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From YouTube: OCT 18, 2022 | 2021-2022 City Manager's Annual Report
Description
City of San José, California
City Council meeting Agenda item 3.3, October 18, 2022
2021-2022 City Manager’s Annual Report.
Recommendation:
(a) Accept the 2021-2022 City Manager’s Annual Report in compliancewith City Charter Section 701(F).(b) Adopt the Appropriation Ordinance and Funding Sources Resolutionamendments in various operating and capital funds to implement the2021-2022 Annual Report recommendations, as detailed in Section IV(Recommended Budget Adjustments and Clean-Up/Rebudget Actions).CEQA: Not a Project, File No. PP17-009, Staff Reports, Assessments,Annual Reports, and Informational Memos that involve no approval ofany City actions, and File No. PP17-004, Government FundingMechanism of Fiscal Activity with no commitment to a specific projectwhich may result in a potentially physical impact on the environment.(City Manager)
Agenda: https://sanjose.legistar.com/View.ashx?M=A&ID=999872&GUID=0C2A2F94-F0B3-416C-86A6-D19437C05528
A
C
D
Thank
you
very
much,,
jennifer.
good
afternoon,
mayor.
members
of
the
city
council.
Again,
my
name
is
jim
shannon,,
the
city's
budget
director.
I'm
joined
up
here
by
barney
wong,,
our
assistant
director
and
ubon
to
our
financial
status
coordinator
and
brice
ball,,
our
operating
budget
coordinator..
So
big
component
of
the
senior
management
team
here
today.
so.
D
The
pivot
is
pretty
technical,
but
it
does
provide
a
very
comprehensive
budget
to
actual
comparison
of
revenues
and
expenditures
in
each
budget
fund
for
the
last
year
and
as
appropriate
explanations
concerning
material
differences
between
those
amounts..
It
also
provides
the
city
council
with
a
comparison
estimate,
actual
ending
fund
balances
for
all
funds,
as
well
as
a
summary
of
the
twenty
one,
twenty
two
year
and
reserves
by
fund.
and
then
based
on
this
analysis
of
prior
year,
performance,
update
information,
the
current
fiscal
year
and
past
direction
from
the
city
council.
D
So,
overall,
revenue
performed
generally
as
expected
and
on
overall
basis
expenditures
ended
the
year
within
or
below
the
budget
that
the
general
fund
had
a
surplus,
along
with
most
other
funds
that
ended
the
year
at
balances
above
or
at
similar
levels..
And
we
look
at
and
we'll
talk
more
about
the
general
fund,
a
little
later..
But
after
rebudget
and
cleanup's,
the
general
fund
fund
balance
was
about
one
point.
D
We're
going
to
as
part
of
our
analysis,
we're
you
know,,
we'll,
be
recommending
various
actions
in
twenty
twenty,
two,
twenty
three
to
close
out
twenty
one.
Twenty
two
adjust
the
current
budget
as
necessary
in
accordance
with
city
council
policy,
one
dash
eighteen
recognize
a
variety
of
grants
and
reimbursements,
and
then
we
do
have
a
few
urgent
needs
in
the
general
fund
and
in
a
few
special
and
capital
funds
that
we
talk
about
a
little
bit
later.
Here..
I
just
want
to
say
a
couple
of
quick
highlights
on
the
big
picture:
economic
conditions.
D
D
D
The
end
of
june,
the
single
family
home
was
one
point,
six
million,
which
was
five
point,
six
percent
above
what
it
was
in
the
prior
that
same
time,
last
year.,
but
sales
certainly
have
fallen
off
over
you
know,
from
the
january
to
june.
Period.
sales
were
down
about
12
percent
from
where
they
were
from
the
prior
year..
So
as
the
fed
raises
the
interest
rates
and
the
corresponding
mortgage
rates,
rise,,
that's
definitely
going
to
have
an
impact
on
the
real
estate
market,
as
will
potentially
any
other
economic
impacts
in
the
valley..
D
So
we'll
definitely
be
keeping
an
eye
on
this
as
we
go
forward.
Looking
specifically
at
some
of
the
revenues
in
the
general
fund,
which
kind
of
shows
our
top
four
here
and
really
as
property
tax
and
sales
tax
goes,
so
goes,
the
general
fund..
Those
were
all
performing
well
in
twenty
one.
Twenty
twenty
two
and
utility
tax
bills
tax
a
little
bit
more
steady
there
and
we'll
talk
about
those
in
just
a
moment..
D
D
D
Which
is
a
really
tricky
one
for
us.,
so
sleep
over
here
is
responsible
for
most
of
the
general
fund
revenue
estimates
that
we
arm
wrestle
over
a
few
of
them
sales
tax.
We
really
went
back
and
forth
on
because
we
got
some
information
in
may
of
twenty
twenty
two
based
on
the
performance
of
january,
february
and
march.,
and
so
we
had
sort
of
20
percent
quarter
over
quarter
growth
over
already
really
heavy
growth
and
so
ok,.
D
Well,
what's
the
fourth
quarter
going
to
look
like
because
we
don't
get
that
data
actually
until
august,
and
so
we
went
back
and
forth,
back
and
forth
and
we
ended
up
being
really
good..
So
we
call
that
within
sixty
thousand
dollars.,
so
that
was
pretty
pretty
impressive
there
on
sales
tax,
we
were
a
little
bit.
We
had
a
little
bit
extra
in
the
various
other
categories
compared
to
the
budget
to
estimate,
but
that
was
good
because
you
might
remember.
Last
year
we
had
a
we
were
here.
D
Last
year
we
had
a
huge
surge
in
sales
tax
growth
that
caught
us
all
by
surprise..
So
this
this
year
we
had
a
little
bit
more
of
a
warning
and
we're
able
to
plan
for
it
as
part
of
our
budget
process.,
a
couple
of
other
things
to
note
here:
a
business
tax.
You
see
a
pretty
big
jump
there
in
business
tax,
that's
mostly
because
of
the
card
rooms
were
fully
operational
in
twenty
one.
Twenty
twenty
two
fees
and
charges
is
the
same
things..
D
We
had
a
lot
of
programs
that
weren't
really
operating
now
in
twenty
one,
twenty
two
they
were
similarly
fines
and
penalties.
We
had
some
parking
citations
was
the
biggest
driver
there
to
actually
end
of
the
year
better
than
we
thought,
which
is
good.,
so
we
had
a
year
end
estimate
of
nine
million.
It
came
in
at
ten
point
five,
and
then
we
had
a
monster
year
for
the
real
property
transfer
tax,
huge,
huge
growth
there..
We
have
that
estimate
for
twenty
to
twenty
three
down
at
sixty
five
million.
D
E
So
after
we
do
all
the
net
required
adjustments
to
close
at
twenty
one.
Twenty
two,
the
ending
fund
balance
variance,
was
thirty,
three
point:
seven
dollars
million,
which
is
one
point.
Six
percent
of
the
modified
budget.
additional
fund
balance
was
primarily
generated
by
stronger
anticipated
revenue
performance
in
several
small
categories,
such
as
fees,
rates
and
charges,
utility
tax,,
carbon
business
tax
and
yachtie.,
and
then
we
also
had
expenditure
savings
and
all
all
of
our
categories,
mainly
in
personal
services,
and
we
had
some
in
non
personal
equipment,
city
wide
and
capital..
So
of
the.
E
Additional
fund
balance
that
was
left
over
this
is
the
proposed
allocation
of
that
fund.
Balance
started
off
with
fifty
one
point:
four
dollars
million
and
then,
after
all,
the
required
adjustments
of
seventeen
point
six
million
dollars.
We
had
fund
balance
of
thirty
three
point:
seven
million
dollars,
that's
recommended
to
be
allocated
by
ninety
million
dollars
for
the
required
technical
rebalancing
actions
and
those
actions
align
already
with
approved
revenue,
estimates
and
expenditure
adjustments
with
the
most
current
tracking
information.
E
E
Four
point:
five
dollars
million
to
two
urgent
fiscal
and
program
needs
which
we'll
discuss
later
on,
which
then
leaves
a
remaining
fund
balance
about
ten
point:
four
million
dollars.
that
remaining
fund
balance
is
being
recommended
to
be
distributed
per
city
council
policy,
one
dash,
eighteen,
so
seven
point
six
dollars
million
to
the
budget,
stabilization
reserve
and
then
two
point:
eight
million
dollars
to
the
sinking
fund,
reserve.
so
of
the.
E
Ninety
million
dollars
that's
allocated
for
required
technical
rebalancing
actions
here
on
the
slide,
is
just
a
list
of
some
of
the
larger
adjustments
that
we're
recommending
five
million
dollars
to
the
contingency
reserve,
which
brings
it
from
forty
one
million
dollars
to
forty
six
million
dollars,
and
this
is
in
accordance
with
council
policy
one
day
eighteen,
which
provides
for
the
maintenance
of
a
minimum
three
percent
contingency
reserve
in
the
general
fund
to
meet
unexpected
circumstances
arising
from
financial
or
public
emergencies.
That
requires
immediate
funding..
E
So
just
want
to
note
that
the
contingency
reserve
adjustment
is
usually
made
as
part
of
the
annual
report,
but
the
five
million
dollars
is
a
relatively
high
adjustment,
and
this
is
mostly
due
to
the
significant
amount
of
funding
that
was
allocated
as
part
of
the
twenty
to
twenty
three
proposed
budget.
Process.
E
E
Station
eight,
twenty
three
thirty
two
and
thirty
six
and
the
nine
on
one
call
center
upgrade
projects
are
tentatively
scheduled
to
be
completed
within
the
next
five
years..
As
of
spring.
The
projects
were
anticipated
to
exceed
the
current
budget
allocation
by
a
total
of
two
to
four
million
dollars
and
anticipated
to
need
an
additional
five
million
dollars
for
f
and
e.
So
that
brings
the
total
cost
overrun
to
about
seven
to
nine
million
dollars.
E
and
with
this
adjustment
of
the
three
point,
eight,
it
helps
bring
that
down
about
that
need
down..
The
next
adjustment
we
have
is
three
point:
seven:
eight
million
dollars
that's
being
transferred
to
the
city
hall
debt
service
fund
to
reflect
a
correction
for
a
twenty
to
twenty
three
allocation
change
and
then
to
also
correct
the
allocation
costs
related
to
the
august
twenty
twenty
lease
revenue
bond
issuance..
Then
we
set.
E
E
Five
dollars
million
for
the
city
hall,
rehabilitation;
projects.;
this
one
repurchases
project;
savings
from
the
city
hall,
campus
expansion
that
must
be
reallocated
for
infrastructure
improvements
at
city,
hall.,
seven
hundred
and
fifty
thousand
dollars
for
the
fire
station.
A
garage
demolition
and
site
cleanup
project..
It
demolishes
an
abandoned
garage
behind
the
fire
station
and
helps
with
the
stabilization
there
in
the
erosion
control.
E
Seven
hundred
thousand
dollars
to
establish
the
police
helicopter
engine
overhaul
reserve,
which
will
support
required
maintenance
of
the
helicopters
engine
and
provide
for
the
installation
of
a
rental
engine
to
ensure
little
to
no
downtime
for
the
air
support
program
and
we
have
net
zero
adjustments
in
business
tax
where
we're
increasing
the
carbon
business
tax
revenues
by
two
million,
but
then
decreasing
the
cannabis
business
tax
by
two
million
dollars.
great
tax
money..
So.
D
All
the
things
that
bonnie
just
went
over
were
required.
We
call
required
technical
rebalancing
actions
things
as
we
sort
of
have
to
do
as
long
as
there's
resources
there
to
do
as
well
as
prior
council
direction..
We
do
have
a
couple
of
items
that
the
city
manager
is
recommending
as
an
urgent
fiscal
program
need
that
would
normally
be
brought
forward
as
part
of
the
proposed
budget
process.,
but
we
think
the
are
really
important
and
need
to
be
brought
forward
now..
D
So
the
first
is
three
million
dollars
for
homeless
management
services,
which
is
you
know,,
an
issue
that
the
city,
council
and
community
and
administration
has
been
grappling
with
in
a
lot
of
innovative
ways,
as
well
as
trying
different
policy
and
program
processes
to
sort
of
get
at
the
challenges
that
we
are
dealing
with
here.,
and
so
we
do
have
three
million
dollars
that
are
set
aside
to
be
able
to
address
issues
that
we
have
passed
council
direction
on
including
potential
issues
related
to
an
rv
parking
ordinance
and
manage
rv
rv
parking.
Some
security.
D
D
D
So
after
we
do
all
of
those
items,
we
have
about
ten
point:
four
dollars
million
remaining
balance,
and
so
the
city
council
policy,
one
that
tells
us
how
to
distribute
those.
And
so
we
need
to
be
looking
for
either
adding
to
our
next
year's
projected
deficit
reserve,
which
we
don't
have
a
projected
deficit.
So
we
don't
need
to
do
that..
Look
to
allocate
funding
to
the
budget.
Stabilization
reserve
trying
to
get
up
to
an
overall
general
on
reserve
level
of
ten
of
ten
percent,
and
also
to
look
at
our
unmet,
deferred,
infrastructure,
needs.
D
and
so
based
on
that
we're
coming
forward
with
a
recommendation
of
seven
point.
Six
million
here
for
the
budget
stabilization
reserve
would
take
that
reserve
up
to
sixty
one
million
dollars.
and
when
you
combine
that,
with
the
general
workers,
compensation,
liability
reserve
and
a
contingency
reserve
the
morning
talked
about
we
be
at
a
level
of
about.
D
Eight
percent
in
the
general
fund,
mean
kind
of
the
highest
in
memory
really
and
which
is
a
really
good
place
to
be
at
when
you
think
about
all
of
our
general-purpose
reserves,,
especially
as
we
start
heading
into
potentially
a
recessionary.
Period.
and
so
having
that
backstop
is
super
important..
It
was
also
a
little
bit
of
unfinished
business
that
council
directed
us
as
part
of
the
march
budget
message
to
set
aside
funding
in
the
budget
stabilization
reserve..
D
We
did
some,
but
we
really
needed
to
do
more,
and
so
this
gets
us
much,
much
closer,
and
then
we
do
have
2.8
million
dollars
going
into
the
fund
reserve
for
a
total
amount.
Now
of
six
point,
five
million
dollars.
one
of
the
primary
uses
of
that
is
to
eventually
replace
our
fms
and
erp
system,
which
is
going
to
cost
more
than
20
million
to
trying
to
shore
up
some
funding
there.
In
just
a
couple
of.
D
Touching
points
on
a
couple
of
other
major
city
operations:
we
have
the
airport
definitely
had
a
pretty
good
bounce
back
year
from
where
it
was
in
the
pandemic.
So
passenger
activity
increased
by
over
130
percent
and
revenue
performance
exceeded
the
budget
estimates
by
over
six
six
million.
and
we've
got
a
pretty
healthy
passenger
activity
projected
for
twenty
to
twenty
three.,
so
good
news..
D
There
are
also
some
good
news
in
the
san
jose
clean
energy
fund,
which
was
a
little
bit
of
a
rocky
start
over
the
the
last
year
and
we're
able,
with
the
rate
adjustment
enacted
by
the
city
council
back
last
december,
and
the
lower
piglia
cost,.
The
fund
balance
ended
at
eighty
point,
six
million
and
we're
currently
projected
to
end
the
current
year
at
one
hundred
and
seventy
one
million.
so
which
is
really
good
news..
We
need
to
get
our
reserves
up
in
that
fund.
D
Looking
at
some
of
the
capital
revenues
we
have
here,
building
and
structuring
construction,
excised,
the
blue
and
gold
bars
a
little
bit
of
a
downward
..
Those
are
revenues
generated
from
private
development,
construction
and
so
ended
the
year
sort
of
at
budget.
Maybe
a
little
bit
better
but
end
up
taking
that
budget
down
over
the
course
of
the
year..
So
we
need
to
keep
an
eye
on
that
downward
trend..
D
So
I
think
with
that
is
quite
a
bit
we'll
we'll
pause
here
and
just
again
want
to
thank
our
senior
management
team
and
everybody
in
the
budget
office
who
puts
this
document
comes
together
in
about
three
and
a
half
weeks,
and
so
really
just
really
appreciative
of
my
team
and
all
the
department
staff
who
works
with
us
to
put
this
document.
Together.
thank
you.,
thanks,
jim.,
that's
about.
F
F
Happened
this
past
week,
around
industrial
issues
and
tomorrow's
meeting
around
vision
issues
will
be
really
helpful
and
important.
I
think-
and
you
guys
know
my
feelings
about
the
importance
of
having
open,
accountable
public
policies,
practices
along
with
the
technology
and
when
you
get
those
things
together
and
what
will
be
possibly
a
year
in
this
year
and
next
year,
a
lot
more
surveillance
technology
than
previous
years,
and
it's
budgeting.
good
luck.
How
we
talk
about
open
public
policy.,
it
doesn't
have
to
be
a
simple
subject
and
that's
that's
an
important
concept..
F
F
Got
lots
to
talk
about
a
future
of
a
city
manager
item.,
it's
my
sincere
hope.
I've
spoken
often
here
that
into
the
next
administration.
We
could
learn
to
talk
about
the
city
manager,
role
at
public
art
when
she
speaks
on
agenda
items
at
the
beginning
of
each
meeting..
That
can
be
a
time
for
public
comment..
I
hope
we
can
learn
how
to
expand
the
public
comment
time,
a
bit
more
and
at
least
have
those
conversations..
G
Listening
with
great
interest
to
all
the
adjustments
that
are
being
suggested
and
possibly
voted
on-
and
I
just
thought
maybe
we
could
have
some
type
of
a
fund
in
the
future
where,
when
these
adjustments
are
being
made,
we
go
back
and
we
say
hey,
what
are
the
things
that
were
brought
up
at
the
at
the
last
budget
hearings
that
were
not
addressed,
that
people
really
in
the
public
were
pining
for.
and
so
one
of
them.
G
G
To
make
it
happen,
maybe
we
could
have
a
fund
where
it
says
it's
like
it
called
an
integrity
fund
or
accountability
fund,
or
something
like
that
where,
when
we,
when
we
have
pandemics
happen
or
we
have
unforeseen
events
happen,
but
we've
made
a
commitment
to
the
public,.
Maybe
we
could
draw
upon
those
funds
to
fill
that
gap
instead
of
putting
it
out
what
appears
to
be
maybe
years
to
the
future..
A
A
We've
got
a
lot
of
other
needs
and
we're
not
funding
them,
but
we're
we're
doing
a
pretty
good
job
at
least
really
preparing,
for
what
we
know
is
a
tough
is
likely
to
be
a
very
tough
economy
next
year,
and
I
really
appreciate
the
work.
uh,,
jim
and
ronnie
in
the
whole
budget
team
jennifer
her
leadership
over
the
years
um,
being
able
to
get
to
eighty
percent
of
operating
operating
expenses
now
in
reserve.
It's
been
since
I've.
A
I
think
next
year
and
the
following
year,
the
council
and
the
community
will
be
very
grateful
because
that's
what's
going
to
help
us
weather
the
tough
times
and
keep
people
employed
and
keep
services
in
place..
So
I
appreciate
everybody
pulling
together
to
make
that
happen.
um,
council
member
raina's.
Thank
you.
H
H
H
H
H
A
A
B
All
the
staff
showed
up.
I
said
I
need
to
ask
somebody
a
question,
but
thank
you
so
much
for
that
and
a
stewardship
of
the
budget,
and
it's
it's
good
to
see
that
things
are
healthier
and
it's
such
a
volatile
time..
It's
really
hard
to
really
know.
What's
happening,
now,,
what's
going
to
happen
next
year.,
but
it's
good
things
see
that
things
came
out
on
the
plus
side
in
most
cases
this
year
we
don't
know,
what's
going
to
happen
next
year..
I
have
one
question
on
one
item.
B
I
That
number
is
about
one
hundred
and
eighty
million.,
so
our
operating
expenses
are
about
a
million
dollars
a
day
and
we
are
targeting
one
hundred
and
eighty
days
of
operating
expenses
reserve..
We
are
planning
to
bring
forward
a
reserve
policy
to
council
in
december,
and
so
that's
something
that
you
can
consider
formally
there..
So
it
looks.
B
C
While
I
realize
this
is
a
snapshot
for
the
end
of
the
fiscal
year,
which
is
a
full
almost
six
months,
ago,,
I'm
more
concerned
about
looking
forward..
So
I
really
appreciate
the
efforts
in
this
in
your
adjustments
to
put
aside
funds
in
reserves.,
you
mentioned
earlier
that
we
we
like
to
have
three
percent.
D
D
C
C
C
C
D
Yes.,
it's
going
to
be
an
interesting
year
for
that..
You
know
we
do
have
very
little
experience
with
this.
Tax
is
really
just
our
second
full
full
year
that
I
think
so.
Oh
we
had
a
hundred
and
ten
million
and
twenty
one
twenty
two
we
knew
that
was
not
going
to
last.
That
was
heavily
influenced
by
some
pretty
large
commercial
property
transactions..
We
have
it
at
sixty
five
million
currently.
D
Right
now
we're
on
track
to
meet
or
exceed
it
right
now,
through
the
data
that
we
have
we're
really
good..
It
just
really
depends
on.
What's
going
to
happen
later,
on.,
it's
really
dependent
on
if
you
just
get
a
few
large
property
transfers,
you're
sort
of
good,
if
you
don't
a
few
of
those
you're
in
the
hole.
right.,
so
our
our
intent
when
we
came
up
with
the
city
council
policy
governing
measure
measure
is
a
general
fund
revenue
source.
we
allocate
for
homelessness
prevention
and
support
and
affordable
housing..
D
Our
intent
is
to
try
to
budget
that
relatively
conservative,
so
we
don't
get
overextended
and
we
do
have
a
good
chunk
of
money
in
reserves
that,
even
though
we
have
plans
for
is
necessarily
committed.,
so
you
know,
even
if
does
fall
short.
This
year,
we're
not
in
an
immediate
sort
of
panic
mode,
but
we
will
be
watching
that
very
closely..
We
come
out
every
couple
of
months
with
a
bi
monthly
financial
report.
C
C
So
I
in
in
the
budget
process
next
year,
we
will
need
to,
and
council
will
need
to
be
very
conservative
about
allocating
funds
to
any
new
programs
or
even
considering
new
programs,
because
this
is
the
time
to
tighten
our
budget
and
to
hunker
down
in
in
our
and
and
depend
on
our
not
depend
on
our
reserves
but
build
our
reserves
to
have
them
there,
because
we
may
be
in
a
time
where
we're
going
to
depend
on
them.
So
I
really
appreciate
that
we're
at
eight
percent
look
forward
to
getting
to
10
percent..
C
A
A
Going
back
to
fire
stations,
first.
yeah,
great,
to
see
the
the
three
point
eight
million
allocated
for
either
finnie
or
I
guess,
to
fill
some
of
the
gap
we
have
in
measure.
T
look
like
from
the
report.
The
gap
could
be
as
large
as
nine
million,
and
that
includes
both
ephiny
and
overruns..
Is
that
right?.
D
That's
right.
at
the
time
we
had
the
estimates,
I
think
that's
going
to
be
changing.
Potentially
we've
been
continuing
to
evaluate
where
the
majority
program
is..
We
do
have
direction
to
come
back
to
you
all
in
early
twenty
twenty
three
calendar
year
to
give
some
more
specific
recommendations
about
where
we're
at
and
how
we
can
try
to
close
some
of
the
gaps..
You
know,
it's
more
likely
that
that
gap
could
grow
rather
than
shrink.
yeah,
ok,.
You.
A
A
Five,
I
want
to
speak
on
this
because
I
expect
to
be
an
expert
on
this,
but
or
maybe
maybe
that
can
help..
I
know
we're
throwing
in
several
thousand
to
take
out
the
garage
on
station
eight,
but
I'm
hoping
will
begin
construction
well,
not
immediately,
but
I
know
it
will
be
soon..
On
section
eight
our
station
needs
replacement
along
the
st.
clair
street..
I
guess
my
question
is:
why
wouldn't
we
wait
and
demolish
everything
at
once,
assuming
that
seem
to
be
cheaper
rather
than
doing
it?
Piecemeal?
thank.
J
But
the
garage
is
separate
from
the
rest
of
the
fire
station.,
it's
back
behind
behind
the
actual
fire
station
building.,
it's
a
separate,
separate
building-
and
there
are
so
I'll-
have
to
follow
up
to
see
to
get
a
better
answer
to
your
question
about
why
we
can't
wait..
But
I
think
there
are
environmental
reasons
we
need
to
get
rid
that
sooner
rather
than
later.
ok,
yeah.
I
guess.