San Jose City Council Study Session on 2026-2027 Budget: Transportation and Environmental Services - May 7, 2026

This study session, held on the morning of May 7, 2026, was part of the city's 2026–2027 budget deliberations. The council reviewed two City Service Areas (CSAs): Transportation and Aviation Services, and Environmental and Utility Services. No formal votes were taken; discussions focused on current performance, challenges, and proposed budget actions. Key topics included airport passenger decline, traffic safety initiatives (Vision Zero, automated speed enforcement), parking enforcement, infrastructure funding, water and energy utility operations, and the city's partnership with PG&E.

Discussion Items

Transportation and Aviation Services

• John Risto (Director of Transportation) and Mookie Patel (Airport Director) presented an overview. Airport passenger satisfaction remains high, but aging facilities challenge cleanliness scores (target 80%). Asset preservation plans aim to improve. Annual passengers have dropped to a forecast 10 million, with business travel shifting and jet fuel prices doubling. The airport is focusing on real estate development (Coleman Avenue, hangars), advertising revenue ($6.7M annually), and lounge expansions to enhance customer experience.
• Transportation highlights: pavement condition index held at 73-74 (Measure T expiring), bike network completion increasing incrementally, and a $570,000 general fund savings from moving speed camera staffing to citation revenues. The city received a U.S. Forest Service grant for tree planting (staffing and actual planting). A proposal to increase downtown parking meter enforcement and rates was noted.
• Vice Mayor Foley expressed support for boosting airport demand, suggesting a task force with regional employers. Patel noted metrics alone don't support new non-stop routes; engagement with large employers (e.g., South Bay employer with 34,000 employees) is critical. Vice Mayor also highlighted Vision Zero: fatalities are up, and advocated for quick-build projects (e.g., Hillsdale's successful lane reduction, which reduced speeds and crashes and increased multimodal use).
• Regarding automated speed enforcement, Risto reported that a federal grant was not approved, but the city is proceeding with a vendor. Deployment of all 33 cameras is on track for fall 2026 (September). Net proceeds from citations will be reinvested in safety improvements along the same corridors.
• Councilmember Condellas asked about bike lane usage metrics. Risto said counts are done periodically, not annually on every street. Silver Creek Valley Road is challenging due to hills, but connections are important. On parking enforcement, citation revenue is up about 20% overall, with an estimated $13.5 million expected versus $11.6 million last year. The unregistered vehicle program has towed approximately 2,200 vehicles in one year.
• Councilmember Mulcahy pushed for an airport task force and highlighted creative real estate opportunities (hotel site, west side development). He expressed displeasure that the Willow Glen street parking proposal was in the budget without consultation, requesting a return-to-source reinvestment of any new parking revenue into the business district.
• Councilmember Kamei emphasized parking enforcement shortages (only 50 officers vs. 400 in San Francisco) and planted a seed for future increases. She voiced concern about rising airline ticket prices due to jet fuel costs, with Patel forecasting conservative passenger growth until 2028 and noting that the airport carries $1 billion in debt and a $20 per outbound passenger cost.
• Councilmember Ortiz expressed frustration with lack of progress on White Road, Jackson Avenue, and King Road redesigns despite years of discussion. Risto cited funding gaps: King Road needs $15 million, has $8 million, and will compete for regional grants (MTC/VTA). Ortiz noted disparity in infrastructure (concrete roundabouts in District 3 vs. plastic pylons in District 5 under the In Movimiento plan) and criticized slow response to abandoned vehicles, requesting a district-by-district breakdown of towing data.
• Councilmember Tordillos supported Vision Zero and bike lane expansions, backed more parking enforcement, and advocated for return-to-source for paid parking in Japan Town. He also highlighted curb management (SB 1292) and asked about enforcement near no-encampment zones. Risto explained that vehicles can park legally on public streets, limiting enforcement.

Environmental and Utility Services

• Jeff Provenzano (Environmental Services), Lori Mitchell (Energy Director), and John Risto (Transportation) presented. Core services include water delivery, wastewater, stormwater, solid waste, and energy.
• Key dashboards: wastewater discharge below 120 MGD cap; recycled water demand lower due to unseasonably cold summer and early rain; utility asset operational status high (≥90%); sewer overflows at cap (1.9 per 1,000 miles); landfill waste diversion above 60% (state goal 50%). Budget is nearly flat; increases driven by wholesale water rate hikes.
• Proposed budget actions: sewer cost-of-service study, PFAS cleanup at fire stations/training facility, addition of one solid waste enforcement officer, enhanced street sweeping pilot (with DOT), strategic load management position, and energy hedging program review. Major future costs: stormwater permit compliance, nutrient reduction mandates (ammonia discharge limits), and a PCIA increase for San Jose Clean Energy.
• Councilmember Campos praised the enhanced street sweeping pilot as a one-team approach.
• Councilmember Condellas asked about nonprofit cleanup coordination for Thompson Creek; Provenzano noted Valley Water owns much of that creek, and the city can partner with them.
• Councilmember Kamei questioned proposed 7% increase for single-family and 4% for multifamily junk pickup fees and household hazardous waste; Provenzano said increased usage drives costs. Kamei advocated for better education about junk pickup services to reduce corner dumping.
• Councilmember Duan inquired about PFAS remediation at the old fire training center (Google property). Remediation is underway and expected to take a couple more years. He also asked about the EPA Superfund site at Alma and 10th Street (38 years unresolved) and how to reduce waterway contamination – Provenzano cited green stormwater infrastructure requirements for new development.
• Mayor highlighted the PG&E partnership: a June 2025 agreement tracks large projects (≥20 MW) and is being considered to include 5–20 MW projects. Interconnection times are improving for large loads but not yet small residential/commercial. Mayor also discussed energy storage: battery incentives exist (not fully tapped), and a DC fast-charging pilot will begin construction in 2026, operational in 2027, with potential low-income rates. Payback for residential batteries is estimated at 2–6 years.

Key Outcomes

• No formal votes were taken; this was a study session to inform budget decisions.
• Staff committed to providing an information memo to the full council on vehicle concerns (lived-in vehicles, oversized vehicles, abandoned vehicles, registration enforcement) with data broken down by district.
• The automated speed enforcement program is proceeding with a vendor; deployment of 33 cameras is expected in fall 2026.
• The Willow Glen parking proposal remains under discussion, with councilmember requesting a return-to-source revenue model.
• The city is exploring an expansion of the PG&E partnership agreement to include projects 5–20 MW and high-density residential projects.
• A DC fast-charging pilot for electric vehicles is set for operation in 2027, with controlled retail pricing to offer lower rates for low-income customers and during off-peak hours.