The San Jose City Council on Tuesday unanimously approved making massive cuts to the city budget for the fiscal year, as officials brace for an expected shortfall of least $45 million due to the COVID-19 pandemic.
“It’s going to be a long road for us,” Budget Director Jim Shannon said. “When we released our forecasts we had before COVID, we had a no deficit in 2021. But then, we did have a deficit projected in the following fiscal year. Things have only gotten worse since then.”
City Manager Dave Sykes said the city will begin furloughing its temporary, part-time and contracted employees that are not working starting May 4.
Two of the city’s biggest revenue streams — construction and city-led events — have dropped significantly. San Jose’s development fee program, which is supported by private construction contracts, is likely to drop by 40 percent between April and June, Sykes said. Similarly, Team San Jose — a nonprofit that manages the city’s tourism, arts and cultural centers — has already undergone two rounds of layoffs due to event cancellations.
San Jose will slash nearly $30 million from its budget for the next year to help avoid layoffs and save funds. The cuts will span across city departments, programs and future projects and will include a reduction in expenses. That includes $1.5 million in cuts to the South San José Police Substation, $1.3 million in workers’ compensation-related savings and about $500,000 from the city’s business cooperation program, which is a reporting and tax allocation program that offers rebates for certain tax payments.
The city will also pull funds from several programs and improvement projects, such as $3 million from the city facilities’ emergency power generation as well as more than $600,000 from several traffic-calming and safety roadway improvements.
In addition to the cuts, Sykes plans on offsetting the estimated shortfall with sales tax revenue generated from an $18 million agreement with eBay, the $2.6 million sale of the Hayes Mansion and using $24.4 million from reduced expenditures and in liquidated reserves.
City officials expect to release the proposed budget for next year on May 8.
Sexual assault work plan
Following an upward trend in sexual assault cases across the city, the San Jose council on Tuesday unanimously approved $690,000 to train law enforcement officials to combat the issue.
The new funds will provide the San Jose Police Department with “Trauma Informed Care” training, and additional staffing for a Special Victims Unit and new materials.
“We’re gonna have to expect a real increase in these crimes,” Councilmember Sylvia Arenas said. “By sheltering in place, there’s a definite opportunity for some of these perpetrators to continue with this type of crime, especially for the children that we know to be the overly represented number in San Jose.”
The unit will include two officers who will work on cases involving internet crimes against children, children exploitation, human trafficking and sexual offenders.
About $153,000 of the funds will be spent on materials, including six new vehicles, analytic software and GPS trackers, while $150,000 will be spent on trauma informed care, which provides police officers with sensitivity training and mental health resources to provide emotional wellness and prevent burnout.
The San Jose Police Department will also reserve $62,000 for educational outreach in partnership with the South Bay Human Trafficking Coalition by creating a promotional campaign to raise awareness on human trafficking.
At least $150,000 will be used to fund research on challenges the city’s law enforcement faces with combating the rise of sexual assault cases, including identifying age groups and demographics for outreach programs and understanding how relationships between police, victims and prosecutors affect police investigations.
In 2019, the police department received 2,585 sex offense allegations — a 18.9 percent increase from the year before. In the last five years, from 2014 to 2019, the police department has seen a 51.2 percent increase in sexual offense claims across the city. In March, the department was investigating 3,000 sexual offense allegations.
Rent freeze
Two weeks after the San Jose City Council approved moving forward with a citywide rent freeze, the lawmakers on Tuesday enacted the new law and added protections for homeowners.
The rent freeze calls for a moratorium on rent increases for all rent-controlled properties and mobile home parks. Instead of rolling back the rent freeze to April 1, the councilmembers voted for the new ordinance to go into effect immediately. It will give tenants until Dec. 31 to pay their rents back.
Councilmembers Sylvia Arenas and Maya Esparza voted against the move.
To help landlords, the lawmakers waived late payments on registration fees and permit fees for all apartment buildings regardless of unit count until 2021.
“Freezing rents is really critical to keeping residents in their apartments now,” Councilmember Pam Foley said. “It’s really important for you to have a piece of mind in the place that you’re living in and that you continue to stay there.”
The city is encouraging landlords to temporarily discount rents on the terms that the initial rent controlled rate will not be affected once the rent freeze is lifted. Under the city’s rent control policy, landlords can legally increase rents up to 5 percent once a year.
Contact Nadia Lopez at [email protected] or follow @n_llopez on Twitter.
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