Santa Clara mayor highlights budget, city growth in annual speech

As Santa Clara faces ongoing economic struggles exacerbated by the pandemic, the city’s mayor on Saturday presented a brighter vision for the future.

During Mayor Lisa Gillmor’s first in-person State of the City address, she highlighted her administration’s approach to worsening local issues, such as homelessness. The city this past year has helped fund programs like mobile showers and laundry services for unhoused people, Gillmor said, along with rental support. The city has received about $2.5 million in state and federal funding to build subsidized housing within the next two years.

The mayor also focused on making the Mission City—which often makes headlines for high-profile fights with the San Francisco 49ers—a transportation and commerce hub. The city is planning high-density housing and uptown and downtown improvements such as bringing Bay Area Rapid Transit closer to Santa Clara, and the $8 billion Related Santa Clara housing and retail development.

“We’re the only city I know of that is going to build an uptown and downtown at the same time,” Gillmor said.

Budget woes 

While the city has an annual budget of $1.3 billion, it faces a $27 million deficit that’s ballooned under Gillmor’s leadership. Gillmor blamed declining revenue from sales and transient occupancy taxes stemming from the “drastic drop in hotel occupancy” during the COVID-19 pandemic. She said there’s also a $600 million need to tackle many infrastructure problems in the city, such as road improvements.

Some ideas to close the budget gap weighed by the city this year have included asking voters to revamp the city’s business license tax to charge large businesses more than those with fewer employees. Gillmor did not address the potential tax measure Saturday but focused on another revenue stream—Levi’s Stadium.

“We have not generated any revenue from non-NFL operations at Levi stadium since 2017,” she said. “A majority of the council approved a settlement with 49ers… so only time will tell if that was a financially prudent decision, or not.”

The 49ers in 2019 sued the city after Santa Clara lawmakers voted to remove the team as manager of the $1.3 billion stadium during non-NFL events. The controversial decision came after councilmembers questioned declining revenue from events at Levi’s Stadium and transparency in the team’s accounting procedures. The team blamed the drop in revenue on the city’s live events curfew which chased away major concerts and performers—what they dubbed a “music ban.”

After months of closed-door talks, city administrators accepted an offer from the NFL team last week to settle the litigation that will infuse millions of dollars into the city’s general fund.

Gillmor said Santa Clara has been ranked by the state auditor as being “low risk” for financial distress alongside Sunnyvale and Milpitas, thanks to reserves, revenue trends and debt burden.

A divided council 

The city is also grappling with a loss of leadership at the top—it currently has no permanent city manager or city attorney, both of whom were friendly to Gillmor and fired by the current council after the mayor lost political control. Rajeev Batra was hired as interim city manager.

“In the coming months, we will be replacing a city manager and a city attorney,” Gillmor said.

Some residents who attended the annual speech said they want to see more collaboration between the two factions on the city council, citing years of division and bitterness.

“I think just working together to improve the city is (key),” said Santa Clara resident Gary Christensen, a senior who works with Saint Justin Community Parish, a nonprofit that feeds more than 1,200 people each month. “I’d like the council to look more cohesive and together — and acting pleasant with each other.”

Several councilmembers echoed similar concerns, saying they felt left out of this year’s state of the city event. A real estate broker, Gillmor was appointed mayor in 2016 and won the mayoral election in 2018. She faces opposition for her seat this year from Councilmember Anthony Becker, who has frequently opposed her policy positions and clashed during council meetings. Gillmor allegedly blocked him on Facebook.

Becker told San José Spotlight on Saturday he felt the event was a “campaign puff piece put on for the mayor.” He said allowing Gillmor to put on a state of the city speech—using city funds—two months before the election is inappropriate. He also said councilmembers were not allowed to speak beyond reading scripts in videos played during the event.

“This is not a one-person game—we are a seven-person council,” he said. “We’ve accomplished a lot, and she never really gave anybody (councilmembers) credit for that. She’s very hypocritical, she likes to say we’re working collaboratively but she is the biggest obstructionist on our city council.”

The mayor’s hourlong speech was held at the Community Recreation Center and attracted about 100 attendees.

Vice Mayor Suds Jain said Gillmor painted an inaccurately optimistic picture of the city’s finances.

“It’s irresponsible for us to not have a bunch of revenue sources to fill that $27 million deficit. The mayor didn’t outline any specifics about budget efforts,” he said, noting Gillmor opposed remedies like the business license tax ballot measure. Gillmor voted against the measure in July, saying it would harm businesses of all sizes and place Santa Clara at a disadvantage to other nearby cities.

“She should have really highlighted it more, because this is our opportunity to tell the public that there could be more (cuts),” he said.

Jain also said Gillmor did not mention how “poorly written agreements” force the city to lose revenue from Levi’s Stadium to pay off its debt. The city’s budget deficit means reduced city services and hours at public places like libraries or pools.

“Unfortunately, we’re trying to just keep our heads above water,” he said. “The public needs to expect things will be tight for a while.”

Contact Natalie Hanson at [email protected] or @nhanson_reports on Twitter.