Um, and so through our co-generation project, which we delivered a couple of years ago, we're able to do that.

Um, over the last 10 years, we've delivered all of our power and energy projects.

Uh we do have one study that's underway to further optimize during emergency operations how we can operate the facility and bring it back online.

Um, but in effect, uh we feel like we are done with our power energy projects today.

And finally, um we talked a lot about the fund scientific treatment processes and and what those entail.

Uh but the the facility is large in nature, as you know, and there's just a ton of ancillary infrastructure that supports it, large diameter piping, roads, tunnels, uh support buildings.

Uh, those buildings have HVAC units, so on and so forth.

And so we do a lot of projects that are related to the facilities package.

Um, and there's a list of them uh there that we've delivered the last 10 years and a handful that are in front of us.

One major project that we're about to embark on is to upgrade all of the major pumping stations that are in between the unit processes, um, and that's gonna be delivered uh via design build as Mariana previously alluded to.

Yeah, please.

Uh so with that, I mean, Capilla went through like all the projects that we had completed, what we have coming for the next 10 years.

What we wanted to show you here is just a little bit of how the cash flow is looking.

Uh, keep in mind this is cash flow, it's not in conferences.

So this is just kind of like showing how much money we're gonna be spending in the next 10 years.

What you see on the left, kind of like the golden bars is the 1.2 billion we have spent to date.

What we're trying to show is that we have basically a similar amount of work coming our way.

It's gonna be as busy as it was in the last 10 years.

Uh, we are not seeing in the next five years a lot of changes in what we had as part of our adopted five-year budget.

Uh, so there is actually a 16 million reduction on that.

Uh so there is not gonna be a lot of impact to our rates for residents.

Uh, we are still and we wanted to to share that with you.

We are still among the most affordable rates in the Bay Area compared to all the other agencies, at least for the residential side.

Uh, and again, it's just more to show you how much work we plan to deliver in the next 10 years.

Uh, what we have here just on the path forward, um, we're just kind of like repeat the same that we have been saying for the last 10 years, where we focus on rehabilitating the facility.

Uh, we are focused on meeting our permit and maintaining the operational reliability.

Keep in mind that all this work that we do, we do while keeping the facility running 24-7.

And we haven't had a violation of our permit in the whole time we have been doing this, and obviously, we're not planning to have that.

We are gonna be dealing with more stringent regulations, so that is gonna be just a little bit more challenging.

Uh, the work that we that we have coming our way.

Uh we keep managing our funding and financing strategies uh to try to keep the rates the most affordable uh to our uh not only our agency uh residents but all the other tributary agencies that basically is the whole South Bay.

Uh we keep looking at ways to identify potential federal and state funding opportunities.

We mentioned in the past we're gonna keep trying to go towards uh getting that funding.

A lot of agencies are not being very successful with this administration, but we are gonna keep trying regardless.

Uh if we have a change in the financing strategy, we're working with our finance department.

We will come back and inform you before any change happens.

And uh we will basically just keep coming to you for project awards and annual budget approvals.

So this is just a status report, so the only action today is to accept our report.

Uh you will see budgetary actions and and and award actions in the next coming years.

Uh so with that, I think that we conclude our presentation and we're open for questions.

Thank you.

Do we have any public comment?

I have no cards for this item.

Okay, then I'll go to council.

Councilmember Candelas.

Uh thank you, Vice Mayor.

No, uh, I just wanted to give Mariana and Jeff and uh and Kabila a shout out.

Uh this is the second time we see this presentation in less than a week, as I was commenting to count to Councilmember Mulkey, uh, given our role on TPAC, and you know, I I think it's it's really important for us to talk about uh the investments we're making for um, you know, quite frankly, something we don't necessarily hear from from our residents, and that's you know, issues around sewage and issues that are that are critical to run a city.

So uh kudos to you all and and Mariana, I appreciate the um the the mentioning of of getting federal or state dollars to help lessen the impact on on our ratepayers uh because obviously any any uh reprieve we can provide with in the form of uh multimillion dollar capital investments from the federal government is uh is all the better, especially for for our ratepayers given the constant pressures that we we're seeing with rising costs across the board.

Um so uh with that I'll move approval of the uh staff recommendation.

Great.

We have a motion and a second.

Councilmember Kamei.

When we don't hear from our residents, it's a really really good thing.

In the 1980s, when I lived in Morgan Hill, there wasn't enough sewer capacity going down to uh to Gilroy, and it was a tremendous problem because the sewage was coming up into the streets, right?

So you had a public health issue.

Um, and uh and so uh thank you for uh keeping us safe and uh really thinking ahead.

These projects are really very, very forward-thinking, and so I think that um hopefully we will not hear anything uh about that.

And so thank you so much.

I want to thank you for the presentation.

I remember the first presentation I had as a council member on a digester back in 2019, had no idea what that really was, but now I do, and I've toured the facility, and uh I think all is well.

Your your needs are certainly huge, and uh I share the concerns of our council that we don't want to see a big increase from to our residents, and we don't want to have to address the reason for it, and hopefully we can we can all get through it.

But it's yeah, it there's a lot of money that needs to be spent on the capital improvements, and and I acknowledge that.

Seeing no other hands, let's vote.

Motion passes unanimously.

Thank you.

Next item is item 8.1 preliminary actions required for the creation of the East Village Business Improvement District and Levy of Assessments for fiscal year 26-27.

I think we have a brief presentation.

And I'm timing all right.

Uh good afternoon, uh Vice Mayor Foley and Council members.

Jen Baker, director of the Office of Economic Development and Cultural Affairs, and I'm here today with Vic Farley and Jessica Munoz from our small business team.

Uh Jessica and Vic have been the stewards of this project for over the past two years.

Uh, so we thank them for that effort to get us to this point.

And also would like to thank our colleagues in the city attorney's office and the finance department for their work and support throughout this process.

Also importantly, we have consultants from community strong strategies who are under contract to the city supporting the business association in managing the campaign on the ground.

They've been engaging directly with business owners, partners, and have worked closely with stakeholders, including the council members' office.

Today a city council has the opportunity to pass a resolution of intention to establish a business improvement district in District 3, focused on connecting downtown to the East Side.

And I'll pause just a moment that I think it's really incredible to have the opportunity to connect downtown through East Village to Alum Rock Santa Clara Business Improvement District.

So what a tremendous show of faith by community members and leadership to find this opportunity.

And I'd like to hand the presentation over to Vic and Jessica to take you through through the details.

Thank you, Jen, and good afternoon, Vice Mayor and City Council.

The bid, the establishment of a bid must follow California law, which allows for the creation of a special assessment district to raise funds within a specific geographic area.

What is important here is that all the funds raised by businesses within the district are used exclusively for the benefit of the district.

A bid must be renewed annually by City Council, and the business community must adhere to a high standard of transparency and engagement locally, including adoption of the Brown Act, and maintain at all times accurate and complete financial records.

Let me hand over to Jessica.

Thank you.

Thank you, Vic, and thank you, Vice Mayor and City Council.

As you can see on the map, the geography of the bid consists of two parts.

The green zone, which is a commercial core of East Santa Clara Street, extending from 6th Street up to 22nd Street, and the Blue Zone, which includes the residential streets of east of Santa Clara Street, adjacent to San Jose State University.

The reason for the two zones is the differentiation of needs for service with the businesses on East Santa Clara Street requiring the full range of safe, clean and beautification services, and the businesses in the residential streets towards San Jose State University receiving fewer services and paying the a lower assessment.

There are over 356 businesses with the current city tax certificate net of exemptions in a variety of sectors from retail to professional services and employing over 1,100 people, many of whom are local to the area.

There is a culturally diverse mix of Black, Latino, and Asian businesses, and for many business owners, this is their first experience of creating an effective association and engaging positively with the city.

The East Village Business Community supports engagement with downtown, San Jose State University, and the East Side.

If we look at the proposed assessment fee for all the businesses, you can see that the two zones have a flat rate of 250 in the zone one and 125 in zone two.

Assuming a 70% collection rate, the bid is expected to generate 51,031,031 in the for its first fiscal year, and city staff will be discussing with the business association the continued work of the consultants to ensure there is a managed transition into the second half of 2026.

This is the first budget identifying the proposed allocation of funds with 72% focus on clean and safe and the balance divided between marketing, beautification, and administration.

The board will review income and expenditures and annually present the budget and service plan to the city council for approval.

Thank you, Jessica.

Here is the timeline for City Council, taking us from the resolution of intent today, setting out the key milestones required, including an information mailing to businesses, the public meeting for business owners, then the public hearing itself, and the first and second reading of the ordinance.

If the city council approves the resolution of intent today, then assessments could commence in July 2026 at the start of the new fiscal year.

As Jen Baker said, the opportunity today for the City Council is to create a business-led improvement district to unify the local business community, connect downtown to the east side, and provide East Village with a clear sense of purpose and the prospects of a long term resource under the direct control of the business owners.

This bid was discussed at the last update to the small business advisory committee on March 5th, 2026, which endorsed this approach to long-term commercial and economic resiliency.

I'd like to say a personal thank you to two business owners, Chris Patterson Simmons and Kayleigh Barosco, who for many years took on the leadership role to develop the business community along East Santa Clara Street and who pioneered the collaboration that we see here today.

Thank you very much, Vice Mayor.

Great, thank you for that presentation.

Look forward to that bid being completed.

Tony, do we have any members of the public?

Yes, Caleb and Chris Patterson.

Come on down.

Good afternoon.

I'm Chris Patterson Simmons.

Thank you, Jen, Vic, and Jessica.

I am a board member of East Village San Jose Business Association.

I'm here today to express my strong support for the formation of the bid.

Over the past year, our board has worked hard to bring resources to the district and drive meaningful improvements.

We are grateful for the support from the District 3 and the Office of Economic Development.

And with the county in helping activate the corridor, these investments have made a real difference.

We have seen increased engagement, greater visibility, and a growing sense of momentum in our area in our village.

But we will also learn that is one time and limited funding can only go so far.

Without a consistent and reliable funding source, it is difficult to sustain these efforts or build the progress we've made.

This is why our improvement is so important.

The bidding creates a long-term structure.

Thank you.

That's your time.

Next speaker.

Good afternoon, Vice Mayor and Council members.

My name is Kelborosco, and I serve as the board chair of the East Village Business Association.

And I'm also the owner of the Last Round Tavern, located on the corner of 8th and Santa Clara Street.

I'm here today to express my strong support for the East Village Business Improvement District.

Over the past two years, I worked closely with local businesses and community partners, and one thing is clear.

Our businesses are facing real challenges.

Cleanliness, safety, and visibility.

But there's a real momentum.

We're in a unique location here in San Jose State with a diverse group of small businesses that reflect the character of our community.

The bid gives us the tools to build on that momentum through consistent investment and cleaning, marketing, beautification, and events, while also creating a framework for collaboration so businesses can move forward together.

Thank you for your time.

Back to council.

Thank you.

Councilmember Tordillos.

Thank you, Vice Mayor.

I want to start by just thanking City Staff and our partners at Community Strong Strategies for all of the work to get us to this point.

And also a special thank you to Chris and Caleb and all of our business owners in East Village, both for taking the time to come out in comment today, but also for your years of investment in our community in East Village and for your partnership with city staff to again make this bid a reality.

As was said, East Village is the bridge between downtown San Jose and our East Side.

It's a busting bustling community hub that's home to over 350 small businesses and also home to some of our greatest uh assets in District 3, including parks and community centers, uh, recurring community events, beautiful murals and public art, uh, and some of the best restaurants in San Jose, all within easy walking distance to City Hall and San Jose State.

Uh, the establishment of this district will help to empower these small businesses as they continue to serve our residents, uh, create jobs, and make East Village an example of the best of San Jose uh has to offer.

Uh, so with that, I will uh make a motion to approve the staff recommendation.

Thank you.

Councilmember Ortiz.

Just want to congratulate the East Village Business Association for this uh amazing accomplishment, as well as the Office of Economic Development and Community Uh Strong.

Um, it's been uh a pleasure to know Chris Simmons.

I've really enjoyed your leadership, Chris, and thank you for your advocacy.

Congratulations, Mr.

Orozco on your uh uh new position.

Um, you know, I usually don't uh give shout outs to pizza places outside my district, but I gotta say that's a great pizza place.

You've got to try their tavern style pizza, and so want to give him a shout out.

Good good place to go on a Saturday or or Friday night.

But um, I think that this uh bid will be a great connector uh from East San Jose to downtown, especially as we look at uh the hopeful completion of the BART project.

There's a lot of potential in this area, and so just want to congratulate uh the the businesses, our consultant um and the office of economic development.

Thank you.

And council member district three.

Thank you I just like to echo my support of the neighborhood.

When I'm looking for a restaurant, I go that direction.

I don't usually go the other direction.

So I'm excited that this bid uh has a potential of going through and what it can do for the neighborhood.

So thank you for your advocacy for working so hard for it.

With that seeing no other hands, let's vote motion passes unanimously.

Okay, the next item is item 8.2 downtown residential incentive program tax and fee waiver for the gateway tower and bank of Italy developments.

Do we have a presentation?

Okay.

Okay, thank you, Councilmember.

So Eric Sully Bond, Director of Housing.

With me today is Bon Hassan, Deputy Director over production and preservation in the housing department.

I go through a brief presentation today regarding admissions of two projects into the downtown uh program.

Uh, one is new construction, which is Gateway Tower, which will be brought forth before, and the other is a new project, which is the Bank of Illide and its conversion into residential units.

So, briefly touching on our residential housing development feasibility study in December.

Uh, we brought forth that you know, new towers are always a challenge.

This site, as we brought forth to council before with the gateway tower and its new construction required substantial public subsidy in a lining up of investments from both the city, the county, and the housing authority in order to bring a new tower out of the ground, totaling over 70 million dollars.

Uh so it's a significant investment, but it's gonna bring a new tower that is 100% affordable across a good AMI ban, up to about 80% AMI, so it's significant kind of investment in bringing forth new construction in downtown.

Um, in addition, as I had mentioned, the first phase one here overall really gets into and provides of the new program that was adopted on the 27th up to first 7,000 units, where they will receive IHO in LU fees for uh at zero, as well as uh park lunacies of 50 percent reduction than BNS tax fees at 100% waiver for this affordable housing project.

We are focused primarily on just one aspect of the waiver of the fees and incentives, in addition to the exploration as for the high road incentive component of the adopted program.

Now we'll turn it over to Barne to provide some additional details.

Thank you, Eric.

So the Gateway Tower project is being developed by Core Affordable Housing.

It's uh as Eric mentioned, 100% affordable, up to 70% AMI, uh 15-story mixed income uh property, and there's going to be around 220 dwelling units, and the approximate square footage of the ground floor will be 3300.

Um approximate 0.5 acre site.

The construction is expected to start May of 2026.

Um as Eric mentioned, there's uh significant city and county funding as well as a Kalachafe um partnership uh MIP program that the development um obtained as an award.

Uh and through that they also got the tax credit allocations.

This this slide uh just goes over our proposed tax and fee waivers.

Uh as gateway tower is uh has section eight project-based vouchers.

It is exempt uh from the BNS and CRMP construction taxes.

And uh it is also not subject to the inclusion in housing ordinance because of that.

And in order to qualify for the high road uh scenario, they have to be able to meet skilled apprenticeship requirements and prevailing wage requirements.

So the project will plans to implement these uh labor standards that support workforce development and quality construction jobs.

So in in this table, we're seeing the uh the waived uh taxes as well as the no IHO fees requirements, and uh two options, two options on the parking fees, the standard 50% waiver, and then if they're able to implement the high road incentive, um these they can get up to 75% waiver there.

Did you want to take a look at the okay?

And then the next project we're bringing forth is the other side of the downtown program, which is the Office of Residential Conversions.

So this similarly constructed has zero IHO fees attached to it, a 50% park inloo fee reductions, and then a hundred percent waiver of taxes.

And the project that we're bringing forward for admission into your program is the anchor building in our downtown, which is the bank of it being developed by West Bank.

You can see the uh scaffolding already gone up at the site, and they are looking to go into construction for conversion of the site into residential units in April.

Similarly, uh the Bank of Italy conversion projects uh waiver, uh, we can see in this in this slide is they're exempt from the VNS and CRMP construction taxes uh because it is a historic landmark that's subject to historic preservation.

So they won't be charged, they won't be paying any taxes on that side.

And then in terms of the IHO fees, we we see the waiver here, around 2.8 and park uh 50% reduction in the park and inloop fees.

This slide is just a summary uh about the year today uh the applications, the two projects, and we can see here the AMI events as well as the total number of units.

As we mentioned, gateways 220 units, all 100% affordable, um, up to 70% AMI, and then the West Bank uh Bank of Italy conversion is um 109 units that are going to be um produced from that.

And then at the bottom of this slide we can see the AMI ranges.

So the for the gateway tower, the rents, for example, for the 30% AMI will be between a thousand to fifteen hundred.

Is and it ranges from a thousand thirty percent AMI to 3600 at 70 percent AMI.

Um so and the income ranges are for a household of you know four between 42,000 all the way up to 140,000.

So it gives it uh gives us an idea of uh what type of incomes and rent ranges we're going to see.

And then on the conversion side, as the market rents are still at uh affordable levels, around 110% AMI.

Um we can see the rents are around 3300 for one bedroom and 4400 for two bedrooms.

So market rents are still at a low at average uh hundred and 110% AMIs.

And that's our presentation on these two items, and happy to take your questions.

Thank you.

Do we have any public comment?

Yes, Aaron Berger.

Um Vice Mayor and Council, uh, thank you for uh the opportunity here.

My name is Aaron Barger.

I'm with the core affordable housing group.

And just wanted to uh uh be here to say thank you for your support as well as staff support and promoting this uh the gateway tower project.

It's long time coming, and and we're looking forward to break ground here the uh this summer.

So here to answer any questions that you might have, but just wanted to say thank you again and look forward to your support.

Thank you.

Great, thank you.

I'm thank you for building downtown, and I'm glad to see that the incentives are working.

That they incentivized development.

That's wonderful.

Councilmember Tordillos.

Thank you, Vice Mayor.

I want to start by just thanking the housing department for moving so swiftly to bring both Gateway Tower and the Bank of Italy redevelopment uh through the downtown residential incentive process.

Uh you know, the very first memo that our office wrote uh after I joined council was in support of the Gateway Tower project, uh both to support the city's investment in the project and also to establish that tenant preference program uh to support working artists in our community and help to uh both bring online over 200 units of affordable housing, but also help to strengthen reinforce preserve the unique arts culture in the SOFA district.

And then with the Bank of Italy development, you know, this is my personal favorite landmark property downtown.

Uh it's been vacant for a while, has seen better days.

Uh, so excited to see this property uh rehabiture uh rehabilitated and uh brought back to life with this conversion process.

Uh so both of these projects are gonna bring hundreds of units of much needed housing into our downtown core.

And I hope this is really just the tip of the iceberg in terms of the sorts of housing development and density we can see downtown uh with our continued focus on encouraging housing production.

So, with that, I will move staff's recommendation.

Great.

We have a first and a second, seeing no hands.

Let's vote motion passes nine zero with Campos absent.

Okay, wonderful.

Moving on to the next item, which is 8.3 multifamily housing incentive program, residential tax and fee waiver for El Paseous.

Okay.

Thank you, Vice Mayor.

So the next project is our other side of our incentive programs, which is our multifamily housing incentive programs, and this is bringing forth a project to admit the El Paseo Saratoga Tower into the program.

And so this project, again, going back to December 24th, we talked about of 2025.

We talked about the cost of residential development, how these incentive programs are designed to really canalyze more projects into construction.

So, as with the downtown program, both new construction and conversion of office to residential.

Now we're getting some more production going through the multifamily housing incentive program, which we was revised uh back in December 2024, then again in January 2027 to add additional capacity for future developments like this one.

So we're continuing to advance the work around multifamily housing production and building more units in the city today.

So Banu's gonna provide some more detail on this project.

Thank you, Eric.

All right, so the El Paseo uh project is being developed by Sand Hill Property Company at 772 unit residential development with two buildings, 12 uh stories structure on one with 398 units, and then a 10-story one with 374 units.

And uh from that will be a production of around 39 restricted affordable units at 110% AMI area median income.

I keep saying AMI, but area median income.

And then the next slide.

Um this is uh the proposed tax and fee waivers uh as uh we mentioned under this program uh under the phase one, the first 3600 units are uh not subject to the well, there's a IHO fee here, but uh the uh this proposal is they're going to be paying the mixed compliance IHO and Lou fee, which is around 13 million, uh, even though there is an IHO waiver that they that they could have taken.

And that fee is going to be put into another project, an affordable 100% affordable project called uh Cathedral of Faith at 2315 Conoa's Garden Avenue.

And then the other side of it is the 50% reduction in the construction taxes, which is as we can see around uh 3.6.7 million here.

This next slide is um just a uh report on the progress of the uh multifamily incentive program uh since its activation.

And we can see the these are the developments that took off in in since it's been activated since December 2024, and the production of 2200 units and out of that to 267 affordable units.

And there's more to come.

Uh newly added there's about seven newly added projects that will be eligible this year, and uh, we look forward to seeing a production of around another 2200 units.

Okay, and that is the multifamily housing incentive program for the mission of this project.

And we're welcome to take your questions.

Public comment.

I see Eric approaching.

So we must have a good afternoon, Vice Mayor Foley, members of the council.

Good afternoon, Vice Mayor Foley, members of the council.

My member, my name is Eric Schaenauer, and I'm speaking on behalf of Sandhill Properties on El Paseo.

Um, with this incentive uh consideration, we'll be able to pull our building permit by May so that the superstructure of the towers can actually start coming out of the ground for 772 units of new housing, but also 30,000 square feet of ground floor retail, uh a park, and a lot of mixed use amenities for the community.

On a more personal note, the Shane Hour company is excited by today's agenda because three projects we represent El Paseo, Gateway Tower, and LS Power with your actions today will all be able to start construction by June, which will mean well over a billion dollars of new construction in our city.

So I thank you for your support.

Back to council.

Wonderful, thank you.

Councilmember Kamei.

Thank you so much.

Uh, this is a project that I know intimately, and uh I know that there's been uh uh sort of uh a lot of of different uh uh uh discussions in terms of of the project itself, but I think that it will provide um the necessary housing but also the affordable housing.

And I think that it's you know, I want to thank um Eric and his team for coming up with a way of being able to have affordable housing and have market rate housing, and this demonstrates that in fact, you know, the incentives.

You know, I was a little bit sort of a doubting Thomas.

I wasn't sure if it was gonna work, but uh the incentive programs have worked, and I'm really glad that we will have jobs out there, we will have uh you know production of housing uh happening uh this year.

So with that, I'd like to uh move the item.

Thank you.

Great.

We have a motion and a second, and and I'll just comment that the affordable housing piece is in on Canoes Gardens in District 9, and that's exciting that that piece was able to come together, the combination between the market rate and the affordable housing, because they've been sitting wanting to build on that site for a long, long time.

So glad that's all coming together.

Seeing no other hands raised, let's vote.

Motion passes unanimously.

Thank you.

It's exciting to see these incentives work and see all these uh units being ready to come out of the ground.

The next two items we're going to hear together, item 8.4 and 8.5.

And then uh we will also have public comment on those two items, and we'll take uh council comments on those two items together, but then we will be voting on those two items separately.

So this is the housing catalyst teamwork status report and then the progress report on the implementation of the general plan housing element.

Thank you, Vice Mayor.

Good afternoon, honorable council members and vice mayor Manira Santhir, Deputy Director for Planning.

Um, joined here by Principal Planner Jared Ferguson and of course our housing director uh Eric Sullivan.

Um so I'll kick us off with this item.

Um so just to start off with some background.

So um I'll share some of the the history behind the work that the housing catalyst team has been doing in preparation for this report over the years and also uh how that feeds into the housing element reporting process.

So the housing catalyst team was established in 2018 to help implement the strategies and policy actions from the city's previous housing crisis work plan.

The team meets every two weeks and includes staff from four departments as identified here.

So we have, of course, PBCE and housing, uh, but we also uh work collaboratively with the Office of Economic Development and Cultural Affairs and the Department of Parks Recreation and Neighborhood Services.

As the city developed the sixth cycle 2023 to 2031 housing element, this team continued to play a pivotal role in developing and implementing the programs and strategies in the updated housing element.

In June of 2023, the city council adopted the housing element and staff proposed the first housing catalyst team work plan.

The work plan represents the high priority housing strategies and policy actions the team has been focused on since and is also working on currently.

It primarily consists of housing element programs, but also includes other related work as directed by the city council to promote housing in the city.

In January of 2024, the state certified our housing element with 130 strategies and a goal of building 60,000 plus units over the seven years of the housing element cycle.

The state monitors progress of how all cities in California are doing against these metrics through submittal of the housing element annual progress report, which is required to be submitted to the state by April 1st.

Since certification in early 2024, staff has provided annual reports on the housing catalyst work plan to the community and economic development committee, followed by a combined item with the housing element update in March to City Council ahead of submitted to the state by this deadline.

The report before you today is the result of a cloud close partnership between housing and PBCE, and I want to recognize the work of several team members that contributed to this effort.

With that introduction and background, I'll turn it over to Director Sullivan to walk us through the key housing programs.

Thank you.

All right, thank you, Minira.

So I'll go through very quickly a couple of quick slides here.

First, beginning with this slide, which is you've seen before.

It's a good framework for how it is we think about the work and strategizing on execution today, as you've seen just in the items before, we brought forth items under the rent subsidized and restricted as well as market rate units.

So we're continuing to move the progress forward with the hopes that we also get in looking backwards on the continuum, more throughput from our shelter system and more prevention work being done across the entire continuum.

But today we're focused more on the production side of the work.

And so part of the, as we saw today earlier, we brought forth incentive programs, ways in which that we can better bring forth to match what is the capital constraints within the marketplace with tools that we can apply as cities government to better incentivize the production of more uh market rate production as well as affordable housing production.

We've seen, as we talked before, in the December cost of residential development study that there continues to be headwinds regarding pricing and competition as well as overall marketplace conditions, therefore continuing to limit sort of the inventory, and what are the ways in which that we can address the limitations around housing production inventory by providing incentives and various tools such as our multifamily housing incentive program and downtown incentive program that is moving the needle forward.

But in addition to that, we've also, as one of our deliverable items under our focus area work is item 3.2, which is looking at ways in which we can better link capital to our use of land.

And so we did a quick analysis as committed in this study, understanding where our entitlements currently land today.

So what you will see in this table is that there are 103 deals somewhere in the processing, creating over 31,000 units and a breakdown of where those units are across the different districts.

Obviously, district three with the inclusion of what was originally sort of promised in the Google redevelopment side has by far the largest, but you'll see some distribution of units throughout most of the council districts.

We then overlay that with the learnings that we had within the cost of residential development and got to the following findings.

First, you will see that of the total amount of 103 applications that have been submitted, 67% of those are for market rate projects, about 30% of those are for affordable projects, which breaks down unit-wise of roughly the same amounts.

About 63% for market rate development projects, 37% for affordable projects.

Then on the slide to on the table to the right, you'll see what is that breakdown of the affordable and market rate projects within the different bill types that we discussed during the December residential costs of residential development.

So towers by far are more market rate, just given how completely infeasible they are in the marketplace.

We brought forth gateway, and I mentioned and emphasized that it took a substantial amount of public subsidy to bring that new construction tower and gateway forward to we also talked about some of the wraps in the podiums.

You'll see the wraps tend to lean more to the market rate side, while more podium projects and those smaller densities, smaller units lean more on the affordable side, and then stacked flats, townhouses, and single families.

So this aligns to where the analysis points were from the December residential cost of development study was.

So then we did the next step.

Where does that line on an infeasibility scale?

Looking at what is the probability of these projects going forward.

So when we looked at overall feasibility, we found that the overwhelming majority of these units and these title projects are not going forward.

So you saw from the previous slide, we had just a lot of towers, a lot of podiums, a lot of wraps that just can't quite get to the capital attraction in order to come out of the ground.

So we have a high amount of projects that are infeasible and a lower amount of projects that are feasible and able to move forward.

Then we apply that analysis to a breakdown of the different housing types.

And you'll find that affordable feasibility.

We have about 4,000 units that are in that sort of target zone that can move forward.

About just about 6600 units that are potentially feasible within the market rate side, and then the breakdown of affordable and market rate projects that are both infeasible.

Again, because of all the challenges that we had discussed going forward.

This is the first set of the analysis we're doing of better understanding how we can better link lands at capital.

We're going to come back at the next round, the next report of the committee with a further deeper dive into this, a better understanding what are some of the restrictions around rent schedules and some of the other challenges to bring this to the next level down to really see how we hone in further some of the work we do around incentive programs to further bring forth more projects, as well as how can we better refine our tools around affordable housing projects in order to get to more production.

And so that is kind of some of the key takeaways that we've got into this analysis is where do we look at and identify those pathways in order to better meet some of our rhino goals.

Now I'll turn it back to the team.

Thanks, Eric.

Jared Ferguson, principal planner with PBCE.

So just to get into some of the main takeaways from our annual report.

Um the report, as always, includes our annual and cumulative progress toward meeting our regional housing needs allocation or arena.

It also reports on housing on individual housing uh element programs and strategies, including the actions underway through our housing catalyst work plan.

And then this year we've included a comparison of arena progress across comparable jurisdictions in the state.

And uh the housing catalyst work plan uh, as mentioned earlier was discussed at the February uh community and economic development committee meeting where the discussion focused focused on how um the incentives and other tools can help move entitlement projects forward into construction.

So this slide shows San Jose's progress over the last calendar year towards meeting our regional housing needs allocation.

The orange bar represents the annual goal for each income category, and then the orange bar on the far right represents the total overall.

These annual targets are based on one eighth of the eight-year cycle for the six-cycle housing element, which runs from 2023 to 2031.

And this next slide shows our cumulative progress uh in the six-cycle housing element, which runs again runs from 2023 all the way through 2031.

The orange bar on the right shows our total arena allocation, 62,200 units, and the bars on the left show the progress by each income category.

The data shown here reflects again from uh 2023 through uh December of 2025.

So, as I mentioned, we've also done some comparison uh on San Jose's progress uh with other large cities, both in the region and across the state in this report.

Um, this chart shows each city's total arena allocation, and the next column shows the percentage through the housing element cycle that each jurisdiction is at since regions start their cycles at different times.

And then the final column shows the cumulative progress for each city towards their total arena goal.

So this data reflects through the calendar year 2024 since jurisdictions uh, as we know to haven't yet submitted their 2025 annual progress reports.

So overall, as you can see, all of the jurisdictions here and in general are behind in their arena goals.

Um, our region is even further behind, even when you account for where we're at in our housing element cycle.

Um, however, San Jose, uh, as you can see has performed better than the other large cities in the barrier thus far.

So getting into some of the uh specific items in our in our report, a big focus of planning's work over the past year to advance the housing element and the housing catalyst work plan has been the general plan four-year review.

Two of the most significant six-cycle housing element work items are part of that effort.

Our small multifamily housing program, which is evaluating allowing four to ten units on sites currently designated for lower density housing throughout the city.

And then we're also completing a comprehensive evaluation of our urban village planning process as a part of that work.

The letter and numbers uh shown on these slides reference the specific housing element program contained in chapter three of the housing element document.

Um then planning for additional capac housing capacity um through the four-year review will help us um prepare for the next housing element, the seventh cycle housing element, which is due in January of 2031.

The general plan task force began meeting uh in October and will continue through June of this year.

So moving into some of the completed items from the past year, um, we completed work uh around allowing SB9 type housing and additional zoning districts and implemented zoning changes for group homes with seven or more persons.

Um these items received final approval in January from City Council, with most of the work being completed during the last calendar year.

In addition, the moderate income housing strategy was presented to the community economic development committee in May.

So moving to some of the other work items, uh, when the state certified our housing element, it identified several programs it would monitor closely each year as part of its review of our progress.

These programs are listed here, and we have completed uh the first two so far on this list around our ministerial approval ordinance and then our housing balance report.

Um, for the next item related to uh additional affordable housing tools in North San Jose.

Uh, we continue to evaluate um the need for these potential tools based upon the findings from our annual cost of development uh study and what strategies may or may not um best help us achieve further housing affordable housing production in North San Jose.

And there continue to be ongoing efforts related to affordable housing production goals in in the Deirdon area.

And then, as I mentioned earlier, uh two items on this list are the significant portions of our work in the general plan four-year review, and we're continuing to move those forward as a part of that process.

And finally, staff anticipates completing the revisions to our planning permit findings later this year, which is the last item on this list.

And I will uh pass it back to Eric.

Thanks, Jared.

And so the next item is just our work around anti-disflation preservation.

So we did release a NOFA.

We're working with uh community development capacity organization on the execution of our land trust work, our soft story program continues to move forward as we brought that to council before.

We continue to expand our work on eviction prevention, as we'll be releasing some additional funding for eviction prevention in the coming weeks, and then continuing to implement our work around tenant preferences as part of our anti-displacement work.

Additionally, just as Jared had mentioned prior on February 26th, we came forth with both the planning commission and HCDC to have a productive conversation about this work and how to move forward.

Good questions were asked.

We talked through the different strategies around both planning side and production of housing units and how we continue uh pure city learning around our work and overall kind of market conditions that are challenging more development.

Some new items that were added to it included our work around the IHO, which were completed on housing day.

We'll be returning to the mobile home ordinance after execution on the community engagement under that direction from council from housing day later this fall, and then the ongoing work, as I mentioned prior around further analysis on leaking land and capital so we can better refine our various tools for financing the production of affordable housing.

And then our next steps here, obviously, we've come before city council on April 1st.

We will look to submit the report to HCD and then continuing to provide updates on the Howard Casalus team work and the PBCE dashboards.

And that is our report for today.

Thank you.

Thank you.

Thank you for that detailed report.

Any members of the public have no cards.

Okay, then moving to council member campos.

Thank you, Vice Mayor.

Um, and thank you, staff, for the presentation and the work to bring this item forward today.

I know that while the housing element includes dozens of programs developed in coordination with many uh members of our community, uh, it is your office PBCE housing staff in particular working on implementing these programs.

Um, and for the other work that helps meet the housing needs of our community.

Again, I thank you.

Um I'll start with just a few questions.

Um the housing element program S12 eviction prevention activities.

This is an essential service to preventing homelessness and keeping people housed serving hundreds of tenants and last lords and landlords last year.

Uh given that this is ongoing and has no specific completion date.

How is the city providing sustainable financial support for these services?

So we provide eviction prevention work through subcontracts with nonprofits who do work in the courts, and a lot of that funding source comes out of our rent stabilization program as there's available dollars there, and that's what I mentioned of additional funds that we're able to invest in that work going forward.

Okay.

Um and so staff has identified programs that are designed to facilitate affordable housing development that have been deferred or are now considered not necessary.

For example, density bonuses under housing element P4, um, that's affordable housing tools for North San Jose, and some geographic affordability uh housing goals like housing element P9, which is the Deer Don affordable housing production goals.

So with these uh you know noticed changes.

Have other programs been augmented or have new programs been added to mitigate or offset these changes.

Um so first on the North San Jose piece, just to clarify a little bit, you know, it so it was sort of a there's kind of a two-part um uh work around that.

First was we applied the overlays in North San Jose.

So we have our mixed income uh housing overlay and then our 100% affordable housing overlay.

Um and so P4 was really meant to sort of augment that work to see how we could continue to produce um you know additional affordable housing to meet you know the higher goal that we have there of 25% of the units.

Um so you know, we're still seeing how those overlays work, and and I think at this time we don't think those additional tools like the density bonus tool um will be um kind of fruitful in in seeing new units there, but we do want to keep evaluating it in terms of of how it's working and if we do need to to look at those other tools.

So we're not saying no, but we just want to understand you know how the market works and and what's happening there before we you know look at those other tools.

Um and then as it pertains to to Deirdon, I mean obviously, you know, there is a changing landscape there, and so I think you know, continuing to evaluate how um we can have an impact there, I think is is important.

Um, you know, there are a number of other programs, you know, that relate to affordable housing, and I think we continue to look at many ways in which we can we can deliver on on units um through across you know Meneer mentioned the 130 programs.

So I I think it's it's always about all of the above and how we can continue to advance our goals because ultimately it's about meeting um arena numbers, right?

Yeah, absolutely.

I know this council is no stranger to conversations around trade-offs.

So um just wanted to highlight uh and make sure that staff is doing the work to uh consider those as changes are being made.

Um I just have two more questions.

Between the general plan for year review and adjusting to new and significant state legislation related to housing.

I my understanding is that PBCE um hasn't had the capacity to carry out the work um the workload that standard uh standardizes or streamlines the permitting the fees and the applications like in housing element P10.

So how or what is the city doing to get back on track and make sure that this program isn't falling behind in the timeline as it relates to the housing element?

Yeah, no, thanks.

I think it's a really important point.

I mean, uh our ability to respond to state laws like SP 79 and others has you know delayed some of the timelines on our housing element programs.

I think the ones that you mentioned, we continue to place a big emphasis on and do want to try to move forward in the next um fiscal year.

Um the development fee framework obviously is an important one that we feel will have a big impact in terms of um housing production.

So I think we're you know, we're we're trying to weigh the um the resources that we have and and within those time constraints, but it has you know impacted our ability to deliver some of these these timelines because of of the added work that's been added later through state law.

And through the vice mayor, if I could add to that.

So typically in years where the housing production is slowed down because of market conditions and the arena, like we're not able to make as much progress on unit delivery and permitting and construction.

I think the focus does switch to that policy work and how can we move the needle on our policy work and our process improvements that allow for that quick turnaround for projects when they are ready, when the market is ready for that construction.

So that is definitely forefront and you know foremost on our minds.

Yes, we have limited capacity, and the state unfunded mandates sometimes have to detract from that.

Uh so they may be slight delays, but they we we continue to make progress on them.

It just might not be at the pace that we anticipated when we started this work.

Thank you both for those responses.

And and my last question is about the soft story program, um, R 13, which is another program that has been experiencing setbacks in this case due to federal cuts that were outside of our control.

So, with a new voluntary pilot taking place this year, will staff be providing updates on participation and whether property owners are taking advantage of the program to the council.

Yes, so we will provide updates once a program formally launches towards the end of April, and then we will provide uh updates on a consistent basis regarding upticks in that program.

The addition to the million dollars that council had allocated, uh Congressman Licardo's able to secure two million in federal funds.

Uh, we're receiving some good news on updates related to the BRIC funds available, which is the federal application funds as FEMA gets back to uh previous operations.

So we'll certainly be providing continuous updates on the implementation of the program.

Okay, thank you.

Those are all my questions, and I appreciate your responses.

Great.

Thank you, Councilmember.

Councilmember Tordillos.

Thank you, Vice Mayor.

I want to start by just thanking housing and planning staff for all of the work that's gotten us to this point.

I know that the housing element is an immense undertaking, uh, to say nothing of all of the follow-up policy work to actually implement these programs and policies.

Uh I think that the city can be proud of the attention and the focus that we've paid towards housing policy in recent years.

And I think just earlier today in this session, we saw three projects moving forward through the city's incentive program.

So some evidence that the things that we are doing are working here.

Uh but want to make sure that we just don't lose focus of how much work remains to be done here, not just to meet our arena out uh targets, but also uh to even match our peer cities.

I thought it was helpful that staff had that comparison of different jurisdictions with their relative performance and kind of place in the cycle.

Uh, but looked into a couple years in particular that I just wanted to highlight.

Uh so in 2025, San Jose managed uh to permit about 34% of our arena goal, uh, and comparing that to San Diego, they hit about 56% of their arena goal.

Uh and then if you look back to 2023 and 2024, San Diego actually averaged about 68% of its arena goal.

Uh so sometimes we hear talk that you know these arena targets are just these unrealistic, impossible to reach you know goals.

And I think that if we look at some of the cities that have had more success in incentivizing housing, we can see that while they're not meeting them, they're getting a lot closer than we are.

Uh and other cities like Sacramento also you know fared better.

Uh so these are cities that are operating, you know, amidst similar macroeconomic conditions.

They're cities that face similar uh you know local and state cost pressures and regulatory environments.

Uh so to me that's hopefully a little bit of optimism that if we continue to focus here, there's more work to still do and more progress to be made.

Uh so I hope that this is just a sobering progress report that we can all keep in mind as we continue to focus on housing policy in the years ahead, uh, both in this budget cycle as we continue to uh implement sixth cycle housing element program commitments and as we uh near the end of the general plan four-year review task force, which is going to have a number of housing related uh recommendations.

Uh so with that, I will move the staff recommendation for item 8.4.

Great, thank you.

Um Councilmember Kamei Thank you, and thank you for all your work um on this.

I know it's very challenging, but we have made some movement, and you know, I think that that uh that certainly means that you know we're at least going in the right direction.

Um I'm I'm a little bit concerned, you know, in terms of how we're tracking and um you know, I think uh to Councilmember Tordillos' point, uh, we got a long way to go.

And I'm already hearing rumblings uh about arena seven, you know, and you know how that's gonna happen and all of that before you know it, it's here.

So um uh I'm just wondering like when you look at San Diego and others who are getting to the 50 percent or you know doing well, like I know they're they're in different markets, but are they doing something that perhaps we can look at or I I don't know, I don't know, but I mean I I just wonder if uh there are other things we've done a lot of things, and this year, you know, uh the projects that came before us just a little bit ago uh prove that yes, you know, we can get something done.

But I'm just wondering uh have have we looked at you know some of the things they're doing to see if we could uh follow suit.

Yeah, no, uh absolutely um to our um local ministerial ordinance that was inspired um by Sacramento.

You know, they had sort of put forward that first, so that was something that we you know added to our housing element based upon their experience.

Um similarly between San Diego and Sacramento, our small multifamily program are similar to programs that they're moving forward.

Um so we're we're trying to you know copy some of their best practices and learn from others, definitely is an important thing that we're we're doing.

Yeah, well, thank you.

Thank you.

I know um we've got a lot of work to still do, but uh I'm glad that we're we are in fact looking at these other places.

So thank you.

Thank you.

Councilmember Casey.

Yeah, uh didn't mean to talk on this, but Sacramento and San Diego are not similar markets.

I think there was a RAND report that came out relatively recently to mention how much less it costs to build in San Diego compared to San Jose.

So I don't think you guys should be on the hook for trying to compete with the lower cost of development.

Um, as someone who's been very critical of the planning department, I wanted to take this opportunity to acknowledge the amount of work you guys are having to do, particularly since 2018 when the whole slate of state level laws uh came down the pike.

So having to anticipate them, digest them, and implement them alongside of having to do your regular duties is a Herculean task.

And so I would like my council members to be aware of this task or these these many tasks that they're gonna have to deal with uh when we go through this budgeting cycle and make sure we get them the fuel and ammunition they need uh to do the work that they need to do.

But I also want to acknowledge that you guys have always been available to me.

Um, Jared, Manera, Chris, and John too for any question I have, your response time and the professionalism is very uh much appreciated.

So I just want to take the time.

Thank you guys.

Appreciate it.

Thank you.

Seeing no other hands raised, let's vote on 8.4.

It's easy to work.

Yeah, that's true.

Motion motion passes unanimously.

Thank you.

Do we have a motion on 8.5?

We have a great a motion and a second, no hands raised.

Let's vote.

Motion passes unanimously.

Okay, great.

So concludes our the regular session of our meeting.

Now we have uh open forum.

Yes, I have two cards, Danielle and Lily.

And I think Jose left.

Yes, so Danielle and Lily come on down.

Is this on?

Yeah.

Council members, thank you for your time.

Families across San Jose have been deeply engaged in San Jose Unified's schools of tomorrow process, yet many feel their voices are not being heard as the district moves toward closing five elementary schools, all Title I schools, forcing young children to travel farther to school across major roads, even across highways like 280 and 101.

For young children, that means navigating more dangerous routes at exactly the age when they are most vulnerable.

And importantly, this is not being driven by necessity.

San Jose Unified has said these closures will not save money, and that they are not actively trying to increase enrollment.

This is a choice, not a requirement.

And it's a choice that puts children at risk.

We appreciate we appreciate this council's leadership on Vision Zero and your commitment to safe streets, and we hope you will advocate just as strongly for the safety of these children who are now being placed at greater risk.

This decision may sit with sorry that's your time next speaker, and also um Lisa, come on down.

Hello, council members.

Uh, my name is Danielle Bouchard, and I'm a parent representing uh the San Jose Unified District Families United.

And I want to be clear about why I'm here today.

I know the city council does not run the school district and has no jurisdiction here.

And but the the streets my child walks to school, these are your responsibility, and the crossing guards or lack of them are also the city council's responsibility.

The housing strategy that brings more families into these neighborhoods.