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From YouTube: San José Budget Director Jim Shannon: Budget report for Fiscal Year 2019-2020 & Covid-19 Impacts.
Description
San Jose City Council April 28, 2020 Meeting, Agenda Item 3.3
A
A
It's
pretty
unusual
that
were
having
to
go
through
a
process
of
bringing
down
our
budget
by
forty
five
million
dollars
only
two
months
left
in
the
year
so,
but
that
just
goes
to
show
of
kind
of
the
crisis
that
were
in
I
did
want
to
just
mention
an
action
that
that
we
have
taken
outside
the
budget
process,
because
it's
really
an
administrative
issue
and
I
was
going
to
report
out
it
under
it
under
3.1.
But
I
think
it
fits
better
here
and
so
I
just
wanted
to.
A
Let
the
council
know
that
we
have
been
providing
administrative
leave
since
March
17th
to
all
employees
that
have
been
unable
to
work
and
the
vast
majority
of
our
employees
are
working
in
some
capacity
or
another.
But
there's
there's
some
that
have
not
been
able
to
to
work
for
various
reasons
and
we've
been
paying
administrative
leave
to
that,
and
we've
committed
to
doing
that,
certainly
through
the
current
order
that
expires
on
the
third.
A
The
fact
that
they're
on
furlough
means
that
they're
these
employees
still
going
to
be
in
our
system,
they're
still
considered
city
employees
and
and
they
will
be
exempted
from
any
type
of
process,
to
bring
them
back
on
they're,
not
going
to
have
to
reapply
to
continue
to
do
work
for
the
city
in
the
future
and
I
just
want
to
emphasize
that
administrative
leave
will
be
continued
for
further
notice
for
all
the
four
full-time
employees
and
and
part-time
benefited
employees.
So
just
wanted
to
make
sure
that
counsel
was
aware
of
that
administrative
action.
A
So
now
we're
going
to
jump
into
the
presentation
of
the
actions
that
we're
proposing
that
we
take
to
address
the
revenue
shortfall
in
the
current
year,
and
so
this
is
really
step
one.
If
you
will
to
address
a
significant
revenue
loss
in
the
current
year.
There'll
be
future
steps
that
we
will
need
to
take
in
the
proposed
budget
for
next
year
and
that
will
be
coming
very
soon.
A
You
know,
I
think.
The
approach
that
we're
taking
is
not
an
overreaction.
We
need
to
take
these
revenue
shortfalls
seriously.
They
are.
They
are
real
and
we
certainly
cannot
assume
that
we
are
going
to
be
reimbursed
for
from
loss
for
lost
revenue,
as
we
discussed
earlier
in
the
day.
The
recommendations
that
you're
seeing
come
forward
in
this
proposal
are
consistent
with
what
we
shared
with
the
council
in
early
April
and
just
once
again
to
emphasize
the
the
great
job
that
Jim
and
the
team
have
done
in
bringing
this
forward.
A
The
first
time
that
you're,
seeing
the
details
on
what
we're
proposing
so
I
understand
that
I
will
tell
you
that
it
took
a
huge
effort
to
get
this
out
to
the
council
by
Friday
and
as
soon
as
we
pushed
pushed
send
on
the
staff
report,
we
immediately
jumped
over
Saturday
morning
to
working
on
the
proposed
budget.
So
not
a
lot
of
time
for
any
of
this
work
to
be
done
so
I'll
just
end.
A
B
B
So
our
approach
as
Dave
mentioned,
it
was
also
consistent
with
how
we
talked
about
it
back
in
early
April
on
the
expense
side,
we're
looking
to
reduce
or
eliminate
some
existing
expenditure
appropriations.
A
significant
chunk
from
personal
services,
vacancy
savings,
so
at
the
end
of
March
Dave,
had
issued
a
memorandum
to
the
organization
implementing
a
hiring
freeze
that
froze
most
positions,
except
for
some
public
safety,
sworn
and
communications
positions.
B
So
there's
the
Vega
savings
from
that
action,
as
well
as
the
normal
vacancy
savings
that
we
have
been
accruing
throughout
the
year,
also
looking
to
reduce
those
non-coated,
19
personal
women,
expenditures
that
we
can
reduce.
So
that's
gonna
generate
some
savings
as
well:
holding
those
citywide
expenses
and
those
general
fund
capital
projects
that
hadn't
yet
started
that
that
that
can
be
frozen
and
then
those
those
savings
taken.
But
we're
also
are
considering
what
the
impacts,
especially
in
the
short
timeframe
that
we
have.
B
You
know
make
sure
that
we're
considering
what
those
community
impacts
might
might
be
as
well
as
factoring
in
what
our
organizational
capacity
is
kind
of
given
the
environment
that
we're
in
right
at
the
moment
and
then
are
very
real
future
budgetary
constraints
as
well.
So
I
was
all
kind
of
part
of
the
decision-making
for
how
to
reduce
the
expenditures
for
1920.
B
This
a
little
bit
of
extra
revenue
over
there
that
we're
gonna
bring
back
into
the
general
fund
to
help
solve
our
shortfall,
and
then
we
also
evaluated
the
use
of
the
various
reserves
event
that
we
have
in
the
city
I'm
see
which
ones
we
could
liquidate
to
help
us
solve
our
shortfall
here
so
high
level
for
the
sales
staff
for
all
the
revenue
adjustments.
You
know
we
went
over
this
and
you
know
a
little
bit
more
detail
back
in
April
7th.
B
So
we
won't
probably
get
into
the
weeds
as
much
but
the
biggest
component
here
for
our
45
million.
Is
these
cells
that
the
sales
tax
reductions-
and
this
is
one
of
the
gonna-
be
one
of
the
it's?
Certainly
the
largest
and
there's
also
gonna
be
the
hardest
to
figure
it
out
because
we
get
this
data
the
latest.
So
we
go.
We
get
sales
tax
revenue
on
a
monthly
basis.
We
really
get
true
ups
on
a
quarterly
basis
and
that
really
that
we
get
data
with
that.
B
That
tells
us
where
we
receive
that
revenue
from
and
exactly
how
much
it
is
per
per
quarter.
So
we're
not
going
to
get
the
revenue
for
the
derivative
data
for
January
February
March
until
from
unit
May,
and
then
we're
not
going
to
get
April
May
June,
which
is
our
most
critical
time.
As
you
know,
we're
not
gonna
get
that
until
mid
to
late
August.
B
So
that's
kind
of
the
the
uncertainty
that
we're
dealing
with
here,
but
looking
at
a
twenty
seven
million
dollar
reduction
in
sales
sales
tax,
which
would
drop
us
down
year-over-year
or
drop
us
down.
Ten
percent
from
what
the
budget
is.
So
that's
that
sales
tax
drop
all
in
just
a
short
amount
of
time,
because
sales
tax
was
trending
higher
prior
to
this
reduction,
pretty
significantly
impacted
on
the
the
quixote
tax
as
well.
So
these
the
transient
occupancy
tax
is
a
tax
placed
on
hotel
room
nights.
We
also
have
some
impacts
related
to
teo
team.
B
That's
a
part
of
some
special
funds,
so
some
pretty
significant
reductions,
they're
dropping
that
by
a
third
from
where
it
was
previously
budgeted
at
some
impacts
to
our
fees,
rates
and
charges.
So
because
we're
not
able
to
do
programming,
we
have
some
reductions
for
various
fees
that
we
collected
on
friday
night
service
and
we
have
some
smaller
reductions
here.
For
you,
you,
utility
tax
business
taxes,
business
tax
is
a
little
bit
smaller
because
we
actually
been
performing
pretty
well
to
date,
so
a
little
bit
of
a
smaller
reduction.
B
Although
we
are
expected
expecting
a
little
bit
of
drop-off
here
toward
the
end
and
some
fines
for
poachers
and
penalties,
I'm
allotting
related
to
parking
parking
fines.
So
that's
sort
of
what
we
call
like
sort
of
the
the
the
pure
general
fund
reductions
due
to
estimated
due
to
the
coated
19m
impacts.
B
You
know,
but
they're
also.
You
know,
we
also
are
gonna,
see
some
drops
in
revenue
related
to
our
development
fee
programs.
So,
although
right
now,
these
are
in
the
general
fund,
that's
a
fully
cost
recovery
program
and
so
I
kind
of
showed
that
here
below
the
line
a
little
bit
just
to
kind
of
provide
some
visibility
into
that.
B
Again
we
have.
We
only
have
a
quarters
worth
of
that
data
in
hand,
but
thinking
you
know
kind
just
based
on
the
analysis
that
we've
done
that
we
want
to
estimate
an
18
million
dollar
total
revenue
for
the
remainder
of
this
fiscal
year,
which
will
help
us
again.
We
were
waiting
to
receive
that
from
the
California
Department
of
tax
and
finance
administration.
B
Cdt
fa
I
got
that
right
and
once
we
got
that
in
late
February
and
went
through
the
process
of
evaluating
it
and
making
sure
that
it
was
there,
you
know
felt
good
enough
about
recognizing
that
that
revenue
to
help
solve
our
shortfall
here
and
then
there's
a
two
point.
Six
million
dollar
amount,
which
last
budget
for
the
1920
budget
process
had
assumed,
had
used
some
of
the
one-time
savings
related
to
the
Hayes
mansion
sale
to
pay
off
both
the
debt
related
to
Hayes
and
also
pay
down
some
other
other
debt.
B
You
know
we
had
intentionally
set
some
money
aside,
because
the
the
transition
of
the
new
owners
and
making
sure
that
all
of
the
liabilities
were
properly
transition
over
to
the
new
owners-
and
you
know
there
was
any
disagreements
between
parties
about
about
how
those
closeout
should
work.
We
had
intentionally
left
a
2.6
million
dollar
reserve
in
the
community
facilities
revenue
fund
and
now
that
we're
you
know
almost
through
the
end
of
this
fiscal
year
and
still
feel
good
that
we
can
transfer
that
2.6
million
dollars.
The
general
fund
was
always
the
10
for
this
funding.
B
We
have
some
savings
there
and
I'll
talk
through
what
we're
doing
with
our
reserves
to
help
us
balance
out
we're
not
yet
needing
to
tap
into
the
budget
Stabilization
Reserve,
but
but
we
are
able
to
be
able
to
read
purpose,
some
other
reserves
to
save
that
budget.
Stabilization
reserve
for
the
future
budget
process,
and
then
we
do
have
a
reduction
in
a
transfer.
B
So
we
we
had
a
transfer
to
a
special
fund
and,
after
additional
analysis,
looks
like
we're
not
going
to
need
that
transfer
after
alls,
we
can
pull
that
back
into
the
general
fund
so
for
the
departmental
expenses
here
is
a
listing.
This
is
also
shown
in
the
memo
of
each
department
and
what
the
total
departmental
savings
are
both
split
out
between
personal
services
and
non
personal
equipment,
as
I
said
before.
The
bulk
of
this
is
related
to
personal
services.
B
Savings
vacancy
savings
either
attributed
to
the
hiring
freeze
or
for
other
baby
savings
that
have
occurred
throughout
the
year.
I'm.
Sure
council
is
aware
that
you
know
we
we
we
do
have
a
pretty
high
turn
rate
for
our
vacancies,
so
we
always
anticipate
a
certain
level
of
vacancies,
and
so
here
we're
taking
the
budget
action
to
recognize
those
savings
by
reducing
those
department.
B
So,
between
the
personal
side,
the
not
personal
side,
that's
a
pretty
good
chunk
and
then
also
as
as
directed
in
that
make
April
7th
action,
which
is
a
memo
from
the
mayor
that
was
approved
by
the
City
Council
for
a
contribution
from
the
mayor
and
city
council
budgets
as
well,
and
so
that
totals
six
hundred
and
ten
thousand
dollars,
which
includes
two
hundred
thousand
dollars
from
the
mayor's
office
budget
and
fourteen
thousand
dollars.
Each
council
district
offers
a
proportional
reduction
as
well
as
I
think
about
ten
thousand
dollar
reduction
in
the
council,
general
of
procreation.
B
So
then
in
other
different
categories-
and
so
you
know
the
you
know-
I
think
we've
you
know
feel
good
about
the
the
package
that
we're
bringing
forward
here
today
has
some
minimal
impacts
to
both
the
organization
and
the
community.
But
it's
not
without
you
can
do
that.
So
some
of
the
things
that
are
felt
here
so
in
the
similar
grants
category
have
savings.
The
7.8
million
I'll
just
talk
through
a
few
of
the
larger
items
here.
The
listing
all
these.
B
These
are
any
attachments
to
the
each
individual
appropriation,
and
so
one
of
them
is
the
South
San
Jose
police,
substation
appropriation.
This
is
1.5
million
dollars
that
was
previously
set
aside
to
help
out
start
the
activation
of
the
police
substation.
This
was
a
couple
of
years
ago
in
a
previous
budget
message.
B
Shortly
after
this
allocation
was
made,
we
had
the
the
measure
measure,
T
measure
had
passed
and
so
as
part
of
measure
measure
T,
there's
funding
for
a
police
training
center,
whereby
once
that
is
built,
the
training
capacity.
That's
currently
at
the
substation
will
move
out
into
that
new
retrain
facility.
Then
we
be
able
to
activate
and
substation
for
its
original
today
use,
and
so
what
that
mean.
B
I
was
really
a
set
aside
to
help
us
with
fixtures
furnishings
and
he
needs
that
will
ultimately
be
needed
for
the
new
training
facility
and
to
help
activate
the
substation.
So
this
funding
is
recommended
to
be
taken
down
at
this
point,
because
the
freestream
facility
is
still
a
few
years
out,
but
we
recognize
that
you
know
to
open
that
facility
and
to
reactivate
the
substation.
We're
gonna
need
to
find.
B
So
those
items
have
been
trending
down
and
so
we're
assuming
a
savings
of
about
one
1.3
million
dollars
here,
and
then
we
have
the
San
Jose
3-1,
one
application
where
we
have
some
savings.
So
this
we
went
forward
with
a
few
of
the
functional
upgrades
for
that
for
that
project,
including
language,
but
we
are
recognizing
in
the
remaining
savings,
which
is
a
786
thousand
dollars.
There
move
to
the
capital,
expense
of
a
category
of
4.1
million,
and
the
bulk
of
this
is
related
to
the
emergency
power
generation
for
critical
city
facilities.
B
This
was
a
five
million
dollar
allocation
that
was
done
as
part
of
the
1819
annual
read
report
action,
and
so
what
this?
What
this
recommendation
does
here
is
that
it
it
preserves.
2
million
of
that
five
million
dollar
funding
for
the
most
critical
facilities,
but
then
does
let
let
go
three
million
dollars
of
that
original
allocation
and
I
think
this
is
going
to
be
a
continued
priority
for
us.
So
we're
gonna
need
to
keep.
B
You
know
searching
for
one-time
bits
of
money
as
we
go
forward
next
couple
years,
because
energy
resiliency
is
gonna,
continue
to
be
a
key
focus,
but
I
think
we
have
the
the
top
priority
who
using
the
remaining
two
million
dollars.
There
are
a
number
of
traffic
safety
projects
of
totaling,
six
hundred
nine
thousand
dollars
and
the
that
was
a
part
of
the
last
budget
mess
at
the
1922
budget
message,
I
believe
and
those
are
being
recommended
because
they
were
they.
B
They
didn't
start
yet
this
year,
although
they
had
there
was
work
to
get
those
going,
we're
recommending
to
take
down
the
expense
in
the
general
fund
and
those
that
those
costs
will
be
absorbed
and
prioritized
into
the
traffic
capital
program
in
the
neighborhood
traffic
calming
section
and
the
building
a
structure,
construction
tax
fund
for
those
safety
improvements
so
hoping
to
carry
on
with
the
same
level
service.
Just
funded
a
little
bit
differently
and
then
the
quiet
zone,
which
was
another
large
item
in
the
message
from
last
fiscal
year.
B
There
is
this
study
that
is
currently
ongoing
to
identify
the
potential
improvements
for
the
quiet
zone,
but
the
funding
available
for
those
provements
would
not
be
available
with
with
the
action
taken
today.
I
think
we'll
try
to
identify
some
other
sources
that
will
be
more
of
a
challenge
going
forward
to
implement
the
quiet
zone.
So
again
we're
still
waiting
to
see
what
the
study
those
are
and
then
the
transfer
so
we
had
transferred
in
for
a
couple
of
years,
we
had
been
supporting.
B
B
So
we
have
a
couple
two
different
categories
of
reserve,
so
one
of
them
are
earmarked
reserves
that
we
recommend
to
reduce
by
nine
point
three
million
dollars,
and
so
these
were
rooms.
They
set
aside
for
other
purposes
that
we're
going
to
liquidate
for
for
our
purposes
here,
to
solve
our
shortfall,
the
largest
of
which
is
the
salaries
and
benefits
Reserve,
which
has
a
main
take
down
by
five
point:
1
million
dollars.
B
The
current
balance
is
two
million
dollars.
These
were
different
ideas
to
help
broaden
the
or
diversify
how
our
employees
choose
our
health,
our
health
plans,
we've
been
doing
a
few
of
those
efforts
and
we've
been
able
to
absorb
those
costs
within
the
part
mental
budgets.
So
this
this
one
we're
recommending
to
take
down
by
one
point:
nine
million
dollars
leaving
about
a
hundred
thousand
dollars
left
sick
leave
payments
upon
retirements
Reserve.
B
This
is
a
reserve
that
we've
been
take
you
down
over
the
number
of
years,
a
little
bit
by
little
bit
as
our
our
my
ability
for
what
to
simply
pay
off,
maybe
for
those
folks
who
are
pending
retirement
in
Tier
one
their
payout.
That
liability
is
slowly
coming
down
over
the
years.
People
are
retiring,
and
so
we
are
recommending
to
reduce
this
amount
by
a
million
dollars,
and
then
this
last
one
slide
here
is
part
three
of
strike
team
of
seven
hundred
forty
five
thousand
dollars.
B
This
was
a
three
year
program
that
was
initiated
last
year.
So
this
is
your
three
of
it
that
would
have
been
in
twenty
one
twenty
two,
and
so
this
is
a
reserve
that
we're
recommending
to
eliminate
at
this
time
and
then
this
one's
little
complicated,
I
apologize
for
the
technique,
the
technical
use
of
this
last
one,
but
the
nineteen
twenty
ending
fund
balance
reserve.
You
may
remember
back
in
mid-year
me.
B
It
helps
us
budget
tighter,
and
so
what
we
had
assumed
is
we
would
have
twenty
three
million
dollars:
a
combination
of
excess
revenues
and
expenditures
savings
as
part
of
our
budget
balancing
process.
So
if
we
don't
hit
that
twenty
three
million
dollars,
that
means
that
any
shortfall
will
be
carried
forward
in
the
next
year
to
make
next
year
deficit
worse,
and
so
what
we
said:
here's,
okay!
B
We
want
to
make
sure
we
kind
of
fill
up
that
twenty
three
million
dollar
bucket
and
to
make
our
next
year's
problem
not
worse,
and
so
what
this
does
is
we
had
already
set
aside
a
million
dollars
with
twenty
three
at
mid-year.
That's
ten
million
dollars
is
temporarily
sort
of
on
loan
to
the
emergency
reserve
fund.
B
We
used
is
from
those
some
files
related
to
our
open
response,
but
we
think
that's
to
be
brought
back
in
prior
to
the
end
of
the
fiscal
year,
so
we
needed
another
13,
more
million
there
to
get
us
to
the
twenty
three
million.
We're
only
doing
it
because
we're
also
assuming
a
savings
of
five
million
dollars
to
liquidate
both
carryover
encumbrances
greater
than
three
years
that
we
want
to
capture
as
savings
that
will
ultimately
offset
what
needs
to
be
officially
budgeted
in
that
reserve.
So
I.
Hopefully
that
was
follow,
that's
a
tricky
one.
B
B
We
got
six
percentage
points
if
it
goes
to
the
special
fund
and
so
we're
recommending
to
take
that
down
by
a
pretty
significant
amount,
as
we
saw
earlier,
and
so
that
will
impact
the
three
partners
that
by
municipal
who
receive
that
funding,
so
it
will
be
a
reduction
to
a
cultural
grants,
partners
by
2.2
million,
to
see
if
he'd
be
but
a
2.2
million
and
then
will
be
reduction
transferred
to
the
convention,
Cultural
Affairs
for
point
four
million.
So
this
is
so
that's
the
impact
of
what
that
induction
will
be.
B
You
know
we,
the
good
news
is.
We
do
have
some
and
all
of
these
funds
here
we
do
have
some
reserves
and
backups
that
we're
helping
to
get
us
through
this
process,
including
in
our
cultural
Grants
Program.
So
that
will
be
helpful,
but
on
a
going-forward
basis,
we're
going
to
be
very,
very
careful
about
how
we
budget
and
allocate
funding
in
the
Convention
and
Cultural
Affairs
Fund.
This
is
the
funds
that
funds
team,
San,
Jose
operations
for
our
convention
facilities
operations
and
our
facilities
operations.
B
You
know
what
this
does
is
this
because
of
the
lack
of
events
and
the
lack
of
conventions
that
are
happening
between
the
kovachev
down
through
the
end
of
the
year.
You
know,
without
that
revenue
coming
in
and
hitting
us
so
short
and
so
late
in
the
fiscal
year,
especially
when
we
anticipate
some
pretty
big
events
in
the
late
spring.
B
B
Similarly,
in
our
convention
center
facilities,
district
revenue
fund,
another
special
tax
that
was
placed
on
a
large
number
of
hotel
rooms,
the
city
we
have
liquid
a
reserved,
helped
us
through
offset
some
of
the
shortfall
there
to
make
sure
that
we
can
make
all
of
our
guest
service
payments,
which
we
feel
that
we
can't
even
going
into
the
problem
here.
So
so
are
our
four
side
and
countless
for
citing
standing
aside.
Some
of
these
different
reserves
is
helping
us
through
these
done
here
valuation
follow-up.
So
we
monitoring
our
economic
situation
and
the
revenue
impacts.
B
You
know
all
the
way
through
the
end
of
the
fiscal
year
and
beyond,
like
I
said
it's
really
difficult
to
see
where
we're
gonna
be
we're.
Gonna
do
our
best
and
we're
gonna,
keep
you
updated
as
best
as
we
can
we'll
have
it's
June
or
March
April
by
Monday,
financially
report,
and
that
won't
have
sales
tax
a
in
it.
B
But
it
will
have
some
other
components
there
and
we
will
come
forward
with
a
recommendation
on
June
23rd
to
do
the
final
crooks
form
1820,
which
we
do
every
year,
did
you
so
it
will
be
anything
that
we're
learning
new
plus
any
other
shifts
that
we
need
to
accommodate,
and
so
with
that
I
just
want
to
say.
Thank
you
for
listening
and
also
a
big
huge.