San Jose splits on downtown parking; SF suspends an oversight commissioner

An ordinance (file 260772) amending the Administrative and Business and Tax Regulations Codes to raise the amount the board delegates to the City Attorney's Office to settle claims and lawsuits for or against the city from no more than $25,000 to no more than $100,000, to require an annual report to the board and to Daniel Lurie (Mayor) on settlements between $25,000 and $100,000, and to raise the delegated authority for settling grievances under labor agreements from $50,000 to $100,000, with city attorney approval. Settlements under the new threshold would no longer need a board vote. It was on its final vote. 00:05:47

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• Final passage of the ordinance, taken same house, same call without objection. Result: passed, 11-0 (same house, same call). 00:06:32

• The clerk read the ordinance as raising the delegated settlement authority from no more than $25,000 to no more than $100,000. 00:05:47

A motion (file 261030), sent as a committee report after the Rules Committee heard it the day before, to suspend Commissioner William Palmer from the Sheriff's Department Oversight Board and approve charges of official misconduct against him under Charter Section 15.105. It directs the clerk to transmit the motion and charges to the Ethics Commission and the city attorney to serve them on the commissioner. The specific charges were not described at the meeting. The board voted twice: first 10-0 with Chyanne Chen (Supervisor, District 11) recorded absent, then, after public comment, it rescinded that vote at her request and voted again, 11-0. 00:24:31

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• Motion to suspend the commissioner and approve charges of official misconduct, on a roll call with Chyanne Chen (Supervisor, District 11) recorded absent. Result: passed, 10-0, one absent. 00:26:07
• Motion by Chyanne Chen (Supervisor, District 11) to rescind the earlier vote on item 43 so she could vote, with a second the transcript appears to give to Connie Chan (Supervisor, District 1). Result: passed, without objection. 02:32:45
• Motion to suspend the commissioner and approve charges of official misconduct, on a second roll call after the rescission. Result: passed, 11-0. 02:33:03

• The clerk read the motion as suspending the commissioner from the oversight board and approving charges of official misconduct under the charter. 00:24:31
• A speaker called the situation unusual and said the action was not taken lightly. 00:25:10
• A speaker said the inspector general's office provided clear evidence of multiple incidents of official misconduct. 00:25:10
• A speaker argued the board has a duty to suspend the commissioner while an ethics investigation proceeds, and urged colleagues to vote yes. 00:25:10
• The chair thanked Stephen Sherrill (Supervisor, District 2) and that office for leading on the matter before calling for the roll. 00:25:58

A resolution (file 261061) proclaiming October 2026 as the first Walktober in San Francisco, celebrating walking and encouraging residents and visitors to explore the city's stairways, trails, parks and public spaces on foot. It was pulled from the group for remarks by its sponsor; cosponsors named were Matt Dorsey (Supervisor, District 6), Jackie Fielder (Supervisor, District 9), Danny Sauter (Supervisor, District 3), Bilal Mahmood (Supervisor, District 5) and Stephen Sherrill (Supervisor, District 2). 02:35:00

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• Adoption of the Walktober resolution, taken same house, same call without objection. Result: passed, 11-0 (same house, same call). 02:38:52

• The chair explained that the resolution declares October 2026 the first annual Walktober, inviting people to explore the city on foot. 02:35:28
• The chair said the city has more than 900 public stairways and more than 150 miles of trails, built up through years of work by neighborhood groups, artists and city staff. 02:35:28
• The chair said the festival is led this year by the SF Crosstown Trail group with SF Stairway Month and Glen Park Beautiful, with more than 30 events through the month hosted with partner organizations. 02:37:42

An informational presentation, with no vote, on a proposed amendment to the 2019 development agreement for the roughly 6.5-acre Flower Mart site on Brannan Street between 5th and 6th streets in Central SoMa (case 2025-008569PRJ, agenda). The project sponsor is Kilroy Realty, with Gensler as designer. City staff said the 2019 approval was mainly office with ground-floor retail and a maximum height of 270, and that the wholesale flower market has already been relocated to a new building that opened in January 2025. The amendment would let the site be built as housing, commercial, institutional or a mix: up to 3,532 homes if entirely residential, or about 2.6 million square feet of commercial space; height limits of up to 600 feet for residential and 300 feet for commercial buildings; above-grade parking with facade screening; a new set of design standards; and a new 15-year term with one possible five-year extension. Staff said an affordable housing land dedication, public art, parks, clean-streets and workforce commitments stay in the agreement. The commissioner who had been chairing recused herself as an employee of Gensler, and Joel Koppel (Commissioner; Vice President, Planning Commission) chaired the item. The project is to return for approvals after environmental review. 00:09:43

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• Informational presentation only; no motion was made and no action was requested. Result: no action. 01:16:59

• A commissioner announced she was recusing herself from the item because she is an employee of Gensler, which is working on the project, and handed the chair to the vice president. 00:10:32
• City staff said the hearing was informational, with no commission action requested, and was meant to introduce the amendment and gather questions and feedback. 00:10:56
• City staff described the site as about 6.5 acres between 5th and 6th streets along Brannan, within the Central SoMa plan area and one of the plan's key sites. 00:11:58
• City staff said the 2019 approval was primarily commercial, with office and ground-floor retail and a maximum building height of 270, and included relocating and preserving the wholesale flower market as a public benefit. 00:11:58
• City staff said the flower market's relocation has happened, with the new market open since January 2025 and vendors operating there. 00:13:02
• City staff said the amended framework could allow up to 3,532 residential units if the site were entirely residential, or about 2.6 million square feet of commercial development, with institutional uses also possible. 00:13:02
• City staff said maximum heights could rise to 600 feet for residential projects only, or 300 feet for commercial development. 00:14:04
• City staff said the proposal would allow above-grade parking, but only with facade screening requirements. 00:14:04
• City staff said this was the first informational hearing on the amendment and that the project would return to the commission for approvals after environmental review is completed. 00:15:08
• A speaker speaking for the Office of Economic and Workforce Development, said the original 2019 agreement had a ten-year term with one five-year extension and the amendment would give the developer a new 15-year term with one possible five-year extension. 00:17:49
• A speaker said the community benefits still include an affordable housing land dedication, now with inclusionary units added if housing is built, and that public art, community space, parks, clean-streets and workforce commitments remain. 00:18:50
• A speaker said the notable change in the benefits is the obligation to retain and rebuild the flower market, since the sponsor has already built the new market. 00:18:50
• A guest presenter speaking for Kilroy Realty, argued that development is not feasible in Central SoMa today given construction costs, city requirements and the real estate market, and that the amendment is meant to create conditions for the project to be built. 00:20:02
• A guest presenter speaking for Gensler, described the design as a flexible framework: towers that can be built as the market allows, above a fixed public realm at ground level. 00:25:19
• A speaker speaking as Gensler's urban designer, said the plan adds new internal streets with a jog designed to reduce cut-through traffic, two connected open spaces and a set of alleys. 00:26:12
• A speaker said each parcel is designed to hold its own parking, placed above the active ground-floor uses. 00:30:39
• A commissioner recalled the Central SoMa plan's adoption and credited David Chiu (City Attorney) with helping form the housing sustainability district in the neighborhood. 00:37:33
• A commissioner voiced support for the revised project, including its mid-block alleys, screened above-ground parking and added housing. 00:38:35
• A speaker gave the project full support, saying too many approved projects in the area have sat idle and this one could get the neighborhood moving. 00:38:53
• Elizabeth Macdonald (Commissioner) raised a concern that the draft design guidelines allow fences around the privately owned public open spaces without a limit on how long they could be up. 00:43:06
• Elizabeth Macdonald (Commissioner) voiced concern about the above-grade parking, calling it a major change, and asked about the lower tier of screening along Brannan Street. 00:45:16
• A guest presenter answered that fencing of the open spaces is not required but is wanted as an option for closing them at night for safety, with the spaces open during the day. 00:46:58
• A speaker added that the conditions for operating any fences will be set out in the development agreement. 00:48:11
• A guest presenter explained the parking screening tiers: in the first the building's architecture continues down over the parking, while the second allows a different treatment for cost reasons but still screens the parking. 00:50:29
• A guest presenter said ground-floor residential is allowed by the design standards and that ground-floor townhomes could work on the site as they have in the Transbay and Rincon Hill area. 00:52:43
• Elizabeth Macdonald (Commissioner) asked what is driving the 600-foot residential height limit and what inclusionary housing the agreement would require if housing is built. 00:54:03
• A guest presenter said the 600-foot limit matches what the project could have reached using the state density bonus program, which the sponsor agreed to waive in exchange for the city changing the height limit. 00:54:53
• A guest presenter said the sponsor agrees to meet citywide inclusionary housing requirements and to do so on-site for the 600-foot projects, giving up the off-site option for those. 00:55:55
• A speaker said an affordable housing parcel will be dedicated to the city whether or not housing is built on the site, and that the final benefits package is still being worked out. 00:56:16
• Lydia So (Commissioner) said the proposed heights are consistent with the city's future vision for that part of South of Market. 00:58:31
• Lydia So (Commissioner) asked that the towers vary in height rather than all match, as one diagram in the packet showed. 00:59:33
• Lydia So (Commissioner) said she preferred the first two parking screening options for the design standards and disliked the third. 01:00:34
• A guest presenter replied that the equal-height drawing is only a diagram and not prescriptive, and that the goal is varied heights. 01:03:02
• A guest presenter said the third screening type would be used only where parking faces loading areas and back alleys with little public view. 01:03:02
• Malea Chavez (Commissioner) asked what engagement with the cultural district community is continuing and what the commitment to it now looks like. 01:05:02
• A speaker said the city is still working with the cultural district and that the earlier, specific public art commitment is being reworked into a more flexible one. 01:06:03
• A speaker said the developer leads community engagement, with the city guiding which stakeholders are reached. 01:06:47
• A guest presenter said the cultural district art commitment from the original agreement carries over into the amendment, with details still being worked out. 01:07:08
• Mike Chen (Commissioner) asked about a provision in the design standards allowing gates and fences at access points to the site's private streets. 01:07:40
• City staff said gates on the streets would not be automatic: they would need the planning director's approval and the sponsor would have to show a safety concern, with the process spelled out in the agreement. 01:08:23
• A guest presenter said the sponsor has bought the land for the affordable housing dedication but has not yet transferred it to the city. 01:09:49
• A speaker clarified that the timing of the land transfer would be at the choice of the Mayor's Office of Housing and Community Development rather than tied to the first construction document. 01:10:32
• Mike Chen (Commissioner) raised concern that one stretch of a new street near 6th Street would have a sidewalk on only one side, and asked for sidewalks on both. 01:11:15
• City staff said the right of way there is too narrow for two sidewalks and that staff vetted the one-sidewalk design with a Public Works accessibility coordinator. 01:11:44
• City staff listed what will come back to the commission: a Planning Code amendment, a map amendment for height, the development agreement and the design standards. 01:13:08
• City staff said there will also be a joint hearing of the Planning and Recreation and Park commissions because the project casts a shadow. 01:13:20
• Mike Chen (Commissioner) said that if developers are given a choice between office and housing, policymakers should consider how to make housing as competitive to build as office. 01:13:38
• Mike Chen (Commissioner) suggested that above-grade parking with screening and design standards could be considered for other projects as a way to cut building costs. 01:15:46

A Planning Code amendment (case 2026-004766PCA, agenda) sponsored by a member of the Board of Supervisors, a supervisor, who presented it. As introduced, it would exempt housing projects on corner lots that use the HCSF program in the Family Zoning Plan area from development impact fees for childcare, transit sustainability and applicable area plans, while keeping inclusionary housing requirements. Planning staff recommended approval with two changes: extend the exemption to all HCSF-eligible parcels, not just corner lots, and add a 2032 sunset date. The commission's vote is a recommendation. After a long debate over the sunset date, it voted 7-0 to recommend approval with the exemption extended to all eligible parcels and without the sunset. Staff said the fees fund infrastructure, transit and childcare but that collections from these parcels have been low; projects using the state density bonus or other ministerial pathways would keep paying the fees in full. 01:16:59

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• Sean McGarry (Commissioner) moved to recommend approval; the commission secretary later described the motion as approval with both staff modifications (extend to all eligible parcels and add a 2032 sunset). Amy Campbell (Commissioner; President, Planning Commission) seconded and then withdrew her second; Elizabeth Macdonald (Commissioner) later seconded. Sean McGarry (Commissioner) withdrew the motion before a vote. Result: withdrawn. 02:25:27
• Lydia So (Commissioner) moved to adopt a recommendation for approval with staff modification one only (extend the fee exemption to all HCSF-eligible parcels) and without the 2032 sunset date; seconded by Amy Campbell (Commissioner; President, Planning Commission). Result: passed, 7-0. 02:25:39

• A supervisor said he introduced the legislation to eliminate non-inclusionary impact fees on corner lots under the Family Zoning Plan in order to cut construction costs. 01:20:21
• A supervisor said the median monthly rent for a one-bedroom apartment now exceeds $4,200. 01:19:20
• A supervisor argued impact fees bring the city little money but can cost developers an extra $27,000 per unit in some cases. 01:20:21
• A supervisor said corner lots account for more than half of the new-unit capacity under the Family Zoning Plan. 01:20:21
• A supervisor said he is also interested in using the legislation to consider a modest increase in the allowable average floor plate size on corner lots. 01:21:31
• A supervisor said he wants to explore similar fee reductions for housing created by adaptive reuse of historic buildings, probably in separate legislation. 01:21:31
• A speaker presenting for planning staff, said the ordinance would waive childcare, transit sustainability and applicable area plan fees in the Family Zoning Plan area while keeping inclusionary requirements. 01:23:26
• A speaker gave a figure for impact fees generated by HCSF-eligible parcels since September 2023, nearly all from childcare and transit fees and roughly $15,000 from area plan fees; the total is garbled in the recording. 01:23:26
• A speaker said studies from the 2025 rezoning found feasibility gaps of $80,000 to more than $400,000 per unit, against total development costs of about $1 million per unit. 01:24:30
• A speaker estimated the fee savings at $6,000 to $7,000 per unit for larger projects and about $530 for smaller ones, calling the relief modest but meaningful for projects on the edge of feasibility. 01:24:30
• A speaker said corner lots are about 10 percent of parcels but hold nearly half the rezoning capacity, and that so far seven HCSF applications have been mid-block and four on corner lots. 01:25:31
• A speaker acknowledged the exemptions reduce revenue for infrastructure, transit and childcare but said collections from these parcels have been low. 01:26:32
• A speaker noted that projects using the state density bonus or other ministerial pathways would still pay the fees in full. 01:26:32
• A speaker gave staff's first recommended change: extend the exemption to all HCSF parcels, since constraints are similar on corner and interior sites. 01:27:37
• A speaker gave staff's second recommended change: a 2032 sunset date so the exemption can be reassessed. 01:27:37
• A speaker backed the proposal as a five-year program that can be reassessed, and moved to approve. 01:30:35
• A commissioner argued against a sunset date, citing interest rates, labor and material costs, and made a second motion to approve with only staff's first recommended change. 01:34:54
• A commissioner withdrew her second of the first motion and seconded the motion without the sunset. 01:35:33
• A speaker answering for planning staff, said the fee rules are complex enough that staff sometimes have to double-check and have had to revise calculations. 01:36:31
• City staff said parcel-by-parcel differences in overlapping rules add complexity and time to reviews the department is trying to speed up. 01:38:06
• A speaker said planning staff will begin including analysis of administrative complexity in staff reports on legislation. 01:38:42
• Mike Chen (Commissioner) supported extending the exemption to all Family Zoning Plan sites, partly to ease the administrative burden. 01:40:32
• Mike Chen (Commissioner) argued the default should be that the fees stay off unless the city acts to restore them, and backed the motion without a sunset. 01:41:35
• Elizabeth Macdonald (Commissioner) described the question as a balance between funding transit, childcare and neighborhood needs and encouraging housing, and said the balance tips toward housing. 01:43:56
• City staff explained that staff proposed the sunset as a regular check-in, as with the inclusionary reductions' three-year review, and that it would not necessarily mean reverting to today's fees. 01:46:13
• Elizabeth Macdonald (Commissioner) seconded the motion to approve with both staff changes, including the sunset. 01:47:08
• Malea Chavez (Commissioner) voiced concern about transportation funding and favored the sunset as a chance to check on the impact and any unintended consequences. 01:49:00
• A commissioner said, speaking as chair, that 2032 is too close given how long development takes, and asked for a broader conversation about impact fees. 01:51:14
• Elizabeth Macdonald (Commissioner) floated a longer sunset, such as ten years, as a possible compromise. 01:52:06
• City staff said the commission can expect a broad discussion of impact fees and other housing cost constraints in early 2027. 01:53:00
• City staff said the housing element has a circuit-breaker trigger in January 2027, when the city looks at whether more strategies or rezoning are needed to meet its housing goals. 01:53:00
• Lydia So (Commissioner) argued a sunset date would undermine the confidence of people deciding whether to invest in building housing in the city. 01:57:33
• Joel Koppel (Commissioner; Vice President, Planning Commission) noted the ordinance has a second supervisor as co-author and asked the sponsor for his view on the two staff changes. 02:00:57
• A supervisor endorsed staff's first change, extending the exemption to all eligible parcels. 02:01:27
• A supervisor said that on the sunset he leaned toward the reasoning of the commissioners who opposed it, and that housing should not be pitted against transit and childcare for money. 02:01:27
• A speaker said he was conflicted: dropping the fees with no end date removes the option to reassess, and the money for transit and childcare would have to come from somewhere. 02:03:51
• Malea Chavez (Commissioner) maintained that a sunset carries little risk and would let the city learn whether removing the fees increases applications. 02:06:30
• Mike Chen (Commissioner) summed up three reasons against a sunset: the city can still act later either way, a sunset adds administrative burden, and dropping it signals the city is open to housing. 02:09:16
• A commissioner said she did not want to return to burdening housing projects with these fees in the near future and that there will be other chances to revisit how transit and childcare are funded. 02:09:53
• Elizabeth Macdonald (Commissioner) came around to supporting approval without a sunset as a gesture of support for the Family Zoning Plan, while saying she still slightly preferred the other approach. 02:24:00
• A speaker withdrew his motion after the commissioner who had seconded it shifted her position. 02:25:27

An interim ordinance, sponsored by Matt Mahan (Mayor), Pamela Campos (Councilmember, District 2), Peter Ortiz (Councilmember, District 5), Bien Doan (Councilmember, District 7) and Domingo Candelas (Councilmember, District 8), that temporarily stops the city from filing, accepting, processing or approving applications to establish, expand or change the use of detention and custodial facilities on private or public property, to the extent state and federal law allow, with certain exemptions. State law requires nine affirmative council votes to pass it (agenda). The item came over from the September 15 meeting. There was no staff presentation. 00:45:57

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• Peter Ortiz (Councilmember, District 5) moved to adopt the interim moratorium ordinance (seconder not identified). Result: passed, unanimous. 00:51:42

• A speaker thanked a member of Congress's office and the coalition of supporters, said he hoped other cities would follow San José's lead, and moved approval. 00:50:55
• The meeting chair said the item passed as it should have and thanked the colleagues who brought it forward. 00:51:48

Staff proposed changing the city's Master Parking Rate Schedule over five years. In year one, garage special-event flat rates would rise to a $13–$35 range (later $15–$35) and garage daily rates would become $1.25 per 15 minutes. Downtown meters would then rise to $3 an hour and later $4. In July 2028, meter hours in the downtown, South First/University and Arena/Diridon districts would extend from ending at 6 p.m. to 9 a.m.–9 p.m. Neighborhood districts (East Santa Clara, Japantown, First and Younger) would go to $3 in 2030. The proposal also widens the discounted downtown employee parking permit and continues 90 minutes of free parking at the Convention Center Garage on non-event days (agenda). Staff said meter rates were last changed in 2014. The adopted 2026-27 budget already counts on an ongoing $1.2 million a year from the parking fund to the general fund. The item had been deferred three times (June 23, August 11 and September 15), first after heavy public opposition in June. Anthony Tordillos (Councilmember, District 3) brought a memo proposing a shorter two-year plan without the longer meter hours or downtown-only meter increases. That memo failed 5-5, a motion for a joint meeting with the Downtown Parking Board failed 5-5, and a reduced version of the memo passed 7-3. It raises garage event and hourly rates, expands the employee permit discount, keeps the Convention Center free-parking pilot, and directs follow-up studies. Meter rates and meter hours were not changed. 00:53:24

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• Anthony Tordillos (Councilmember, District 3) moved approval of his memo: a two-year phase-in of the garage event and daily rate increases, then $3 an hour at meters in all districts; no meter-hour extension and no extra downtown meter increase; plus directions on a long-term parking revenue framework, return-to-source options, and annual data reports to the Downtown Parking Board (seconder not identified). Result: failed, 5-5. No: Peter Ortiz (Councilmember, District 5), Bien Doan (Councilmember, District 7), Domingo Candelas (Councilmember, District 8), Pamela Campos (Councilmember, District 2), George Casey (Councilmember, District 10). 02:32:17
• Pamela Campos (Councilmember, District 2) moved to request a joint meeting of the City Council and the Downtown Parking Board to discuss the item (seconder not identified; a requested amendment adding several memo items was not accepted). Result: failed, 5-5. No: Rosemary Kamei (Councilmember, District 1), David Cohen (Councilmember, District 4), Pam Foley (Councilmember, District 9; Vice Mayor), Anthony Tordillos (Councilmember, District 3), Michael Mulcahy (Councilmember, District 6). 02:38:59
• Anthony Tordillos (Councilmember, District 3) moved items 1a, 1b, 1c and 1f and all of item 2 of his memo: the garage special-event and hourly garage rate increases, the expanded downtown employee discount permit (eligibility up to 50% above minimum wage, tips excluded), continuing the 90-minute free parking pilot at the Convention Center Garage, and the directions to the City Manager's office on future analysis, return-to-source options, and data sharing with the Downtown Parking Board. No meter rate or meter hour changes (seconder not identified). Result: passed, 7-3. No: Peter Ortiz (Councilmember, District 5), Bien Doan (Councilmember, District 7), George Casey (Councilmember, District 10). 02:41:55

• A speaker gave the budget background: the council closed a $50 million ongoing general fund shortfall in the 2026-27 budget. 00:54:10
• A speaker noted the adopted budget includes an ongoing transfer from the parking fund to the general fund, supported by the proposed meter rate and hour changes. 00:55:18
• A speaker acknowledged staff fell short on outreach before the June 23 meeting and were told to do more. 00:56:26
• A speaker said downtown meter rates were last updated in 2014 and most meter operating hours have not changed in more than twenty years. 00:57:37
• A speaker said the city runs about 2,500 on-street metered spaces and that meter revenue has been roughly flat at about $3 million to $3.2 million a year. 00:57:37
• A speaker compared rates: Santana Row charges $3 an hour on the street against San José's current $2. 00:58:41
• A speaker said staff held eight stakeholder meetings between July 17 and September 2, including with the Downtown Association, business districts and the Downtown Parking Board. 01:00:45
• A speaker said the employee permit discount would be open to workers earning up to 50% above minimum wage, up from 30%, with tips no longer counted. 01:01:48
• A speaker laid out the five-year phasing, with downtown meter hours extending from 6 p.m. to 9 p.m. in year three. 01:03:55
• A speaker said the plan keeps the $1.2 million annual general fund transfer and would produce about $5 million in new money for the parking system over five years. 01:03:55
• A speaker listed upcoming capital needs, including adding an elevator at the Second and San Carlos garage, estimated at $11 million to $15 million. 01:05:08
• A speaker said the administration supports the memo from Anthony Tordillos (Councilmember, District 3), with suggested wording on its item 2A. 01:08:23
• Anthony Tordillos (Councilmember, District 3) proposed a two-year plan instead: year one raises garage special-event and daily rates ($1.25 per 15 minutes), and year two sets $3 an hour at meters in all meter districts. 01:28:15
• Anthony Tordillos (Councilmember, District 3) said the memo drops the 6-to-9 p.m. meter extension and the extra downtown-only meter increases, based on feedback from downtown residents, businesses and workers. 01:29:22
• Anthony Tordillos (Councilmember, District 3) said the memo would cover the $1.2 million general fund contribution and still leave about $800,000 a year for the parking fund, and moved approval of the memo. 01:30:24
• A speaker confirmed the memo would replenish the parking fund over several years. 01:32:11
• David Cohen (Councilmember, District 4) said it was frustrating that rates had not risen in years, and suggested the city consider regular CPI-style adjustments. 01:32:20
• David Cohen (Councilmember, District 4) said he had found downtown Oakland and Sacramento parking to cost about twice as much as San José's. 01:33:21
• A speaker said meter data comes from payment transactions, so staff cannot tell exactly how long cars stay or how many spaces are open at a given time. 01:34:45
• A speaker said staff add manual counts and are working on a curb management program that uses cameras to track curb use. 01:35:51
• David Cohen (Councilmember, District 4) suggested staff eventually report the utilization data to the Transportation and Environment committee. 01:36:33
• A speaker said the smart meters are nearing the end of their useful life and staff are looking at replacing them with virtual, pay-by-plate payment, which would need an RFP. 01:37:49
• A speaker told George Casey (Councilmember, District 10) the Downtown Parking Board has three vacancies and five applications on file with the clerk. 01:40:03
• George Casey (Councilmember, District 10) asked whether staff had analyzed the effect on downtown businesses, which he said run on thin margins. 01:40:31
• A speaker said staff had not done a detailed business impact analysis, and suggested the future parking plan could include one. 01:42:08
• George Casey (Councilmember, District 10) said he would not support the memo and wanted more time to avoid harming businesses. 01:42:44
• A speaker said that without the deficit, the general fund transfer probably would not be proposed, but staff would still seek rate increases to pay for capital needs. 01:43:56
• A councilmember said the process began disingenuously, because the revenue was built into the budget without the council fully understanding it. 01:45:02
• A speaker said that under the staff plan, money for extra garage security and cleaning would come in years four and five. 01:46:42
• A speaker said the memo would leave about $800,000 a year in ongoing revenue beyond the general fund transfer, available for maintenance and capital work. 01:47:42
• A speaker said the old garage bonds were refunded years ago and the parking fund now carries no debt obligations. 01:49:42
• A speaker said staff review parking budgets with the Downtown Parking Board three times a year. 01:50:46
• A councilmember asked the city to reconsider requiring parking board members to file Form 700 disclosures, and to present information to the board even when meetings lack a quorum. 01:51:03
• A speaker said the city does not coordinate event pricing with private parking operators but reviews their rates once a year. 01:54:38
• A councilmember asked what new meter technology would cost and whether there is a reserve for it. 01:56:40
• A speaker said there is no cost estimate yet and no reserve for replacing the meters. 01:56:56
• A speaker asked whether staff had studied how longer meter hours affected foot traffic in other cities' downtowns. 01:57:40
• A speaker said staff compared only peer cities' rates and did not do an impact analysis. 01:58:57
• A speaker argued that service workers who now park free after 6 p.m. would in effect pay to go to work, even with a discount. 01:59:59
• A speaker questioned why the budget gap was being closed on downtown in particular, citing the hotel tax as well. 02:01:02
• A speaker said he wished staff had brought information on other cities that made similar changes. 02:03:10
• A councilmember pointed to aging meters and garages, including a garage between Second and Third Streets so old it is not ADA compliant, and urged earlier investment. 02:03:41
• A councilmember urged filling the parking board vacancies quickly. 02:05:42
• A speaker clarified that the memo's two main differences from staff are no 6-to-9 p.m. meter extension and no extra $1 downtown-only meter increase. 02:07:20
• A speaker said that if nothing passed, the parking fund would spend more than it takes in, and the gap would have to be dealt with in the 2027-28 budget. 02:09:07
• A speaker noted other budget trade-offs the council had already made, such as not opening a fire station or the police training center. 02:09:07
• City staff added that the longer action on the fund is delayed, the deeper its structural imbalance becomes. 02:12:34
• The meeting chair said she had heard from event ushers worried about parking costs, supported keeping meter hours ending at 6 p.m., and was unsure about the rest of the memo. 02:13:00
• The meeting chair said she worries about her safety walking through the San Pedro garage at night. 02:14:01
• Pamela Campos (Councilmember, District 2) asked whether the item could go to a joint meeting of the council and the Downtown Parking Board, since the board has been unable to meet for lack of a quorum. 02:15:24
• City staff said a joint meeting is possible but the board would still need a quorum. 02:16:20
• A speaker said four members are seated on the board, so all four must attend for a quorum, and the clerk's office is pressing for the three appointments. 02:16:35
• A speaker said the formal five-year budget forecast is not available until March 1. 02:19:02
• David Cohen (Councilmember, District 4) said the council could approve parts of the memo, since the meter-rate increases in items 1D and 1E seemed to be what concerned members. 02:19:58
• Anthony Tordillos (Councilmember, District 3) preferred his full memo, warning that approving only the event and garage increases would not break even. 02:22:24
• A councilmember called a joint meeting with an advisory board unusual and preferred filling its vacancies so it can advise the council. 02:23:05
• A speaker said the city should not create barriers to coming downtown, while recognizing the budget urgency, and that he liked parts of the memo's phased approach. 02:25:07
• A councilmember asked how much the downtown employee parking discount is used. 02:28:04
• A speaker said fewer than about 70 permits are in use; the program offers garage parking for $50 a month to qualifying workers. 02:28:53
• A councilmember urged better promotion of the employee discount through the downtown and Japantown business associations. 02:29:47
• A speaker said the memo's $800,000 a year would be available for reinvestment starting in the first year. 02:31:15
• George Casey (Councilmember, District 10) backed the joint-meeting motion, calling it unusual but warranted by the circumstances. 02:33:00
• David Cohen (Councilmember, District 4) asked the maker of the joint-meeting motion to add some memo items, including the event rates, the employee permit expansion and the Convention Center free parking. 02:33:35
• A councilmember declined the amendment, saying those items were exactly what the joint meeting should discuss. 02:34:22
• A councilmember confirmed that no action could be taken at the joint meeting; the item would come back to the council afterward. 02:35:53
• Anthony Tordillos (Councilmember, District 3) opposed the joint meeting, noting the parking board had already met twice and made its objections clear. 02:37:08
• The meeting chair opposed the joint meeting, saying it would set a precedent for other advisory boards. 02:37:55
• Anthony Tordillos (Councilmember, District 3) moved the reduced package, acknowledging the parking fund would still lose some money each year under the $1.2 million transfer. 02:39:36
• A councilmember said the dais clearly wants the parking board fully staffed and its appointments expedited, though that was not written into the motion. 02:41:01

An informational study session, with no vote, in which city staff and the city's municipal advisor, Fieldman Rolapp, explained two tools California cities can use to pay for public infrastructure that supports development. The first is the Community Facilities District (CFD, or Mello-Roos district). It levies a new special tax, needs approval from two-thirds of voters or landowners, and can be bonded against fairly quickly. The second is the Enhanced Infrastructure Financing District (EIFD). It adds no new tax and needs no vote to form, but it sets aside future growth in property tax, and staff said it can take five to ten years or more before that growth is large enough to borrow against. The presiding officer, chairing, said he asked for the session in his March message, to learn how the tools could support jobs, housing and downtown revitalization. Staff said the session authorizes nothing. What's at stake for residents: San Jose gets about 13.5% of the 1% property tax collected in its area. Staff said that small share limits what an EIFD would raise. Their made-up example of a $10 billion mixed-use development would support about $138 million in city-only borrowing. Staff also said the council policy that governs CFDs that borrow money, last amended in 1993, is out of date. 00:00:47

More on San Jose's episode

• The presiding officer said he asked for the study session to learn how infrastructure financing tools could help investment in jobs, housing and downtown revitalization 00:00:47
• City staff stressed that the session is only for information and does not authorize forming any district or structure 00:02:45
• City staff went through the history: redevelopment agencies authorized in 1945, the 1982 Mello-Roos Act creating CFDs, redevelopment agencies dissolved in 2012, EIFDs created in 2014, and EIFDs streamlined in 2019 00:04:48
• City staff explained that a CFD creates a new special tax, while an EIFD funds infrastructure from future growth in property tax without raising taxes 00:06:05
• City staff said a CFD needs two-thirds approval from voters or landowners, while an EIFD needs no vote to form but must go through a set series of public hearings 00:07:06
• City staff said a CFD can sometimes be set up in less than a year 00:08:06
• City staff noted that San Jose already has a Convention Center Facilities District, a special tax paid by hotel property owners that goes back into the convention center 00:08:06
• City staff said an EIFD is much slower, because new property value has to build up before it can be borrowed against, which could take five, eight, ten years or more 00:09:07
• A speaker said, speaking for Public Works, that bonds from a CFD can pay for roads, public parking, streetlights, parks, water and sewer, and flood control 00:12:52
• A speaker said CFDs can fund added services but cannot replace services that existed before the district was formed 00:13:55
• City staff gave a made-up CFD example: 65 units on one acre needing about $5 million of streets, water and sewer work, bonded over about 30 years 00:14:07
• City staff said the example works out to about $4,500 of special tax per unit per year, or about $378 per unit per month once debt service is added 00:15:07
• A speaker said Council Policy 1-14, last amended in 1993, sets a $10 million minimum for the council to consider a new CFD that borrows money 00:15:51
• A speaker said the policy also requires 1,000 single-family homes, a density that may not fit the Envision 2040 general plan, and called the policy out of date and in need of an update 00:15:51
• A speaker said the made-up CFD example would not meet the policy's minimums 00:16:54
• City staff explained that agencies taking part in an EIFD commit all or part of their share of new property tax, either to pay costs as they go or to repay bonds 00:17:06
• City staff listed what an EIFD can fund, including highways, roads, water systems, public safety, civic facilities, parks, site preparation and affordable housing 00:18:08
• City staff said, citing the county controller's figures, that the city's share of new property tax is 13.5%, school districts get 44%, the county 18%, and other taxing entities 24% 00:20:11
• City staff said school districts' share can never go into an EIFD, while most other taxing entities can choose whether to commit their share 00:21:14
• City staff said a made-up $10 billion mixed-use development would, once mature, support about $9 million a year in debt payments from the city's share alone, or about $138 million of bonds over 30 years at 5% interest, and called that yield somewhat modest 00:22:16
• City staff mentioned a state transportation infrastructure loan program that could stretch borrowing capacity further, with conditions attached 00:23:16
• City staff said an EIFD needs a separate public financing authority with a lot of administration and reporting, and can pay costs as it goes, repay developers, or issue bonds 00:24:16
• City staff compared San Francisco, a combined city and county with a single school district that captures about 64 of the yield, with San Jose's roughly 13% share spread among dozens of school and special districts 00:26:19
• A guest presenter explained that under state law an EIFD's public financing authority has five members: three elected officials from the participating bodies and two members of the public who live or work in the district 00:30:13
• A guest presenter described the protest hearing: under 25% protest the district goes ahead, between 25% and 50% an election must be held within 90 days, and over 50% stops it 00:32:17
• A guest presenter clarified that private developers can build market-rate housing inside an EIFD, but housing paid for with EIFD increment or bonds must be affordable 00:34:17
• A guest presenter cautioned that committing the city's property tax share to an EIFD requires weighing the effect on the city's future ability to pay for everyday services 00:35:20
• A guest presenter explained that business owners inside a CFD who are neither registered voters there nor landowners cannot vote on forming it 00:37:22
• A guest presenter described the $10 billion example's bonding capacity as $238 million, after the staff slide had said $138 million 00:40:25
• A guest presenter said timing usually points to using CFDs early in a project and EIFDs later 00:40:25
• A guest presenter said developers benefit because the tools let them borrow at tax-exempt interest rates instead of higher construction-loan rates 00:41:26
• A guest presenter described Sacramento's Aggie Square EIFD, formed in 2021 together with a CFD, where a city policy sends 80% of the increment to infrastructure and 20% to affordable housing 00:43:29
• A guest presenter described West Sacramento's EIFD, formed in 2017 over a little more than 4,100 acres in 14 subareas, which issued bonds in 2025 00:45:30
• A guest presenter described the Placentia EIFD from 2019, a city-county partnership, and the Eastern Coachella Valley EIFD from 2023, both of which will take years to produce usable value 00:46:30
• A guest presenter noted that the Eastern Coachella Valley district covers 91,000 mostly undeveloped acres and includes 20% of the county's increment 00:47:32
• A guest presenter described San Francisco's Treasure Island financing district, formed in 2017 on a former naval station with 8,000 homes and 300 acres of parks, as a success 00:48:35
• City staff suggested questions for judging future proposals, starting with whether the investment enables development that would not otherwise happen 00:49:57
• City staff said the city could set up a policy framework or decision tree ahead of time for ranking projects and deciding how much increment to commit 00:51:05
• City staff said Public Works, Transportation, Finance, and to some extent planning and housing staff took part in working-group meetings on the session 00:52:09
• A speaker asked who pays the costs of issuing CFD bonds and of compliance, and whether the city does 00:53:07
• A guest presenter answered that issuance costs come out of bond proceeds and ongoing administration out of the special tax, so the city does not pay, though those costs reduce borrowing capacity 00:54:39
• A speaker asked whether an EIFD built on the city's share alone would be worth the effort 00:55:44
• A guest presenter agreed that 13.5% is not a big share and said generating only $138 million from such a development may not be worth it 00:56:02
• A speaker pointed to Measure T's success and said going directly to voters seems more practical than these tools 00:56:55
• A speaker said she does not think the tools are appropriate right now, noting that affordable housing does not bring in property tax 00:57:55
• A speaker said the city has a lot of aging infrastructure and must start thinking about how to pay for it 00:59:04
• The presiding officer responded that the tools are not only for affordable housing and may be useful at some specific sites in the city even today 00:59:40
• A speaker asked what income-level requirements apply to housing funded by tax increment, citing a state code section that lists housing for very low to moderate incomes as eligible 00:59:54
• A guest presenter offered to follow up afterward with the specific requirements 01:00:42
• A speaker said he is interested in using tax increment to support mixed-income housing while keeping properties on the tax rolls 01:01:35
• A speaker suggested EIFDs could add to funding for the city's existing alternative housing finance efforts 01:02:58
• A speaker pointed to Google's Downtown West, approved after years of negotiation and then stalled when the market turned, and asked how forming a district would fit with land assembly and negotiations with developers 01:02:58
• City staff said each case would be judged on its own, ideally starting once land is already assembled and there is a clear development plan, and that hotel and sales tax gains could also be considered 01:04:33
• A speaker summed up the council's homework as updating the CFD rules and getting the city ready to move quickly on large projects with assembled land, rather than forming a district now 01:05:58
• A speaker asked whether staff had modeled any particular areas of the city 01:06:34
• City staff declined to discuss specific locations, saying it could distort landowners' behavior 01:07:16
• A speaker asked whether the county took part in Sacramento's Aggie Square EIFD, where the city's share was 22.6% 01:07:58
• A guest presenter answered that Aggie Square is a city-only EIFD, in partnership with Wexford and UC Davis 01:08:30
• The presiding officer asked how the CFD and EIFD work together at Aggie Square, as a possible model for combining the two 01:09:24
• A guest presenter explained that CFD bonds can be issued once phase one is built, and the expectation is that tax increment from that phase will cover the debt payments instead of levying the special tax 01:11:01
• The presiding officer asked what made county participation possible in some examples and what shared benefits might encourage it 01:11:50
• A guest presenter said Riverside County joined in Eastern Coachella Valley because a large undeveloped area needs infrastructure it wants built sooner 01:12:11
• A speaker noted that special districts and water districts, not only the county, can be EIFD partners 01:12:53
• The presiding officer asked whether school districts are left out by practice or by law, and the answer given was by law 01:13:15
• A guest presenter warned that agencies with small shares usually need a bigger partner, and that some agencies elsewhere that formed EIFDs without one now feel their hands are tied 01:13:35
• City staff said the memo shows the county-wide distribution and she can share a breakdown of the other taxing entities 01:15:13
• The presiding officer said San Jose's share seems low for the city's size and services, and asked what drives it and whether reform is possible 01:15:31
• City staff pointed to a state bill adopted last year on EIFDs for commercial-to-residential conversions, and said she would need to research whether it changed the share available to cities 01:16:20
• A speaker said there probably has been no state bill in the last decade rebalancing the shares, only fixes for specific projects 01:17:08
• A speaker confirmed that the 13.5% is a share of the 1% property tax, and asked for a concrete San Jose case where an EIFD would beat a CFD 01:17:48
• City staff declined to name a specific site, saying near-term CFD revenue could build momentum toward a broader EIFD 01:18:23
• A speaker asked what measure the city would use in five or ten years to tell whether a tool delivered the promised benefits 01:19:12
• City staff said that by the end of a district's life the added land value and other tax revenue should be greater than the cost of the investment 01:19:52
• A speaker asked how the long wait for revenue fits with developers needing infrastructure money upfront 01:20:27
• City staff acknowledged, in reply to an earlier question, that the staff time and consultants needed for analysis bring near-term costs and extra workload 01:23:12