Good morning, good afternoon. I'd like to call this meeting to order. If everyone could take a seat. We're going to get started. We're going to start with the roll call first. Toni, will you please take the roll? Kamei. Campos. Tordillos here. Cohen Ortiz present. Mulcahy. Here. Doan. Here. Candelas. Here. Casey. Foley here. Mahan. You have a quorum. Great. Thank you so much. Now, if you're able, please rise and join me in the Pledge of Allegiance. I pledge allegiance. To the flag of the United States of America and to the Republic for which it stands. One nation under God, indivisible, with liberty and justice for all. Today's invocation will be provided by the Silicon Valley Men's Chorus Council member Tordillos. Please tell us more. Thank you, Vice Mayor, and good afternoon everyone. For our final invocation of the month, we are pleased to be joined by the Silicon Valley Men's Chorus. Founded in 1983, the Silicon Valley Men's Chorus was first called the Lederman Chorus of San Jose and sang their first full length concert in June of 1984 as part of San Jose's pride celebration. In 1998, they changed. Or 88 they changed their name to the Silicon Valley Men's Chorus, or Sfgmc for short, embracing and more openly identifying themselves as a singing group made up out of and proud men, Sfgmc has celebrated a number of historic firsts over the years, and the group was the first LGBTQ organization to perform the national anthem for the San Jose Earthquakes and the San Jose Giants. Sfgmc most recent concert, legacy, honored their more than 40 year history as a home for voices and allies with their largest chorus yet honoring the past while affirming how Lgbtqia two seconds plus identity continues to grow and thrive. Sfgmc vision is to inspire and unite our diverse community through musical excellence and collective pride. So without further ado, please join me in welcoming the Silicon Valley Men's Chorus. Doo doo doo doo doo doo doo doo doo doo doo doo doo doo doo doo doo doo doo doo doo. Out of the ruins and rubbles. Out of the smoke. Out of our night of struggle. Can we see a ray of hope. One. Of health and grace. Reaching for the day. We can build a beautiful city. Yes we can. Yes we can. We can build a beautiful city. Not a city of angels. But we can build a city of. Doo doo doo doo doo. We may not reach the ending, but we can start. Slowly but true. Mending brick by brick. Heart by heart. Now. May be now. We start learning. How. We can build a beautiful city. Yes we can. Yes we can. We can build a beautiful city. Not a city of angels. But we can build a city of. When you're trying is all but shattered when you're faced is all but killed. You can give up bitter and bad. Or you can slowly start to build. Can start to build. Build a beautiful city. Yes, we can. Yes we can. We can build a beautiful city. Not a city of angels. But finally. A city of man. Doo doo doo doo doo doo doo. A city of man. Thank you so much. Such beautiful voices. And I just want to acknowledge while they're still here, that the Silicon Valley Men's Chorus always sings for us at the two pride events that we have in June and August. So it's wonderful to see you here in chambers singing for us. Thank you for being here. And now we'll. Council Member Ortiz, please join me at the podium as we recognize and proclaim Ernesto Galarza de. Thank you so much, Vice Mayor. And if I could be joined by members of La Raza Historical Society and La Raza Roundtable. It's an honor to stand here today with La Raza Historical Society as we come together to celebrate and uplift a powerful, legacy rooted right here in our very own community. Today, we recognize Doctor Ernesto Galarza Day, a moment to reflect on a life dedicated to justice, education, and dignity for working families. Doctor Galarza story is one of resilience from humble beginnings starting in Mexico to becoming a scholar organizer and advocate he never lost sight of the people he was fighting for here in San Jose. Doctor Galarza made a lasting impact teaching at San Jose State organizing farm workers and helping lay the foundation for what would later become the United Farm Workers Movement. He didn't just study injustice he challenged it. His work exposing the abuses of the Bracero Program brought national attention to the exploitation of immigrant laborers and contributed to its end. In 1964. But beyond his accomplishments, what makes Doctor Gallardo's legacy so powerful is that it continues to live on through organizations like La Raza Historical Society, through your work to preserve our stories, uplift our history, and ensure future generations understand the shoulders that they stand on. This proclamation is not just about honoring the past. It's about carrying that legacy forward. It's about continuing the fight for equity, opportunity, and justice in East San Jose and really far beyond. And now it's my honor to invite Violeta Perez of the La Raza Historical Society to share a few words and following her a short talking points from Rose Amador from La Raza roundtable. Thank you. Council members, most especially Peter Ortiz and his office for this honor to receive a long overdue recognition to Doctor Eernesto Galarza. The most prolific Mexican American to come from California and arguably the country. He fought tirelessly for labor rights. And when most of us thought that the Bracero program was a great opportunity, he saw beyond that and and fought until he could have that program ended across the country. Because he did that, he opened the door for the farmworker movement. As a historical society. It's our responsibility to share these stories truthfully with dignity, to celebrate our our leaders. We are also opening our own house at the San Jose History Park called Casa de la Raza. We hope you all come. Thank you for this honor. We will continue to work to bring Doctor Garcia's work to light. He was just an outstanding, outstanding man and his contributions deserve to be recognized. Thank you. The round table on Rose Amador, co- founder of the Round Table, and the Round Table, proudly extends its heartfelt congratulations to the Historical society on the City of San Jose's proclamation, recognizing its invaluable contributions to the cultural, civic, and historical fabric of our community. This honor reflects decades of dedicated work to preserve, uplift, and celebrate the stories that define our people's resilience, resilience and achievements. The Round Table is especially proud of our ongoing collaboration with with the Historical Society across multiple community initiatives. Among these joint efforts, the recognition of doctor. Ernesto Galarza stands as a powerful example of what our partnership can achieve. Doctor Gallardo's legacy as a scholar, organizer, and champion for workers rights remains a cornerstone of our collective history. The Historical society's commitment to honoring his life work and our collaboration in amplifying that that recognition ensures that his contribution continue to inspire action and pride throughout San Jose. We celebrate this well-deserved proclamation and look forward to continuing our shared work to preserve our history, empower our community, and advance justice and representation across the city. La Raza Round Table stands with La Raza Historical Society today and always as partners in cultural stewardship and community progress. Congratulations. The Vice Mayor will now present the proclamation. I just shared with them that as a school board member for the Willow Glen area, for San Jose Unified, Ernesto Galarza is one of the schools in my district. But I had no idea that was the history of all that he has contributed to our society. So I'm honored to learn that today I should have done my research more when I was a school board member. Next, I'd like to bring forward Council Member Duong. Please join me at the podium as we recognize Happy Hollow Park and Zoo 65th anniversary. But I don't see Danny the Dragon. See, when you when you ask here come Danny. Fantastic. Hello everyone. Today in council we are celebrating this very special milestone. The 65th anniversary of Happy Hollow Park and Zoo. For 65 years, Happy Hollow have been more than just park or zoo. It has been a place where generations of families in San Jose have come together to learn, laugh, and create lasting memories from childhood field trips to weekend family outings to space have connected our community to nature through play, discovery and joy. Through its incredible commitment to animal care, conservation, education and family friendly recreation, the park and zoo continue to inspire curiosity and a deep sense of responsibility for the world around us. It is a place like this that helps shape future generations, encouraging young minds to explore, to care and to dream. Dragon here with us. Truly, a San Jose celebrity and to recognize the amazing Happy Hollow staff. Your dedication, your passion and hard work are what made this place so special. Year after year. And we recognize this milestone alongside with Vice Mayor and obviously our mayor, Matt Mahan and my colleagues. We celebrate not just the 65 years, but the many more to come. And I will end on this because no celebration at Happy Hollow would be complete without a little fun. After 65 years, this place had proved that you are never too old to monkey around and have a great time. Congratulations again and thank you for the 65 wonderful years of service, education and community. Here's to many more magical moments ahead. Thank you. Now Vice Mayor will hand the commendation to. I'm sorry. Thank you, Council Member Johnson. I'm the director, the Parks and Rec department, 65 years. That's many generations that people have been going there and visiting. I know when I walk around there, I often see grandparents who are with their grandchildren. Tell me the story about, hey, they they went there as a child. And so we see that always going on at Happy Hill because it's such a great place for kids. It's such a great place for them to learn through play, which is really something we try to do. More than 400,000 people visit the zoo every year, making it one of the most popular attractions in the whole city. Of course, they go there and they create these great memories that last forever. And some some people, it's their first encounter with any kind of an exotic animal, and it's where almost 100 animals call themselves home. And it reflects a core mission of our department, which is to create welcoming spaces that promote play, learning and community connections. And so in that vein, I want to let you know about a few things coming up this Friday, we're celebrating the 65th anniversary at the zoo. So if you have kids or not, doesn't matter. You still can be a kid at heart. Feel free to come by and celebrate with us. We have our Earth Day celebration. Sunday, April 26th and senior Senior Safari starts in May, which is a very popular event with our older adults. So I just want to thank a few people. We have our brand newly minted General manager Mario De and his team. Standing next to him is our brand. Newly retired former General manager Kirsten McCormick. Thank you. Kirsten, you've been such a great job with the entire team, all our volunteers and community that supports us and continues to come out and have memberships with us and so on. I also want to thank the Happy Hollow Foundation. Their executive director, Rhonda Norris, is here. And I want to thank their board as well. They did a great capital campaign on their own, working with us to completely re-envision the Danny the Dragon Ride. So if you haven't been there recently, you should come see the new stuff. And then certainly Council member Doan for recognizes and the mayor and council for all the years of support. So on behalf of the department, we're honored to be part of this legacy in these 65 years. Thank you. Thank you. Well that's fun. It's always good to learn something we didn't know. And learning about Ernesto Galarza and then seeing Danny the Dragon and celebrating an anniversary. That's that's wonderful. Moving on to orders of the day. Before I begin, I just like to announce that we have a lot of people here to speak on a couple of issues, and so we will be limiting public comment to one minute. And that's for the whole council session going forward. Do any council colleagues have any any changes to under orders of the day to the agenda? If not, then I will move forward to the closed session report. Yes. Mayor and council met in closed session this morning to go over the items as listed on the agenda, and there's nothing to report at this time. Great. Thank you. Next is the consent calendar. Are there any items that the council wants to pull from the consent? I understand that Council Member Kamei will be pulling. 2.13 declaration of city's commitment to opposing the coercion of institutions of higher education. For comment with that, do we have any public comments on the consent calendar? I have no cards for that item. Okay, then let's move to Council member Kamei. Thank you so much, Vice Mayor. I just like to thank all who have spoken or sent letters of support regarding the resolution. We stand in solidarity with our higher education part partners, and it's deeply important. I appreciate all the community members, the university partners who joined us last week regarding today's resolution of support, and I just wanted to go ahead and move the entire consent calendar. Second. Is there any further discussion on consent? Don't see any hands raised so let's vote. Toni. Motion passes unanimously. Thank you. The next item is the report from the City manager, Jennifer Maguire. Thank you very much, vice Mayor Foley. I do have a report today. So some time ago, I had a simple idea where city employees would step outside of their everyday roles and come together as one team to volunteer in the very communities we serve. I am so happy to share that this idea has come to life as this Thursday March 26th will be the first ever one team, one city, one Community Day of service. City employees will leave their daily activities and get out from behind their desks in many cases, and take part in community service projects across the city. Some of the projects include serving lunch at our senior centers, rolling up our sleeves for park beautification projects to plant trees and paint a colorful mural, cleaning up our trails, making cozy blankets for our furry friends at the animal care center, and so much more. The day will start at Kelley Park, where we will deploy 600 employees. Yes, 600 employee volunteers to various community centers, senior centers and parks. In all ten of our city council districts, including in district one, will be deployed to Starboard Park in Cypress Senior Center, District two, Great Oaks Park and Southside Community Center, district three, Guadalupe River trail, North Side and Roosevelt Community Centers. District four, Coyote Creek Trail and Berryessa Community Center. District five, Hillview Park. Hank Lopez and Mayfair Community Centers, district six, Guadalupe River Park Trail and the Gardiner and Willow Glen Community Centers. In district seven, we have Happy Hollow Park and Zoo and the Alma Senior Center, Lehninger and Seven Trees community Centers. In district eight, we have Evergreen Park and Library and the Evergreen Community Center in District nine, the dog Park Pedestrian Trail, and Camden Community Center. And in district ten, the Hoffman Neighborhood Park and Almaden Community Center. Mayor and city Council members. You, of course, are welcome to join us at these locations to see our city employees in action and to recognize the passion and commitment they bring to the community we serve. I want to sincerely thank Deputy City Manager Angel Rios for serving as the executive sponsor of this incredible event. A big thank you also goes out to the City Manager's Office of Employee Relations and Human Resources Director, Aram Cunningham, for his leadership, Human Resources Division Manager Randy Perry, human resources analyst. Regina Antonio for leading this effort. And to the city's parks volunteer team. Beautify San Jose, Happy Hollow Park and Zoo and our dedicated planning committee made up of representatives from all city departments who have worked very hard to ensure we have a wonderful and meaningful day, which will help us build a stronger, more connected San Jose. It takes a village to do something like this with 600 employees. Would all of you who helped plan Thursday's amazing day of service please stand so you can be recognized for your contributions in bringing this vision to life. Let's give this planning team a big round of applause. I'm so proud of them and. You may notice the blue shirts that some of them are wearing that would. That was designed by one of our city employees as well. So that is very cool. So thank you very much. I am incredibly proud of this team. Our employees all give so much through their daily work and contributions to our city. But to contribute time to this day of service demonstrates that service is not what they do. Just as part of our jobs, but it's also who they are as people, as neighbors, and in many cases, as members of the San Jose community themselves. Thank you and looking forward to an amazing event on Thursday. And I'm again, super, super proud of this event coming up. Thank you very much. That's the end of my report. City manager, I remember when you brought that through last week last year, and I thought, really? But now we have so many people who are involved and I'm just so grateful that so many of our staff, people who actually live in San Jose as well are out doing work in our parks and areas to beautify the community. So thank you for organizing that. And thank you for the committee for organizing it and and being present in the work that you do. The next item is item 3.3, City of San Jose Investment Policy Annual Review I. Before we I turn the podium over to the city attorney, I will. I want to acknowledge that I will be recusing myself due to my ownership of Amazon and Microsoft stock. So I'm going to be leaving the meeting while this continues on and someone else will. It's in your hands. I also will recuse myself due to a financial conflict of interest. Council members. It's. It's. Now, if there's no other recusals at all, it's now appropriate for you to select amongst yourself, somebody to act as a pro tem for this item and a motion and then a second and then a. Vote. I did not catch the audio on that. I don't think the microphone was on. It. Was it? There was a motion from Council Member Casey to nominating Council Member Cohen to serve as. It's the wrong item you're voting on, but. Okay. That motion passes 8 to 0. All right. Well, thank you, colleagues. And I know, Maria, you're here to present our annual investment report so we'll turn it over to you. Good afternoon, Vice Mayor. Members of council, city manager and staff. I'm Maria Oberg, director of finance. I'm here with Chenyu Sun, deputy director of finance. We do not have a presentation for you today, but we are here to answer any questions you may have. Okay. See, that's what happens when I don't get the notes ahead of time. But thank you for. Thank you for the introduction of the item we have in front of us. Our annual investment report. And we're going to go to public comment first. Before we start public comment, I just want to remind everyone to be respectful and thoughtful of their fellow audience members and the council members. We we ask people not to cheer or boo or applaud in any way. We want to be able to hear everyone and hear Toni calling out the next speakers. And so with that, we will turn it over to Toni to call our public commenters. Thank you. I'm going to call 5 to 7 people to start. I will keep an eye to see who's coming down. I have currently about 60 cards. That's six zero. You each have one minute to speak. The reason we ask you not to cheer and we ask you to do like jazz hands or some other visual way to show your support is to allow us. So the last person in line doesn't have to wait extra time while waiting for cheers to die down. So I'm going to start again with the first 5 to 7 I have. I think it's Joan Simon, but it might have said John Simon, Alice Dylan or possibly Diane. Ethan. John from the students for Democratic Society, Tamar and Shonda Witkin. Come on down and you do not have to speak in the order that you're called. Good afternoon. My name is Joan Simon. I represent the San Jose Peace and Justice Center, and I am a Jewish resident of San Jose. I am here to urge council members to lead by example, to stand with the people of San Jose, to do what is ethical, just, and compassionate to divest from the companies that profit from the brutalization and death of people. I urge council members to have the City of San Jose divest from the genocidal Israeli government, stop the funding of the of innocent Palestinian children and the. For starvation of the Palestinian people and the of over 70,000 Palestinians. I urge council members to divest San Jose from corporations cooperating with Ice. The city should not cooperate at all with Ice, and the city needs to protect the populace from the Kidnapings. Thank you. That's your time. Next speaker. Hello. We acknowledge that the land we gather in today sits on the unceded ancestral homeland of the Muwekma Ohlone. These are the words I have heard you say and which make me so proud to be from San Jose. Meanwhile, caterpillar and other companies profit by selling their goods and services to groups which use them to steal land from indigenous communities. Do you remember Rachel Corrie, the brave American girl that stood in front of a Palestinian home in an attempt to block its unlawful demolition by the Israeli military? The caterpillar that came did not stop. It crushed her to death. I am not asking you to stand in front of a bulldozer to save indigenous lands. I am just asking you not to invest our money in companies that knowingly provide the tools to carry out these crimes. Thank you. Next speaker. Good afternoon, City Council and staff. My name is John Ryan. I'm a alumni and grad student at San Jose State and president of students for a Democratic Society at San Jose State. I'm joining the call for you to divest from companies that participate in Israel's wholesale genocide of the Palestinian people, to divest from companies that are backing Trump's war on Iran. This is a criminal unjust genocide. And I'm joining the call for you to divest from caterpillar, alphabet, Microsoft, Honeywell and Amazon. It is. The rational thing to do. It is the reasonable thing to do. And divestment is an effective way to exert pressure on Israel until it complies with international law. I call upon you to divest our city funds from those corporations today. Thank you. Next speaker. Hello, city Council and staff. My name is Ethan Pham, and I am a home health nurse and homeless outreach nurse here in San Jose. I'm here to demand that the city of San Jose show up for their most vulnerable residents by introducing and passing a much needed ethical investment policy today, which will divest city funds from companies with direct ties to Ice. San Jose is a sanctuary city, and we should reaffirm this by divesting and barring any further investments into companies such as alphabet, Microsoft and Amazon who have contracts with Ice and other deportation operations. I'm here to demand that San Jose City Council pass an ethical investment policy today that permanently divest from companies complicit in Ice terror operations nationwide. Thank you very much. Thank you. Next, speaker I'd also like to call Daniel with J. S u Serrano, Dina and Jonathan Engelmann. Come on down. Go ahead. Hi, my. Name is Dion. I'm a resident of district ten and a local educator in San Jose. I'm calling on San Jose to follow the lead of Dublin, Alameda and Albany to pass an ethical investment policy that would divest from caterpillar alphabet Honeywell, Microsoft and Amazon. San Jose as a leading city in California should take a stand for human rights, which is not beyond the purview of the city to comment on issues related to international affairs. Because there are people in this city who I've met who have been impacted by the situation in the Holy Land. I met someone here who had many of their family killed by the bombing of Lebanon in 2024, and Ice is coming to our airports with the technology that Amazon provides as well. Thank you. Thank you. Next speaker. Hello, my name is Tamara Katz. I'm from Israel and I live in San Jose in district nine. I'm also a parent, and like many of you, I want the city to focus on things that matter most to families, our schools, parks and essential services. I'm asking you to support staff's recommendation and not add more companies to the social Responsibility divestment list. Divesting from these companies could cost San Jose 3 to 5 million a year. That's money that should stay in our community, not risk cuts to services that affect all of us, especially our kids. I also support the city's long standing policy of avoiding position on foreign policies, taking sides in matters outside city jurisdictions is divisive, and districts, from what I are elected to do, serve the residents of San Jose as a parent, as a resident, and as someone who cares about our community I asked. Thank you. That's your time. Next speaker. Hello, my name is Shanda Witkin, resident of San Jose District two with three elementary aged children. The Executive Director of Congregation, Shir Hadash. I'm here to express strong support for the staff's recommendation to reject adding additional companies to the city's social responsibilities divestment list. The city has long maintained a policy of not taking positions on foreign policy matters. That policy reflects wisdom and restraint. Foreign policy is complex, often divisive and well beyond the jurisdiction of local government. When we move into that arena, we risk dividing our community while stepping outside the scope of our mandate. Consistency matters. If we set aside this policy now, we erode a standard that has helped guide decision making across many different issues and moments. We should not make exceptions based on the issue of the day. These companies are doing business worldwide. San Jose does not need to step in as a moral guide. This is not the role of city government. I care deeply about these issues globally and at home. I also believe we must stay grounded in the proper role. Thank you. Next, speaker, I'd also like to call Julia mates or Matt's Sage and Shaina. Come on down. Go ahead. Dear council members, my name is Daniel Klein. I'm the CEO of Jewish Silicon Valley and a resident here of San Jose. And I share your profound frustration regarding the actions of Ice as a parent, the sight of families being separated in our own communities is deeply personal and painful, which is why my concern about the sobering roadmap of unintended consequences of the divestment movement, according to the report by staff, this move would trigger an immediate 2 to $5 million loss in the long term, revenue reduction of 15 to $35 million over a decade. Crucially, this financial to San Jose would have zero impact on ICE's budget or operations, as we already face a $56 million projected deficit. I propose an alternative approach explicitly earmarked the 15 to 35 million in projected earnings from these companies for a dedicated legal defense fund for our most vulnerable residents and or to fund healthcare for those in need and or to support our struggling schools, including the one my children attend that is currently facing. Thank you. Next speaker. Hi, I'm Jonathan Engelman with the Jewish Community Relations Council of the Bay area, one of City Council's most important responsibilities is keeping residents safe. When this conversation expands from a narrow local investment policy review into a debate about global conflicts, it fuels division and creates a climate where Jewish residents, your residents, feel unsafe. We've seen that in recent months in Michigan and in New York, and we've seen it even here in San Jose. Respectfully, we're asking you to keep today's deliberations focused on what you can control fiscal stewardship and decisions rooted in local impact. If the council wants to discuss values or human rights concerns, there are more appropriate tools than turning the city's investment policy into a broad geopolitical litmus test. The Jewish community in San Jose is already feeling the effects of rising anti- Semitism. Please keep this discussion grounded in local responsibilities and avoid actions that import global conflicts into our neighborhoods, increasing tension and harming community trust. Thank you. Next speaker. Good afternoon, Council members. Thank you for this opportunity. I'm Dina. I'm a long term resident of San Jose living in D6. I'm here today to urge my city council to pass an ethical investment policy. The time is now for San Jose to follow and adhere to moral principles of humanity. For all. San Jose must not participate or profit from investments in companies that are complicit. Having direct ties to Ice. Each one of these companies, namely alphabet, Microsoft, Amazon are actively terrorizing our community with their platforms. There are ethical alternatives. You just have to look beyond the surface. We all must be aware of the detrimental long term impact our city's investment in these types of profiteers. Do we really want our future generations to know that San Jose has profited from this terror on our local and international community? Despite what some of the others have said about something way over there. Our community. Thank you. That's your time. My name is Julia. I'm here on behalf of the Jewish Community Relations Council of the Bay area, a local organization focused on the safety, well- being and civic inclusion of the Jewish community across our region. We are asking respectfully that today's discussion remain focused on matters within the council's purview, particularly policies that directly impact the safety and security of San Jose residents. In recent months, we've seen a troubling rise in anti-Semitic incidents, including in San Jose. At the same time, we've also seen that when local bodies take up geopolitical issues outside their jurisdiction those conversations can quickly become divisive and almost always contribute to rhetoric that makes members of our community feel less safe. We fully recognize that people hold deeply felt views on global issues but this council's role is to serve the residents of San Jose to make decisions grounded in local impact, where you can directly improve public safety, strengthen community trust and bring people together. Thank you for your consideration and your leadership. Thank you. Next, speaker, I'd also like to call Musa with C a I r a Kamei Wendy Maria Lynch, and Alex. Go ahead. Good afternoon, council members. My name is Shayna. I'm joining the call for an ethical investment to remove our city funds from any companies that are complicit with Ice and complicit with Israel, a country that has numerous international law violations and currently carrying out the genocide of indigenous peoples. Palestinians. Let's talk about safety. When we look at the terrorism that we've seen Ice pulled out in Minneapolis and LA, and even in our own airports, I see clear parallels between what is happening here with Ice and what is happening in Palestine, the West Bank and in Gaza. And that's no, that's no mistake. We know that CBP has had ties with Israel's military force for decades and we see that in their tactics, the way that a security force is imposed on Thank you. That's your time. Next speaker. Hello, city council and staff. My name is sage and I'm a community member of San Jose. I'm calling on San Jose to divest from caterpillar, alphabet Microsoft Honeywell and Amazon because these are companies that are directly that are directly facilitate Ice terrorists against our immigrant neighbors in the US and war machines. And these investment amount to around 4% of San Jose's investment portfolio. Continuing to invest in these companies breaks public trust and corrupts, corrodes the values of this city as a public service institution. And I am here shaking because I am. I work for one of this company and I'm just really deeply terrified that they can just get ice to detain me or to honestly just me if I say the company I work for. So that's why. But I still say I'm here to tell you, just please save us from these According to the city of San Jose's most recent quarterly investment report, over $115 million of our city funds are currently invested in corporations with direct ties to Israel's genocide against Palestine, including caterpillar, alphabet Microsoft Honeywell and Amazon. These corporations provide equipment and services which Israel uses to commit war crimes against Palestinian civilians and to enact Trump's war on Iran, driving up everyday costs for San Jose residents. Divestment is an effective way to exert pressure on Israel until it complies with international law. I call upon you to divest our city funds from these corporations today. Thank you. Next speaker. Good afternoon. My name is Wendy Greenfield, and I speak on behalf of the many Jewish residents of San Jose and organizations like Jewish Voice for peace, who urge you to make it sound policy, to make only ethical investments instead of investing our money in companies like caterpillar alphabet and Microsoft that together invest $38,465,000 in Israel's government and military at a time when it has been engaged in horrific genocide opposed by the majority of people in this city, county and nation. These ongoing attacks also produce climate pollution, principally in Palestine, but also worldwide, producing over 31 million tons of carbon emissions. In just the first 15 months since Israel's attack. Our money should be invested in companies that support health, education. Thank you. That's your time. Next, speaker, I'd also like to call Azazel Lori, Katcher, Uriel and Spencer H. Calm. Hello Council members, my name is Moussa with care, the Council on American Islamic Relations. And we want to urge you to pass an ethical investment policy in support the memorandum from Council members Ortiz and Kamei to divest from companies doing business with Ice. Ice continues to terrorize immigrant communities, separate families and erase due process and basic human rights in San Jose. San Jose should not be complicit in that. Abuse at the gold investment is a natural next step in aligning the city's financial practices with its commitment to protect its residents. The same weapons and technology being used to imprison and children in Gaza are being used by Ice to brutalize Americans. San Jose must ensure the city's public funds are no longer used to bankroll genocide, ethnic cleansing, war crimes or mass deportation. Not in Palestine, not in Iran, not anywhere. And not in San Jose. San Jose must protect all its residents, and it must permanently cut ties with fascism abroad and at home. Thank you. Thank you. Next, speaker. Hello, my name is Maria Lynch and I am a constituent of Mr. Mulcahy. In July 2024, the International Court of Justice ruled that Israel's entire occupation of Gaza and the West Bank, including East Jerusalem, is illegal and violates the prohibition against apartheid. According to a former UN official. This ruling makes BDS not only a moral imperative in constitutional and human right, but also an international legal obligation. I also say to my friends here in the room, there is nothing divisive about standing against a genocide that our tax dollars are paying for. Please divest from these companies and free Palestine. Thank you. Next speaker. Thank you. Good afternoon. I'm a Kamei with the Immigrant Protection and Empowerment Network, cross- sector Collaborative across the county, and I'm here to urge you to support the memo from council members Ortiz and Kamei. Restricting new investments in companies that provide services to Ice. This is a reasonable step, and you all have provided really strong leadership for our city in San Jose and as a model for cities across the county and across the region, you've been leaders in stepping up for no staging zones, for no masking for your de-escalation plan. So I ask you to continue to follow those values in providing concrete benefits to community and also value based in approving that memo. Thank you. Thank you. Next speaker. Good afternoon. Council. My name is Uriel. I'm with Community service organization in San Jose, San Jose resident. And D3 is more specifically resident. I'm here in support of the memo put forward by Peter Ortiz and Rosemary Kamei to let investments in Amazon, Microsoft and Alphabet, who have direct those companies. We have seen ISIS direct impacts in our communities here in San Jose with deportations of South Bay families with Kidnapings, and even just recently, Ice agents pulling a gun at community members for entering a lobby of a building down in Southside San Jose. We cannot permit Ice to have such harm in our communities. We need to stand with our community members, as you all have in passing the anti masking policy, reaffirming our sanctuary city. Thank you that your time. Next. Speaker. Hello, my name is Spencer. My wife and I have been living in D6 for almost 40 years. I have devoted countless hours as a volunteer, serving on multiple city boards and commissions. According to staff's unbiased memo, San Jose already forgoes half $1 million a year, boycotting investments in three companies. Now, some are suggesting that we add five more names to this list bringing the annual price tag to $5 million. Investment boycotts have no impact on national or international affairs. How can we possibly justify losing $5 million in investment income per year when we face a $56 million deficit? What programs will be cut? How much police overtime will be canceled? Staff calls this investment boycott untenable. I urge Council to uphold fiscal responsibility and fiduciary duty as core civic duties and values. We have also heard some inflammatory comments on foreign policy today, which resides. Thank you. That's your time. Next. Speaker Moran, I'm. I think it says yarning. Last name starts with J. Your last name starts with M and Avery Kaufman. Come on down. Go ahead. Good afternoon. City council and staff. My name is Azazel Holmquist and I'm a district six member. District six resident of San Jose and a surge member. The people that suffer here and abroad need our support. And in a divest ice unethically and unlawfully detained incarcerated places, places like Saco continue to be at risk. The decision to divest matters. I know because I am a survivor of multiple traumas and aligning our values further to protect our undocumented immigrants is a must. Please do not listen to the rare occurrences in the news that are good and bad everywhere. Our decisions absolutely matter. Two months after our mayor criminalized our unhoused, so did Trump. Let's set a better example and hope others continue to follow suit. I'm here to demand the City council city San Jose show up for their most vulnerable residents by introducing and passing a much needed ethical investment policy today, which will divest city funds from companies with direct ties to Ice. San Jose is a sanctuary city, and we should reaffirm that. Thank you. That's your time. Next speaker. Hello, Council. My name is. Lori Katcher. I am a 23 year voter in D six and a member of Showing Up for Racial Justice. I urge you to support the memorandum from Council members Ortiz and Kamei to restrict new investments in companies that provide services to the US Immigration and Customs Enforcement. This is a reasonable and important step toward the city of San Jose, more fully divesting from corporations that do business with Ice, updating the city's investment policy and practices in this way is important to me as a taxpayer. As a longtime resident of San Jose and as a mother of three young adults. I work to practice to see all children in my own children, no matter who they are, what country they live in, where they're from, ethical investment means that we actually care and support all children. So I ask you to make this step. Thank you. Thank you. That's your time. Next speaker. Hello, my name is Janine. I live in San Jose in district ten. I urge the council to reject divestment. We're already in a deficit and cannot afford it and keep the city out of foreign affairs. I would like to also press on the hypocrisy. The groups promoting divestment claim the moral high ground. They tell us companies like Microsoft, Google and Amazon are evil because of their commercial ties to entities they don't like. But do they actually live by these rules and values? I would bet most of them use these companies on a daily basis using Google Search Android phones, Microsoft Windows Office at home and work, and getting their Amazon Prime packages. This is nothing but virtue signaling without the personal sacrifice. They want the moral win without any personal pain. In short, it's hypocrisy. Thank you. Thank you. Next speaker. Good afternoon. My name is Marwan. I'm a resident of San Jose. I grew up in Israel, lived there most of my life until the past year. And I'm here to encourage you to follow the decision that was very smartly made by this council many years ago, not to decide and to even discuss foreign policy matters. There is a lot that you cannot know from here about what's going on in Israel or anywhere else in the world, anywhere else. So many people here attempt to tell my story and they say it all wrong. So many details that are not being told about the war there. And I don't think this is the scope and the place to decide what is ethical and what is not. So many times in the past three years, I had to run for my life with my children. Thank you. That's your time. Next speaker, I'd like to call Rinat Anna, Jack and Shlomit Blum to come on down as well. Go ahead. Dear members of the City Council, I support the city staff's recommendation to reject adding companies to the divestment list. It violates the city's fiduciary duty to manage assets for the benefit of all residents, city staff estimates that divestment will cost the city up to $5 million annually in lost investment income. This results in significant service cuts when the city struggles with a $56 million deficit. I also support the long respected city resolution rejecting any action which on foreign policy, which divides the community and lies outside the city's scope and jurisdiction. Thank you. Thank you. Next speaker. Dear City Council members, my name is Yaron Marks. I live in San Jose in district nine. I am here to urge you not to accept Council Member Ortiz and Kamei divestment. I believe that this is a wolf in sheep's clothing. We already see what is the impact and for us as a minority here in San Jose, whenever that type of items are being brought up, we fear for our lives. We see our security being harmed. We need guards in schools and around synagogues, and we definitely need to prevent that. The city should focus on covering the deficit in our budget and not adding additional deficit as expected. We urge you to follow the financial team requirement or recommendation. Thank you very much. Thank you. Next speaker. Hello, I'm Jack from San Jose Against War, and I want to urge you to support an ethical investment policy. The question today is not whether or not Israel is committing genocide. The question is, will we be complicit in funding companies guilty of this genocide as much as some people would like to pretend it isn't? So, our local investments do have impacts across the globe. You can say it's none of our business when it isn't our investments here, killing people on the other side of the world. These companies alphabet, Amazon caterpillar Honeywell and Microsoft are integral to Israel's genocide. And while Israel does the killing, these companies make a killing. When these companies are held accountable for their war crimes when they go bankrupt, paying reparations for the damage they have done, what will that do to the stock market? What will that do for these investments? And is this the legacy that we want to leave for future generations? When we have budget shortfalls? Thank you. That's your time. Next speaker. Good afternoon. My name is Renata. I'm a longtime resident of San Jose in District nine. Council members. For those of you that are considering to vote for divestment, I have some tough, hard truths for you. We simply cannot afford this. We are already between 50 to $60 million in the red, and now you're entertaining an action that your own finance department estimates will reduce available funds by up to $5 $5 million annually. They called it untenable. And along the way, you are vilifying local companies that employ many San Jose residents and contribute to our tax base. And I bet that you, like everyone in the room, including the keffiyeh warriors here, all use products and services from these companies on a daily basis, let's be honest, do you really think that this action will move the needle on ISIS overreach? Very unlikely. You would simply be virtue signaling at the expense of San Jose's residents. Thank you. That's your time. Next speaker. Also, Sol Bloom, Maria Wong, Naomi Cohen and Philip, come on down. Go ahead. Hello, my name is Anna. Stepanenko and I. Am a long time local resident with family and friends in San Jose mostly in districts ten and one. I urge the council to reject any divestment policy. For my entire career, I worked at high tech companies. I'm a software engineer. Those companies have been an engine of progress, bringing wealth and jobs to Silicon Valley. And today, here in the heart of Silicon Valley, we hear the City council members calling for divestment from such companies. I have many friends working at Google and Amazon who are proud of their jobs. Most of the offices I worked in used Honeywell products. I see Caterpillar's machines all around improving our streets. I recently learned that the City Council several years ago divested from oil and gas companies. Well, Valerian has left California. Now Chevron is leaving. Who won? The residents certainly lost. Are you trying to make high tech companies like. Thank you. Next speaker. Good afternoon. My name is Shlomit Bloom. I'm a long time resident of San Jose. Let's ask a simple question who are the people behind the calls for BDS? Are these justice seekers who stood up against the atrocities in Syria? Did they call for boycotts against Sudan, Iran or Turkey? No, they did not, because this is not about human rights. It's about opportunity. There were waiting for a chance to target Jews and Israelis. Notice how they did not take to the streets to protest the massacre of Jewish lives. Instead, they mobilized for one thing a campaign of pure antisemitism. They are infiltrating our schools, our businesses, and harassing private individuals. Thank you. That's your time. Next speaker. Good afternoon, council members. My name is Maria Wong. I'm a community activist who spends most of my waking hours every week here in San Jose, seeing firsthand the issues that impact our daily lives. I want to urge the council to reject calls for divestment. Such action risks worsening the city's existing budget challenges and deepening the deficit, ultimately impacting essential services that residents and the greater community rely on every day at a time when resources are already stretched. We must prioritize fiscal responsibility and protect funding for core community needs. I also want to speak today about keeping our focus where it matters most, right here in our community. From my understanding the city has a long standing policy. First adopted in 1979 and reaffirmed in 2016 that the council should not take positions on matters of US foreign policy. That policy exists for a reason. It recognizes that international. Thank you. That's your time. Next speaker. Good afternoon, council members. I'm Naomi, a local resident, and I support city staff's recommendation to reject adding companies to the divestment list. As others have stated, the city is already operating at a significant deficit and cannot afford the millions of lost investment income. Divestment would violate the city's fiduciary rights to its residents fiduciary duty. Furthermore, the city has a long standing and long respected resolution to reject any action on foreign policy, which lies outside the city's scope and jurisdiction. Thank you for your consideration. Thank you. Next speaker, I'd also like to call drew see edit. Or maybe Edith. Lisa, Adhikari, and Yun. Come on down. Go ahead. Hello, city council and staff. My name is Philip. I'm an alumni of San Jose State and I now work in San Jose and an SEIU 521 steward. I want to echo what a number of community members have stated and emphasized the question, how do we show up for our most vulnerable community members in San Jose? We have investments in companies that have historically facilitated the ripping apart of families and killing of people at home and abroad. With alphabet having a partnership with Lockheed Martin to make their weapons more efficiently, as well as CBP to make their tactics of surveilling the border more deadly. Then there's Microsoft, who has supplied their Azure cloud software to the Israeli military to more efficiently track and Palestinians, commit war crimes against Palestinian men and women. When. When men, women and children. Microsoft is also enabling ISIS abductions and concentration camp operations that have killed innocent people. Keith Porter, Renee Good, Alex Preti and the rising number of people who have died. Thank you. That's your time. Next speaker. Good afternoon. Council members. My name is. Yigal Bloom and I've. Been a resident. Of San Jose for 37 years. I'm here. To remind this council that your primary duty is to ensure the well functioning services of the city. You should refrain from entangling yourself in complex international affairs or dictating how major US Corporation, which employs so many of our neighbors, conduct their businesses. Furthermore, I urge you, do not fall victim to this latest attempt of the BDS movement. The ultimate goal is to seize the existence of Israel as a Jewish nation's homeland and to eliminate any potential for a two state solution. Remember, BDS was founded in 2005, the same year Israel withdrew from Gaza, despite continued Israeli proposals to a two state solution at least until 2014. Thank you. That's your time. Next speaker. My name is Jose, and I'm here to call on the city council to support. The memo authored by council members Ortiz and Kamei. We have seen the city of San Jose demonstrate strong leadership in standing in solidarity with our immigrant community. Over the last year since Trump has escalated his attacks. And as these attacks continue to escalate, with American citizens being murdered in the streets by Ice and our own San Jose community members having a gun pulled on them by the manager of the ice office here in San Jose a couple weeks ago. It's time to put our money where our mouths are. Banning future investments in Amazon, Microsoft and Alphabet would have a minimal impact on the city's finances, but this impact would have an outsized result in standing with our immigrant neighbors and making sure that Ice isn't able to continue this reign of terror. Thank you. Thank you. Next speaker. Honorable council. San Jose's policy to reject. Foreign policy as a subject for. Council deliberation. Is just. It promotes the rights and welfare of all residents and is worthy of keeping. And all this talk about all these people addressing the agenda item today, pushing for divestment by examining corporate responsibility specifically checking relationships with Israel kind of makes me think about the creation of Pakistan. What does Pakistan have to do with anything? It was negotiated by the British between Muslim League demanding a separate homeland for Muslims and Indian National Congress reluctantly accepted to avoid civil war. So a huge country, Pakistan, was torn violently off of a bigger country, India. It was done in haste, but it was done. And now nobody is trying to undo Pakistan. They're lucky, the Jews. Thank you. Next speaker. Hello, San Jose. City Council. My name is. Lisa Adhikari. District three. America has been at war. 92% of our 250 year history. What does this say about us? The top three countries with proven oil reserves are Venezuela, Saudi Arabia and Iran. This year we adopted abducted Venezuela's democratically elected leader who was nationalizing their oil. What does this say about us, the US and Israel just started an illegal war of aggression with Iran and bombed an elementary school, killing 180 people, mainly schoolgirls, aged 7 to 12. What does this say about us? Stay objective and don't get involved in foreign affairs are ridiculous as excuses. At this moment. The US is a global superpower. What we do locally reverberates worldwide. That responsibility trumps objectivity. We ask for ethical investments that align with international and domestic law and reflect who we want to be. Thank you. Thank you. Next speaker, I'd also like to call David Tim Fan. Mila Kelly and Leila Salinas. Come on down. Go ahead. Good evening. My name is vital. I oppose this divestment proposal. As an Iranian American, I am deeply concerned by the conspiracy thinking surround this issue. And by the way, people who are not Iranian are using the Iran war to push on related local political agendas. We as Iranian Americans, appreciate President Trump's military intervention. This proposal does not improve public safety, does not strengthen city governance, and does not solve the problems it. Supporter claims it will solve. Please reject the divestment effort. Thank you. Thank you. Next speaker. The Genocide. Convention says that complicity in genocide is punishable. The convention holds that preventing and punishing acts of genocide is obligatory, not optional. Should any of the 153 parties to the convention pursue efforts to uphold their obligation, Microsoft, Amazon and other companies would face legal consequences for their complicity. If San Jose is not swayed by ethics when choosing its investment portfolio, it should consider the financial consequences of holding companies that will face legal liability or just market backlash. Backlash from investors or consumers. And an obvious question how can staff project a loss when they don't know what investments would replace Amazon, Microsoft, etc. in the portfolio and what those subsequent performance would be? There is opportunity cost to the city's choices when the city chooses to invest in profiteers of blood money. The city is also denying support to. Thank you. That's your time. Next speaker. Hello to. San Jose City Council and staff. My name is. Tim and I am an animation student in Sjsu. I, along with thousands more community members, demand our city to pass on an ethical investment policy that will permanently divest from corporations which take part in ISIS, illegal raids and illegal war in Iran and the Palestinian people. In three years, we have used our taxes to harass and destroy a people's race in their culture, when we could use it to fund our infrastructure and house the unhoused. Now Donald Trump wants to further threatened world peace with weapons of mass destruction. Today, Americans are unemployed and our cost of living is getting higher. Please find better ways to spend our money than on war and inflation. No more money to caterpillar, Honeywell alphabet Amazon or Microsoft. Thank you. Thank you. Next speaker. Hello, city Council. My name is Lila Salinas. I'm part of the community service organization San Jose, and I'm here to support the memo put forth by Council Member Ortiz and Kamei. There's been a lot of, you know, statements and questions about what the council members are supposed to do. Your job is to hear the voices of your people and meet their needs. Okay. Trump's administration is currently terrorizing many of the residents that are in your districts. San Jose is a city of immigrants. Over 40%. Okay, so what you do here today will not only reverberate within San Jose, but worldwide as well, and as well as Trump's administration. So you need to divest now. Thank you. Thank you. Next, speaker. Good afternoon. Council members. My name is Leila. I'm a San Jose resident, district nine, and I'm here to oppose the divestment from the industry. As a San Jose resident, I strongly oppose this approach. I believe it could have a negative impact on the city's budget by increasing its deficit significantly, and therefore have a direct effect on our residents. These businesses are an important pillar of the local economic and community framework, and I encourage the city to look for ways to strengthen the relationship with the industry rather than weaken it, and I'd personally be happy part be happy to be part of this partnership. I also believe that this divestment agenda is politically motivated, and I urge you to vote against it. The council's responsibility is to its residents, not to foreign affairs overseas. Therefore, I respectfully ask you to act in the best interest of your. Thank you. That's your time. Next speaker. Thank you. I'd also like to call Haim Cohen, Charlotte, Casey and Dash Leeds. Go ahead. My name. Is David. I'm a longtime resident of San Jose. I'm here to oppose additional divestment. In addition to the questionable use of divestment to achieve those aims, I want to would like to point out the similarities between those that would demonize our immigrant community and those that would demonize Israel, and by implication, much of the Jewish population in our city. Those who demonize the immigrant community see the natural flaws and imperfections and exaggerated to label them as murderers and and those that demonize Israel. See, it's obvious mistakes and imperfections and exaggerated to label it genocide. There are those that don't refuse to see the benefits of the immigrant community brings to our city. And there's those that refuse to see the benefits that Israel brings. Thank you. That's your time. Next speaker. Good afternoon. My name is Neila. I am. A university student, born and raised in San Jose, and I'm a resident of district three. Like many of my neighbors, I am here today to call on our city to divest from companies with ties to Ice, immigration, detention centers, prisons in the US and Israeli militaries. We know the ethical lines these corporations have crossed and will continue to cross. Some have manufactured weapons used to children in their classrooms. Others have supplied web infrastructure to Ice, and others have profited from mass incarceration, making the US incarceration rate fourth highest of any country in the world. We can't claim innocence or distance when we know our city's money is enabling these business practices, and the inhumanities that have resulted. San Jose's investments should promote the future we want to build because these investments truly do shape the course of future events. The Ortiz campaign memo is a necessary step towards an ethical investment policy. Thank you. Thank you. Next speaker. Thank you very much. My name is Aya.m Cohen, and I am a San Jose resident. The current divestment policy already costs San Jose nearly $500,000 annually, adding five more companies could increase that loss to ten fold to $5 million. I must caution the Council against using our investment policy as a tool for national or international politics. Doing so opens a Pandora's box. Once you begin, various groups will constantly pressure you to divest from whatever supposed evil they abhor, whether it's specific countries or companies. Who decides what is ethical? The council risks getting bogged down in endless political debates. Instead of focusing on managing our city by entertaining this divestment action, you invite special interests to turn our budget into a political battleground. Our investment policy must be based on sound, math, and fiscal stability, not a revolving door of political demands. This is your fiduciary responsibility to the. Town. Thank you. That's your time, Manny. Kelly. Lisa, should. Charpentier. And David River come on down. Go ahead. Good afternoon. My name is. Charlotte Casey, and I'm pleased and happy to be here on a day honoring Ernesto Galarza, who was such an important figure for social justice and fighting for the farm workers. And I urge you to maintain and preserve the beautiful piece of public art that's located along the Paseo de San Antonio that honors his memory. And in the spirit of social justice activism that he embodied, I urge you to adopt an investment policy that is ethical, that divests from the companies that are involved in terrible, horrific war crimes and suffering throughout the world. Thank you. Thank you. Next speaker. Hello. My name is Joshua Leads This city has already made significant investments to protect its residents from Ice, and it makes sense to be consistent with our existing actions by not investing in the companies that enable Ice. Otherwise, we're feeding the mouth that bites us. I think it's an incredibly local issue. It affects our friends and neighbors. The memo from Ortiz council members Ortiz and Kamei is a great start. I hope you consider it. Thank you. Thank you. Next speaker. Good afternoon. My name is Lisa Charpentier and I am a mom, a member of the California Donut Economics Coalition for For Common Good and a resident of downtown San Jose. Donut Economics views the purpose of the economy as human and ecological, thriving and meeting our needs within planetary limits. Therefore, the ethical foundation of our economy should be common good for all. Reciprocity, responsibility and our economic success metrics should be health equity, ecological stability resilience and ultimately thriving communities. So our financial investments have real life moral implications. Today, I urge you to stand firmly on the side of peace, justice, and human dignity and show that San Jose is against genocide and human rights abuses. And as we invest to strengthen flourishing within our city, we must remain mindful that as a sanctuary city, our moral compass. Thank you. That's your time. Next, speaker, I'd also like to call Florence Anderson, Cheryl Lynn Chris Bedford, and Jeff W. Come on down. Go ahead. My name is David River. I am from Caracas, Venezuela. I work in San Jose. I oppose this diversity Policy Which is missguided you are people talking about Rights. Should San Jose divest from Mexico and China? Let's talk about justice, about the drug trafficking problem and all the the drug deaths all over the US in San Jose. Included should the US should San Jose divest from El Salvador. Russia. Ukraine. Iran. This is a ridiculous policy. It is designed to hurt one country and one people. And it is a fake. Attempt to defend human rights. Thank you. Thank you. Next speaker. Good afternoon. My name is Mani Baker, and I'm a high school junior from downtown San Jose. I'm primarily an advocate of climate action, but I'm here today in solidarity with human rights activists, urging you to work towards an ethical investment policy that divests city dollars from corporations that work with Ice. The military of Israel or any other military responsible for repeated war crimes. There is no. And I think councilmembers Ortiz and Kamei for their memo as an important step towards this. There is no more urgent duty of a government than to protect children and to build a safe future for us right now. Ice and other federal agencies are abducting children, separating them from their families, sending thousands of them, sending them thousands of miles away and locking them up for months in horrific conditions that are sometimes deadly. The Israeli military has also killed thousands of children in Gaza and continues to do so despite the ceasefire. Please divest from these companies as quickly as is possible. Thank you. That's your time. Next speaker. Hello, city council. My name is Florence Anderson. I'm a mother and oncology nurse in district two. Ethical investment is the least we can do. And one of the best ways to take nonviolent action toward justice and humanity. No amount of money is worth the blood of innocent people or the stability of our climate. Other Bay area cities like Dublin and Albany, along with Alameda County, have already taken the courageous step of passing an ethical investment policy. I'm calling on San Jose to divest from caterpillar, alphabet Microsoft Honeywell and Amazon, which directly facilitate ISIS terror against our fellow humans. These investments amount to around 4% of San Jose's investment portfolio. Can we really not think of a better way to invest that 4%? There are alternatives that I urge you to explore. I, along with over 2300 other people, have signed a petition demanding that divest all city funds from Israel's genocide against Palestine. Over 50 community organizations, nonprofits and small businesses have endorsed the petition as well. The banality of evil is the idea that great atrocities are often committed not by fanatical. Next speaker. Hello, my name is Jeff. I'm a long time resident of San Jose and representing the Jewish Democratic Coalition of the Bay area. The. I hope all of you read the wonderful memoranda presented to you by the finance people. Five losing income of 3 to $5 million per year every year. I'm wondering, what services will you cut? And the only thing that the finance people found was a $600,000 contract from Microsoft with Ice. This proposition is a Trojan horse. It's divisive. And are you going to restrict citizens from working for the companies facing divestment? What are you going to lose? What are you going to gain? I think you're going to lose a lot more than you're going to gain. Thank you. Thank you. Next speaker, I'd also like to call Inga, Greg, Maddie and Amina Ortiz. Come on down. Go ahead. Yeah. My name is Cheryl Lynn, and I come here to to support the memorandum of Peter Ortiz and, and Rosemary Kamei to to divest from and, you know, not invest in these companies that that are complicit with Ice and, and with genocide. I want you to think of this as a, as a purely domestic issue that that Ice, you know, impacts our local residents. And that's why it's important for the city to, to take a position defending our, our local residents and the connection, the connection to Israel, apart from its genocide is, is that it actually trains ice. So it has a direct role in the kind of, of tactics that that Ice uses. So please approve the memorandum and divest from. Human rights violations. Thank you. Thank you. Next speaker. My name is Chris Bedford, and the gentleman just gave me a great segue regarding the training that the Israeli occupation forces provide ice and how to be more brutal, how to brutalize our immigrant communities, and how to shoot non-immigrants in the face. I'm really horrified by that. My background is Mexican, American and Jewish and my wife's Filipino, so I have a strong connection with immigrant communities. And obviously I have a strong connection with Judaism, which is like the background of my family. And I want to urge you guys on the council, please don't fall for the argument that any criticism of of Israel is anti-Semitic. The rabbi that I follow, Rabbi Yaakov Shapiro, will tell you, encourage people to look at him and hear his message that Zionism is identity theft. It's theft of Jewish identity. And by aligning ourselves with genocide. Jewish community. I think that makes. Thank you. That's your time. I'd also like to call Marcel to come on down. Hello, I'm from the Central Atlantico, and I want to thank you for recognizing Ernesto Galarza, who is one of our most honorable men that defended our workers And I hope that you continue to support Ernesto Galarza for his contribution to the defense of undocumented people especially. I also want to thank our Councilman, Ortiz and Kamei for the for the proposal that they have made in regards to the divestment on Ice and also. Recognizing that all these corporations are responsible for the genocide of our our children that have been locked, that have been kidnaped from Ice. And we have. Thank you. That's your time. Next. Speaker. I'm sorry. That's your time. Hello, city council and staff. My name is Marcel and I am a community member of San Jose. I am here to demand the city of San Jose to show up for the most vulnerable residents by introducing and passing a much needed ethical investment policy today, which will divest city funds from companies with direct ties to Ice. I see this as an educator for the people in San Jose. I say this as a surrogate father to the people in San Jose. My ties to the immigrant community are vast. San Jose is a sanctuary city, and we should reaffirm this by divesting and barring any future investment into companies such as alphabet, Microsoft, and Amazon who have. Who have. With contracts with Ice and other deportation operations. I'm here to demand. I'm sorry. That's your time. Next speaker. Also, I've called all of the cards that had names written on them. If you did not hear your name, please line up. And if you had submitted an anonymous card, please line up. Thank you. Go ahead. Hello. The groups promoting divestment claim the moral high ground. They tell us companies like Microsoft, Google and Amazon are evil because of their commercial ties to entities they don't like. But do they actually live by those values? I bet most of the youth, most of them use their companies on a daily basis using Google Search on their Google Android phones and Microsoft Windows office at work and getting their Amazon Prime packages. This is a virtue signaling without the personal sacrifice they want the moral win without any of the personal pain. In short of hypocrisy. And I think this call for divestment opens also the door for hostilities. Further hostilities against Jewish community claiming it all in is done in the name of peace. But it isn't. It actually hostility. Thank you. Next speaker. Good afternoon, City Council member. My name is Greg, a resident of D eight, and I'm here to call for an ethical investment policy and divestment from this current policy initiative that is being taken. We want to be able, as San Jose, to know that we can divest from companies that are complicit with ICE's terror operations nationwide. This city council already voted for the public for public spaces that are owned by city property, to not be used by Ice. The mayor and city council's memo outlines a policy alternative into US Treasury bonds. I think it's a wise decision that the City Council can use, and it should be further researched with different resources available. Funding software companies like alphabet, Microsoft and Palantir purposely designed facial recognition software, and they aligned themselves with Customs and Border Patrol, which could possibly be used by our flock cameras that we have funding. This private prison sector is also something that we don't want to be initiative of. Thank you very much. Thank you. Next speaker. Hello, city Council and staff. My name is Megan and resident of D nine. I am here to demand that the San Jose City Council pass an ethical investment policy today that permanently divests from companies complicit in ISIS terror operations nationwide. The city currently has 15 million invested in alphabet, whose subsidiary Google is integral to Ice detention and deportation operations, and which has direct contract with Lockheed Martin and Customs and Border Protection supplying AI and technology to the US Mexico border. The city also currently has 12 million invested in Microsoft, which for years has maintained secretive, ongoing and increasing business relations with Ice. The city also has 31 million invested in Amazon, which provides crucial technology to Ice, CBP and DHS, which they use to track, monitor and deport immigrants. Our neighbors. We must not be complicit in Trump's terrorization of our immigrant neighbors. Please divest. Thank you. Thank you. Next speaker. Hi, my name is Serena Mica. I'm from district six. I'm a biologist, and I want everyone to have a healthy and livable future. Calling on San Jose to divest from companies which directly facilitate ISIS terror against our immigrant neighbors and the U.S. war machine, and intensify the climate crisis in 2020, city of San Jose aligned with its constituents values and chose to amend City Council investment policies so that the city would make direct investments in entities that directly engage in exploration, production and refining or marketing of fossil fuels. The precedent has been set letting justice and equity guide investment decisions. Not only do armed conflict inflict humanitarian and economic damage, but environmental damage, intensifying the climate crisis and biodiversity crisis. Please divest. Thank you. Thank you. Next speaker. So first of all, my name is Jose Reyes. And under the Constitution, you guys, the committee cannot put any regulations saying so. The time limit did not count as against our rights. You guys are here to actually listen to us. So under the Constitution, you guys are breaking the law. I need you to go on topic. Topic is. Investment policy. Or the policy. Yeah. The topic is the investment policy. So if that's the topic then I'll be back with my lawyer. So to make sure that you guys listen. Thank you. Have a wonderful day. Thank you. That was the last speaker back to council. This my microphone. I'll have to hold the button down I guess. Thank you everyone for being here for your comments, for the respectful input to the council. Just to set the stage. I want to turn it over for Maria for a second to just make sure we understand the underlying staff recommendation, which I think has important and important element that that is expected. That has to move forward today. And I want to understand, just give a little explanation of what what the underlying motion is and its importance. Apparently I have issues with microphone two. What we need council's approval for today is to approve the updated City of San Jose investment policy. As you have before you. It's been referred a couple of times. It might not be in your full package, but basically the updates we have made to the policy right now is just an updated primary dealer list. Those are the companies or the dealers from whom we can buy securities in our investment. And it is an annual requirement for the council to adopt the investment policy. So that's the one thing you need to do today. Okay. Thank you. So so adopting the investment policy and accepting the staff investment report is the underlying recommendation. Now I'll turn to my colleagues. Councilmember Ortiz goes first. Thank you, Councilmember Cohen. I also want to thank everyone who's coming out here today to share your your input, regardless of the position in which you you hold. I truly appreciate everyone here speaking freely and just our personal truth. And I say that realizing that, you know, the memo that myself and Council Member Kamei have introduced doesn't necessarily do anything that was asked of us today by by the individuals. It's essentially a third, a third option. We're not motioning to divest from Israel or for getting involved with foreign countries. And what we aren't necessarily divesting at all what we're what we're hoping to do is to allow our current investments to mature and cease divesting in Ice in the future, so that we can make sure we are continuing this council's track record of defending our immigrant community and ensuring that our city's financial decisions reflect our commitment to protecting them. Today's vote is about holding companies accountable. While we understand that companies can choose who they do business with, when those choices involve profiting from terrorizing our residents, there should be consequences. As the City Council, we represent the values of San Jose. We've been clear both locally and in support of state legislation, that we do not support Ice and we don't support companies that profit off of collaboration with Ice, who we invest in needs to reflect that same level of commitment. This memo is about the reality we are all seeing every day, especially in my district. Families being separated, children torn away from their families, children being used as pawns in order to target their parents, women being sexually assaulted, women testing positive for being pregnant as they're being detained when no one else other than Ice officers and Border Patrol patrol would be the ones to. Cause that act. You know, not just in our words. We need to make sure that we're advocating for our immigrant community in our in our actions. And we cannot say we stand with immigrants while continuing to invest public dollars in companies that benefit from their suffering. It has given me great pride to see this council rally around our immigrant community. And this is about continuing that work and that work solely. We have taken strong positions to protect our residents from Ice. We've been leaders in the county and in the state and honestly, in the nation. Today is our opportunity to make history again by being the first municipality in this country to stop investing in Ice. And so I know that there are concerns about potential budget impacts. And so I just wanted to ask Maria, I know that, you know, this is not necessarily the same act that we're doing, but as mentioned by speakers, there have been other municipalities and counties that have divested. Has there been any sort of reports? And obviously we're doing Ice, not Israel. Has there been any reports of negative consequences from those decisions? I honestly cannot say. Council member. I have not read anything on any of those cities what their financial impact has been. I would assume, however, they had what we would if we were to stop investing in these companies. There is the opportunity cost loss. We know that these companies trade at a spread over treasuries. They are currently the most safe investments we have, so have the lowest investment yield. And corporates obviously take on a little bit more risk on that. So there is a premium on top of the Treasury yield. It can be anywhere depending on the company and the day. You know we look the other day we we looked at three companies and they were about 55 basis points higher than the US Treasury. So from that standpoint, from not investing in that corporate, you would lose out on that premium on your investment yield. So from that aspect it is a negative impact but it's not a loss. So these three companies are the only ones that are presenting this level of return. No no no no. Those were just an analysis we did earlier this week. So that's just an example. But they do trade at a spread over Treasury. Thank you. That's pretty much proves my point. There's no shortage of reputable high performing options that do not profit from immigration enforcement, that do not profit on terrorizing our kids, on terrorizing our families, individuals who we have sworn to defend. And so the city of San Jose does not need to rely on profits tied to companies supporting terror in our very own neighborhoods. And so with that, I'd like to make a motion to move the memo signed by council Member Kumar and myself. Thank you. Sorry, I forgot because I'm not usually in this position. Thank you. Councilmember Ortiz. Okay, now returning to Councilmember Kamei. Thank you so much. And I want to thank everyone who came out to speak today as well as we certainly have gotten a lot of emails and different messages on your different perspectives. I want to thank city staff, especially for going above and beyond all of the information. I had specifically thought that it was just looking at the financial situation in terms of what it would cost us. So I know you provided a lot of information above what you know, I had requested. So I want to say thank you so much for the information. My understanding is that we are really focusing on what is local and what affects our community here. So I want to kind of separate a little bit about the, you know, geopolitical and all of that. There are a lot of things that were not able to, to move forward on in terms of looking at our own council policy. Zero dash 11. And so, you know, I think that the memo that Council Member Ortiz and I have put forward really follows a lot of the work that we have already done in terms of looking at what Ice has done to our local community. And so our recommendation specifically responds to businesses with Ice and whether it's direct contact or third party services arrangements, I think that it is at the local level and not at the foreign affairs level. Scenario two in the in the memo that was presented by staff is the most responsible option before us because it limits future investment. It doesn't just cut it off right, right now and allows for thinking about putting those investments. Not that they're going to go to zero, but those investments into other other entities. So I therefore support the motion on the floor and look forward to the discussion of my colleagues. And I had a question to for the for the our council in terms of because we have a few missing members here, we still need six votes for anything that is moved forward. Correct? Correct. Council. You need a majority of the absent. Right. That's correct. Okay. I just wanted clarification. On that so that we can know that. All right. Thank you. Thank you. Councilmember. Next is Councilmember Casey. Thank you. I guess Interim Mayor Cohen. So my challenge is on a policy level. I appreciate my colleagues and their memo, but I don't think it's sound policy. It's an unstructured directive, a sound policy requires clear definitions and objective criteria. Consistent application rules and administrative feasibility. And this memo lacks all four. It lacks definitional clarity because we don't know what's necessarily being regulated. The memo hinges on companies that have, quote, ties to Ice, but never defines what qualifies as a tie, whether indirect relationships count, whether scale or materiality matters. Without definitions, this policy has no clear scope. That means staff can't reliably determine who is in compliance and who is out of compliance. This is not the hallmark of a operational policy. It also lacks decision rules. How is it applied? Real policy answers what triggers action? This memo does not specify a threshold, for example, percentage of revenue or contract size. It doesn't have a standard of evidence. We basically, I guess, quoted a Forbes article. If that's the litmus test from now on, moving forward, as long as the company appears in some article that we don't like, we're not going to invest in them. And there's no consistent evaluation method. So instead, it relies on a case by case interpretation, and that transforms policy into a discretionary judgment call, not a rule based system, which is the opposite of how investment governance is supposed to function. It also lacks internal consistency. Why these companies? The memo targets a small set of companies, but many companies have federal contracts. Many industries intersect with immigration enforcement. The memo provides no principle explaining why these companies and not others are included. This creates a selective application without a limiting principle. This is not a policy. It's an ad hoc selection. Now to administrative feasibility. A policy must be implemented by staff here. Implementation would require continuous monitoring of global corporate relations, interpreting indirect and evolving contracts, making subjective determinations without. With incomplete data. The Finance Department already indicates that this type of screening in their memo would be untenable. To administer a policy that cannot be consistently administered is functionally not a policy. It also conflicts with the structure of our existing framework. The city's investment policy is rules based, quantitative, and designed for consistency and auditability. This memo introduces qualitative undefined criteria, subjective interpretation and open ended scope. This is not an amendment, it's a departure from the policy model itself. So the bottom line in terms of the memo, this is not just controversial. It fails to meet the basic test of what a policy is. It's undefined in scope, unclear and application selective and targeting unworkable in practice, which means it cannot be applied consistently enforced fairly or defended administratively. So just a couple questions for you. Now, Maria, can you implement this policy. As written in the memo? No, that would be difficult. I don't have enough staff or resources in general to know everyone. As many speakers today highlighted, corporate law is complex and the way companies set up affiliates, subsidiaries, branches, how they cooperate with others, it becomes very difficult for us to follow that tangled web in a timely manner, and we do tend to make our investment decisions relatively quickly because companies come on the market only so many hours of a day, and you kind of have to be quick and ready with your analysis to be able to execute. I would like to just highlight, because I think many people misunderstand what types of investments we are buying. We're not buying stock. So our buying and selling of these investments do not impact the stock price. We only buy the bonds and we buy them 99% of the time in the secondary market, which means we're not actually sending our money, the city's money, to these companies. We are paying the former holder of the bonds the money, so that we can take them in our portfolio. And likewise, when we divest, we don't hand them back to the company itself and demand their money back. We actually sell them to another investor. So when we buy and sell these bonds, they're not actually noticed by the issuing corporation. Just as when we issue our own bonds, we issue them to the initial bond holders and then they trade them on the secondary market. So most of these were issued years and years and years ago. We can only buy five years. And in most companies just like us issue 2535 year bonds. So, you know, these holdings, the money was spent years before they became an issue. So managing these and monitoring these to see what bonds are actually currently in the political headwinds is very difficult for us. That is the privilege of being an administrative professional. I focus only on the financial facts. I don't pay much attention to the qualitative stuff. That's for council as a policy to. Do so. With. The implementation of this policy prevents you from further investing in corporate bonds. I think that is where we're heading. The more we set parameters that are difficult to administer, the easiest thing for us would be to close down the corporate bonds program, keep them if council allows, until they mature, but not make any further investments. And based on your memo, I think in 2024 and 2025, 22 million of the 95 million that we earned were from these corporate bonds. That is correct. Now, the universe of these premium, these bonds that pay the premium, these highly rated bonds. To Councilmember Ortiz's point, he was saying you basically could switch them out. It is a small universe. It is a small universe. It's doable to a certain extent. There is about 29 names that we can trade in. 24 we already hold investments with our policy limits. How much in each name we can go. So we would come up to a capacity issue. You know, if we have 45 million already in one bond and that we need to invest 10 million, and that's the only name available, we could go 5 million in that. And then we would put 5 million in a lower yielding probably US Treasury or agency bond. So this policy would make it prohibitive for you to move forward. It also would shrink the universe with this go around. And I would imagine subsequent issues that pop up in the newspaper would shrink that universe till it's non-existent. At some point. Potentially. I guess I'll just close a policy without definitions, standards, or a way to implement isn't really a policy. It's a direction to make ad hoc decisions. And that's not how public funds should be managed. And staff has warned us that a policy like this cannot be applied coherently. A corporate the corporate bond program that we have would be untenable and we'd no longer invest in them. So this is not just a question of values. It's a question of whether we adopt a policy that cannot function. And in doing so, put a significant portion of the city's revenue at risk. I again in. It's been mentioned here a few times. We're at $56 million budget deficit right now. $5 million annually, and potentially 22 of 95,000,000 in 1 year. None of us are going to want to make the cuts that that's going to require. So for that reason, I'm going to offer a substitute motion to go ahead and accept staff's motion. Okay, so we have a substitute motion on the floor to accept staff's recommendation. And next in line is Councilmember Candelas. Thank you. No, I just wanted to take a moment to thank all the speakers who came and, you know, voiced voiced their opinion. I mean, this is this is a forum that I believe, you know, we can have an open, candid discussion and hear from folks, you know, who, who may not agree with us and, and even the dialog on the dais today. I want to thank my council colleagues for their leadership and, and in discussing and, and introducing, you know, an alternative and having the administration come back to us with an alternative. And, you know, I think, you know, as a, as a son of immigrants and as somebody who's family, you know, suffers that same, that same fear that a lot in our community are experiencing, given the actions of the federal administration. And, you know, you know, the things we've seen, not just on social media, but in on television and, and everywhere else, it's, it's scary and it's, and it's not, it's not something that, you know, it's not a fun time to not just to be in elected, but to, to be a San Jose because of what we're seeing on the streets of Minneapolis, LA. Even here in our, in our own backyard. But the, the question I have for staff is we have a social responsibility component as part of our investment policy. Can you please talk a little bit about that? And, and, you know, I have a follow up question afterwards. And good afternoon Council member. Yes, we do have social responsibility. Clausing our investment policy. We will exercise that clause when when like kind what similar kind of securities come into play and if they are priced the same of the same credit quality or evaluated social responsibility social responsibility, socially socially responsible investment scope when we make the final selection. Great. So, Maria, can you articulate how we can define certain companies that support well-being through safe and environmentally sound practices and fair labor practices? ET cetera. And we, we we can't necessarily implement the policy that the language was provided by the administration. Can you articulate that? I think the intent of the memo is good, right? It says, let's not invest in these right now. I think we would need is a little bit more guidance. Is it just these three companies or is it anything if they have subsidiary affiliates or they partner with something else? How long is this ban active? How do we reenact it? Do I bring back to council a we think it's time to reenact or we allow investment in these. I think we'd like a little bit more meat around it. Right. Okay. Follow up question. And so the recommendation was when they mature, do not reinvest or, you know, invest additional funds. Can you can you, can you when, when do most of those funds mature for the audience? I saw it in the memo. It's 2027. I believe so, correct. Right. And so, you know, given that we review this policy every year, correct. What would it make sense from an administrative perspective to maybe you know, find a, an area where we can explore the, the fleshing out some of the administrative implementation details that I believe Council Member Casey is asking for, while also recognizing that, you know, this is this is also important for, you know, for, for a values conversation because just a few years ago, we, we implemented the no direct investments and entities that directly engage in exploration, production, refining and marketing of fossil fuels as part of our social responsibility policy. So can, can how can, how you know, and I'll look to the administration, how can we, you know, move forward with a policy that that doesn't put us in a, in a, in a bad fiscal position this year when we have to figure out how we solve for that $56 million deficit or next year. But when we have to make the decision on when we actually reap the benefits of the maturity of some of our investments to to be able to find some middle ground. And I would, you know, I would be open to suggesting a friendly amendment that would try to, you know, provide the administration that flexibility while granting, you know, the spirit of to to which I think the council member, council member Ortiz and Kamei are are trying to, to instill as part of this policy. And, you know, I guess I can I can think about massaging the language a little bit, but just curious about the administration's perspective. Jennifer. On, on the implementation or maybe language that we can possibly implement, not necessarily this year, because I mean, even, I mean, most of the funds have mature next year and the the reinvestment or the, the, the alternative pathways are after the maturity. That's, that's what's in the alternative proposed. I think I need a little bit more time to really sit and think through how that would work. The fossil fuels was easier. That was the segment of a certain specific segment and incorporates all companies within that segment. So what we're dealing with here, depending on how you want to analyze these companies, Amazon is retail. You have one that's high tech, two actually that are high tech. So it's a little difficult to generalize off the top of my head here. Okay. I mean, I just, you know, looking at previous direction as instructed by PCs or the public safety finance and Strategic Support committee, there was a direction to the review to review the investment holdings in certain corporate notes and investments with ties to US Immigration and Customs Enforcement and provide policy guidance to the administration. And and, you know I saw the I saw the supplemental memorandum on Friday. And and, you know, I appreciate my council colleagues effort to try to, you know, figure out a pathway forward. So I. Yeah, that's it for now. And I'll wait to hear from the rest of my colleagues before I offer up a friendly amendment. Thank you. Okay. Thank you. Councilmember Ortiz. So I just want to be very intentional with the direction of this memo. So I'll read the direction, direct the city manager to implement alternative scenario two identified in March 20th 2026. Supplemental memorandum by allowing existing investments in alphabet Amazon and Microsoft to mature, which means not divest while prohibiting any new investments in these three in these companies and a lot of community concerns regarding certain business relationships with Ice, and to return Council with any necessary updates to city's investment policy. So I've probably you know, I'm not bragging about this, but I probably have introduced more memos than almost anyone on this city council. Time and time again, when I hear from staff all the times, it's direct staff to come up with a strategy and they come back with that recommendation. This is the first time I've ever been told, oh, there's not enough information here. You're not being too specific. I don't know how more specific I can be with by naming the three companies that I'm talking about. And so I just it's very frustrating to hear this type of information. And, you know, I don't I don't feel like the city of San Jose is really going to miss out on $5 million. I feel like what happened in Oakland, in the county of Alameda, we haven't heard any sort of financial impacts from those type of things. And I'm surprised, honestly, that the administration didn't reach out to those cities to make sure that the facts that they're putting in the memo are founded on actual facts and not misinformation. And so, you know, this Ice may not be a big deal to some people on this dais. I am hearing from my constituents who are being terrorized every day from Ice. I take this very personally. Some people may be okay with the city of San Jose having blood money on their hands. I'm not. All right. Let me ask, can I ask a clarifying question? I want to ask a clarifying question. You I heard you talking about we're buying specific company bonds. Is that right? So so it would be a a alphabet bond. But then you were talking about sectors. So are we buying sector bonds or are we buying individual bonds? Sorry. I'm at the industry sector fossil fuels. That's an entire sector. So we're not cherry picking within that sector, you know, so that no one can come back to us after saying, why are you picking one company to punish and not the other one? So sectors are easier than one here in retail, one on the high tech. But but when we actually are investing money, we're investing in the individual individual companies. Correct. And the bonds held. And as you pointed out though, we're not investing in the company directly. We're investing in in a in a bond that the lender has is holding over. We're investing in the note that the corporation holds. We're just not dealing directly with the company when we purchase it. We purchase it on the secondary market, which is other investors. Thank you for the clarification. Back to Council Member Casey. So I take exception to council member's Ortiz allegation that we don't care about Ice, and unless we care about Ice, we're going to support the memo. I think pardon my language. That's. The reality is the three companies you've outlined, there's been no evidence based evaluation of whether or not these companies are tied to Ice or not. You've your memo quotes a Forbes article. So all we're going to do is every time an article comes out about a company that might be involved in something we don't like, suddenly we're not going to invest in that company. That is not the type of standard we should be holding ourselves to. It should be much more difficult for us to decide to do something like this, just willy nilly, ad hoc, arbitrarily divesting from companies that we don't like because they appeared in a newspaper article. I mean, that's ridiculous. It's not divestment. All right? No longer invest. In a company based on hearsay because you're hearing from the community a company is doing something and then you read about it in an article when we. All right, let's let's move on to the next comment. Councilmember Candelas. Thank you. You know, I think I mean, I guess my question for the administration is what kind of further analysis would you need and what could you bring back to the council in order for us next year as part of the investment policy, to be able to to make a more, I guess, informed decision, if you will, based on, on on the administration's feedback, well, I mean, I guess I would say asking more for more analysis next year. I mean, how, how would you, how would you, how would you help us come back to be better informed in the next year? I don't know that there is more analysis I can do than we did. For example, for these companies in the supplemental memo, we are not set up to be a portfolio that actively trades securities, meaning we buy and sell when we see arbitrage opportunities in the market, we are a buy to hold investment portfolio only. We look at the financials of these companies. We are very restricted by government code, further restricted by our policy as to what we can invest in based on credit quality. So for us, it's still it's going to be more do we continue your delegation of authority? To me and my staff to invest in corporate notes, or would you prefer that we do not invest in corporate notes because these things will come up. They have several times over the past history. There's always an opinion about a company or a company. These are multibillion dollar multinational companies. We only invest in the US domiciled notes only for projects issued here in the United States. We do not invest in the affiliates around the globe. Still, these large companies tend to end up in trouble for one thing or another. If it's not labor issues, it's they sell tools to an investor or someone who buys the tool and uses it for a purpose that it was not intended by the company. It becomes very difficult for staff to keep track of that. So from an administrative perspective, I feel it's a little bit more all or nothing. Either we invest in corporate bonds or we do not. Got it. Okay. Would you suggest maybe an update to our social responsibility policy to, to kind of create, create those guardrails in that framework to provide as much guidance and, and, and I guess black and white. Language that would, that would give the administration, you know, their, their, their directives. I think the social responsibility language in the policy as it stands, is as good as we're going to get it. It is restrictive enough, but also flexible enough. It does not go into details on certain foreign policies. And again, I think that was a conscious decision by council back when that was added. I was not here at the time. I do not know exactly how those discussions went. Got it. Thank you. Okay, we're turning to council member Mulcahy. Now. Thank you. Council member. First of all, to recognize the conviction of all of our speakers who were here today. Thank you. I also want to thank Maria and your team. In a year when we're scrutinizing every program, every position, every procedure to maintain core city services, your work is essential. So thank you. But that's our context right? And it's unwise to pursue financial choices that knowingly weakens our fiscal resilience and impacts the general fund. Some have argued that our investments should reflect our community values. It's worth noting our own adopted policies already make clear what those values are in this arena. Our core values call on us to demonstrate fiscal responsibility. Our investment policy puts safety and liquidity first, ahead of yield, precisely to safeguard public funds and our budget commitments. Emphasize fiscal sustainability and cost effective service delivery as guiding principles. Using our investment portfolio to take positions on international conflicts would substitute symbolic geopolitics for the very fiscal responsibility we say is core value of this organization. The companies at issue, Microsoft Amazon alphabet employ thousands of San Jose and Bay area residents and support countless local organizations and events. In Microsoft's case, roughly $600,000 out of more than $280 billion in 2025. Sales were tied to DHS, about 0.00214% of its revenue, well under 1,000th of 1%. business. I wanted to ask, Is Jim Shannon in the room? Jim, so sorry. We've fired a few at Maria on the finance side of the equation, but maybe we can talk a little bit about if you and your team have modeled anything around, if the divestment were to occur, what impact that may have on our city budget. And I know you look at our city budget over a period of years. Yeah. Thank you for the question. Councilmember Jim Shannon, City's budget director. We haven't done any specific modeling on this. I think the supplemental memo that the finance Department put out had talked about, you know, the impact of the corporate bond program or the corporate note program going away would be a 3 to $5 million range that's across all of our city funds. So, you know, we the finance department is investing on behalf of all of the various city funds that are out there. So not only the general fund, but the rate the ratepayer funds that we have, all of those are revenues that we reinvest and then provide for services. I think the general fund is is the largest single fund, but I think the the proportion share there is probably somewhere around the 16% range of, of the proceeds that that come back from that. But as we're going through and going through the budget development process, you know, every, every reduction matters. We are we are arm wrestling right now over various budget proposals for, for, you know, even not very large amounts, but that's going to be an impact. I mean, as an example, I think one of the reductions last year was the reductions to the senior Health and Wellness Benefits Grant program which was around $500,000 deduction, which is, you know, probably within the range of potential impact of a 3 to $5 million overall corporate note reduction proportionally to the general fund. If that gives some context. So, Jim, I would think that this would maybe come through you eventually. But do you have any sense of what kind of funds we're spending with Microsoft as a city today? I don't know, it's. An on the spot question. My apologies. I don't know if that was. Did we is there something mentioned there in the memo, Maria? I thought we did. Let me pull it up. On Microsoft. Let's see. Yeah, this is. I'll have you read it because clearly I can't. I think we're okay. I think this is. I think it's okay. I don't want to be belaboring the search. Thank you, Jim, very much. I appreciate it. So I'll just finish with I think our choices here today will have little to no impact on today's complex conflicts. But as we have heard from our trusted advisors today, divestment will have real material consequences to our residents. It's for these reasons I'm supporting the substitute motion on the floor to support staff's recommendation. Thank you. Councilmember. Thank you. Councilmember Kamei, you're next. Thank you so much. I wanted to get a little bit of a understanding. It sounded like it was either you have a corporate bond program or you don't at all. Is that correct? Because to me, you know, like I've not been in the business of your having your shoes. And so, you know, I, I thought that perhaps we would allow some time to be able to figure out, oh, if you have a, a, a group of, of corporate bonds and these are the ones that, you know, we didn't want to invest in, let's say hypothetically, right? That the package of corporate bonds would be some other corporations as opposed to including these items. But you're saying that it's either all of it or is that the way it's sold to us that this is the package? And as a package, it's all or nothing. I'm just trying to understand. No, I think I may have been unclear. It is difficult to administer these. As it is. They are not on the market all the time. So it's not like these 29 names that meet the government code and our policy requirements. They're not in the market all the time, again, because we're not buying them directly from the issuer. We're buying them secondary market. So if we start putting restrictions so that, you know, Microsoft, the parent company that we are holding, are not the ones doing atrocities across the globe. staff to administer and keeping up on foreign policy. But we're not. We're not talking about that. We're talking about specifically, just not we are specifically in our memo. We specifically mentioned US Immigration and Customs Enforcement. And and we deferred. This is not divestment. I mean, a lot of people have thrown the word divestment, but this is not this was thought to be a thoughtful way where we're able to take a look at going in this direction. And then I think Council Member Casey is correct. We didn't. Perhaps that's our fault. We didn't have the the exact details. So I agree with you there. But we had asked for that to come back to us to operationalize this direction. So what I'm asking is, okay, so when we're buying these bonds, do they come in as a package of different, you know, and I know that we buy them on the secondary market. I know that we don't have them all the time. But you know, in terms of if there's one that comes up that says Microsoft, well then maybe we don't want to go there. Maybe we want to go somewhere else. So I just, I just am wondering, is it, is it a package of corporations that we have to go with or what it is? Because you mentioned that there are. 24. Is that correct? We have 24 right now. We have 29. So. So there are. There are others that there are. 21 others that we invest in. So I'm just wondering, you know, if it's not as a package, it's not like all or nothing. anything like that. We're looking at specifically Ice. Now, if things happen to turn around and things don't, you know, are in a better direction, where our own local residents are not being terrorized, then I could understand saying, okay, well, maybe, you know, Ice is doing something better, I don't know. But right now, you know, the policy that we want to set forward is really to look at, you know, they're doing some bad things and that needs to change. So the, the difficult thing for us when we ran our holdings, our corporate holdings last week to compare against what the US government shows as companies having Ice contracts, the only one that showed up was Microsoft. So the other two must be showing up through some subsidiary. And that's where I'm saying that's where we're going to have a very difficult time as staff. I have for investment staff. That's where it becomes very burdensome on staff to really figure out. Is this company somehow involved in other areas that we don't know? I see. That's the administrative burden. And these bonds are, in most cases, general purpose bonds. So they're not always dedicated. Be honest. The fossil fuel companies were easier because they were very much this is for a certain plant or this is for a hydro plant. But these are many cases for general purposes, kind of like our general obligation bonds, but a little bit more fluffy. So so it becomes very difficult for us to pinpoint what are they being used for. I see, I see okay. Sorry, I should have been clearer on that before. No, no, no, because I just was wondering, well, you know, because at one point it sounded like it was all or nothing. Right. And to me, it seems like, well, if you have 21 others to choose from well you know, you go over there instead of going over here, but you're saying that just a selection. And I think that was one of our intent in terms of looking at how do we operationalize this direction. And I know that, you know, you come to us yearly. And so I just I just feel like, you know, as, as things sort of make their way on an annual basis, this is something that I know that I'll be bringing up. And I don't know if anyone else will be bringing up, but I think that's something to keep in mind in terms of, of the effects of Ice in our community. And like Peter, I also feel that we need to we need to do something here. Thank you. Thank you. Before I turn back to Councilmember Casey, I'm going to ask a couple questions and make a couple of comments myself. So as I understand it, what you're saying is, I mean, we we get funds throughout the year that we want to invest. It's not this is not that the money's invested in waiting. We this is this is there's always a churn and there's always new investments. And we it's a matter of timing, right? Because an issuance comes. We buy it. It might be the first issuance might be an alphabet or a, an Amazon issuance. And if we don't take it when it comes, we have to wait for another issuance to come later potentially, which could be an opportunity lost in some revenue loss. Is that correct? Correct. Okay. So that's important to understand. It's not that there's it's not like the stock market where you can go out and choose from a portfolio at any moment and invest in one of many choices. That is correct. Okay. And then I, you know, I know that your original report talked about Microsoft being the only company here. And, and this was based on the fact that there was a $600,000 contract at DHS for using Microsoft tools of some kind. It seems very small to me, actually, at an agency that large would only be spending that much on a contract with Microsoft. I suspect our contract with Microsoft is actually bigger for all the things that we use Microsoft for Microsoft Teams, Microsoft Office, and all the tools we use to communicate as a city. So you know this action, we end up profiting Microsoft more by the contracts that we spend as a city. I believe then through this secondary market of bonds, that probably is a fair statement. I mean, I'm not I don't want to put you on the spot. I just a question for you. In looking at the supplemental memo, we were able to see what we as the city spend on contracts with all the other companies except for Microsoft. We couldn't see. But anyway, I mean, I don't know if Khalid's here, but anyway, I'm sure we're spending. Oh, it's okay. I mean. I think is it about. 3 million. $3 million a year that we spend on our Microsoft contract? I suspect that the Microsoft contract, the DHS has predates the current administration and will probably continue long beyond the current administration. So I you know, I mean, while we you know, we certainly all of us, I think, are in agreement that it's reprehensible, the behavior and that we should take every action we can as a city to protect from the abuses of Ice. It's not clear to me that this is the vehicle to do that, especially given, you know, that we're already we're going to continue spending money and on on contracts with these companies, unless we also want to take action to, to rethink who our provider is for our services based on a temporal issue with the current administration. The other and and at the same time, we're you know, we're Microsoft's building a large data center in our district. I mean, in our community, in our city, we have obviously, you know, companies that are coming in and investing in that we are welcoming into our city to invest in our city that are on this list. And so I, I'm a little uncomfortable that this is the vehicle by which we take action against Ice. I think that we've done admirable and very strong work. And thanks to Councilmember Ortiz and others for leading on, on standing up for in the ways that we can as a city against Ice and their abuses and investing in, in, in our response network, for example, and making sure that we are there to protect people when they're targets. I, you know, I think this is a, that's a separate conversation and a very important one, but this is I'm a little uncomfortable with this conversation because I don't think it really achieves what it is that we would like it to achieve. So anyway, and I want to thank you, Maria, because you've done a great job today of explaining some complicated finance things that that, you know, prior to today's meeting, I didn't fully understand. So you do a great job of kind of articulating how it is that we invest the city, what the process is. And it helped me better understand, you know, what, why this is more complicated than it seems on paper. So I really appreciate that. Now I'm going to turn to Councilmember Candelas. Councilmember Casey, do you have any. No, I'm kidding. You. Put your hand down. No. So would would you be open for a friendly amendment to include some kind of analysis to what other municipalities or other cities are, are doing with regards to Ice investments or disinvestment, whatever you want to call it, as part of the analysis and direction to the administration next. Year. As a friendly amendment. Well, I guess no, the challenge is because we'll be right back here again having the same conversation. That's I think we should resolve it here and now. But I think I think in order for us to adequately gauge that, I think I'd like to know, you know, for example, what other other cities in in California are doing with regards to their investments and see if they've delineated and or specified or provided more directions to their respective administration and their investment officers on, on how to thread this important topic, given what we're seeing nationwide. So we would accept the staff's memo. It's your memo. Yes. Sure. Great. Thank you. I'd like you to clarify a little bit further what you're asking for. What one more clarity do you need? Do you have a time frame for the study? When do you expect that to happen? What's the sort of the scope of what you're looking for? How many cities. Council member. California. Only this goes back. Every year. I'm asking for an analysis on what other cities have done with regards to Ice investments. I don't know how much more clear I can be. I decline the friendly amendment. Thank you. Okay, then I can outsmart the substitute motion. Okay, so I think we're. I see one more hand up. Let's. Maybe we can wrap it up after Councilmember Ortiz, or at least take a vote on the. Yeah. No, I just want to thank my colleagues, regardless of, you know, the side of the discussion you're on, I appreciate everybody's input. And even though this may have not gone my way, I will continue to advocate for my community and do everything I can to protect my residents from mice. Thank you. Okay, so we have a substitute motion, which at this point is to accept the staff recommendation. And we need six votes to do that. So let's take the vote. Okay. The motion fails. Will you tell us the. Motion fails 3 to 5 with Foley. Wait. Sorry, I can't read the screen to say it out loud again. I have Kamei Ortiz, Candelas, Tordillos and Campos. And Foley is reflected. Cohen is reflected as Foley because he's sitting in her chair. So if you're looking at the screen, that's not fully voting, that's Cohen. Okay. So we are back to the underlying motion. And if we have further comment or suggestions on the underlying motion before we move to vote on the underlying motion, I see no hands. So let's vote on the underlying motion, which was the memo authored by Ortiz and Kamei. Okay, so that motion fails. And that brings us to kind of a stalemate. I think we are. Let me let me say it out loud for the people who are visually impaired. The vote is four four with with Cohen, Tordillos, Mulcahy and YAC voting against. Okay, so so the next step, if we want to reconsider the underlying motion, because we do have some issues with needing to update our provider list for our bonds. And we wanted to try to get that done today. We would have to have a reconsideration of the original motion or a new motion that's somewhat different than either the other motion. So I will take another. I see Councilmember Candelas. Yeah, you know, I'll move staff's recommendation with with the analysis component that I requested as a friendly amendment. Second. Thank you. Okay. We have a motion in a second, and I. Just want to clarify, just I took it, Councilmember, that you would leave it to our discretion to provide as much or as much information as we felt deemed necessary to give you that back. Correct. Okay. Okay. So now we are on to the third motion and let's vote on. That. Motion passes unanimously. The motion. Carries eight zero. Thank you everybody. And we are done with item 3.3. And I will step aside. Okay. We're going to move on with the agenda. Moving on to item 3.4, which is right. You know, I'm I'm gone for two hours and I forget what happened, although I was paying attention. 3.4 grant of franchise to LS power grid, California. Do we have a presentation? No. No presentation. Any discussion? I have public speakers. I'll just. I'll say this. I'm really excited about LS power and the agreement that was made to co-locate LS power at the Metcalfe station with PG&E. So working with PG&E LS power and Open Space Authority, it's. We were able. The city and everyone was able to negotiate ls power moving in and not negatively affecting the Coyote Valley. So it was a huge win. We had a nice press conference there last Friday and it's just wonderful that this is moving forward. We know how important we're going. We need more. We need more power. And less power is going to do that. So if there's no I don't see, I do see, I need to. I need to call the public speakers. I'm sorry. Public speakers. Yes. See, I'm gone and I forget what I'm supposed. I'm sorry. Councilman, and I should have called you Councilmember Campos. I'm so sorry. Let's start with the public speakers. Yes. I have three cards for this item. Dash leads. Come on down. Marnie, Kelly and Casey Carroll. And we do stay with the one minute timer. Once we go for a whole meeting. Hello. My name is Dasha leads. I'm the conservation coordinator for the Sierra Club Loma Prieta chapter and the San Jose resident. We're asking you to please defer this vote until adequate environmental review and community noticing is conducted. The environmental impact report for this project does not analyze the impacts of data centers, even though the massive 200 or 2000MW of capacity your building is clearly meant for data centers in the future. This amounts to SQL fragmentation and renders the environmental analysis inadequate. Alviso carries some of the highest environmental burdens in our region, according to Cal Enviro Screen, these data centers could bring diesel backup, diesel backup generators on site gas power plants that could make these burdens worse. Alviso residents do they deserve more noise and air pollution? Currently? Right now, they don't have a say. I spoke with campus canvassers who went out into the Alviso community over the weekend, and when they asked residents about the power lines and data centers, most residents had, they just didn't know what was coming. So most residents don't know what's coming because we haven't done. Thank you. Next speaker. Good afternoon. My name is Marnie and I am a high school student from San Jose District three, and I am part of Silicon Valley Youth Climate Action. I am concerned that the environmental impact report for the proposed power lines does not take into account the environmental impact of data centers that would likely be utilizing that power. Please do all that is possible to ensure that any data centers powered by these transmission transmission lines do not harm the local environment and the climate. Please make sure that data centers are not built over sensitive bayland habitats. They use as much as possible, entirely renewable energy. They pay for their own increase in energy demand, and they have minimal impacts on surrounding communities from and the environment, from water use, from noise pollution and from air pollution. Thank you. Thank you. Next speaker. Hello. I share concern that the environmental impacts of data centers, use of these power lines be fully investigated. Please ensure that our city's irreplaceable baylands are prioritized and protected. I ask also that only renewable energy be used for this project. Data center owners be required to pay for their increase in energy demand, and that these developments not cause noise, water or other forms of pollution. Thank you. Thank you. Next speaker. Good afternoon, council members. I'm Casey Carroll, senior vice president with LS Power Grid, California. I'd like to take a moment today to thank city staff, especially the Department of Public Works, for all the efforts that have brought this franchise before Council today, the franchise, if granted, would mark a significant milestone for nearly $2 billion in grid reliability projects proposed to serve San Jose and neighboring communities. As we look to construction, we're committed to continuing the spirit. The same spirit of cooperation with city staff. Your offices, and our neighbors. We thank you for your consideration of the franchise here today. Thanks. Back to Council. Thank you. Council Member Campos turn to you. Thank you, Vice Mayor, and thank you for being at the press conference for this on Friday. I was not able to attend in my own district, but I appreciate you being there and speaking to this issue. I also appreciate the work that staff and our community has done. I know that when we are talking about environmentally sensitive locations, whether it's in North San Jose, South San Jose, Coyote Valley, I know that these decisions should not be made lightly. And so I just want to emphasize that there has been a lot of work to ensure that we are making sound decisions. And so with that, I will move the the item forward. Thank you. Thank you. I have a motion and a second Council member. Cohen. Yeah. Thank you. Just want to thank LS Power and PG&E and everybody for making this getting us to this point, making this happen. I really appreciate the the collaboration and partnership between the two two organizations to make sure that we were preserving our open space in Coyote Valley. When this started, we weren't sure how this was going to play out, and we, several of us have been were pushing for that to get worked out and make sure that we could, we can do what we need to do for our grid reliability and economic development without affecting our environmental goals as a city and as a community, just just to briefly mention about. The commenters and their questions about the environmental impact. You know, this is a, this, these lines are part of Cal ISO's plan to make sure that there's a robust grid across the state and make sure that there's not power outages and that there's a there's reliability for our customers, how that power gets used is not was not part of that consideration, that decision about these lines being located in these locations was made many years before any potential land use decisions are being considered. We have companies throughout North San Jose and residents throughout our city who have been concerned about the lack of reliability of their power sources, which makes it hard for them to do business and makes it hard for our residents. And having the additional capacity on our grid in our area will be beneficial to everyone. So I really do appreciate this work. I did ask a question last week, and I'm appreciative to hear that, that the work that's being done, particularly in Alviso with lines that are coming overhead, are being done with all care to make sure that they're they have all the technology that is now we now know about to prevent any injuries to birds with the latest of the standards and spacing of lines so that these are environmentally sensitive installation process. So thank you to Ellis Power for. That. Great. Thank you. Council member Kamei. Thank you so much. I just wanted to thank everyone involved. You know, these kinds of projects don't come around very often. I mean, it's sort of once in a lifetime type of a project where you're really, really doing something great for the infrastructure and for what's to come in the future. So I just want to say thank you to all of the people who were involved in this, as well as, you know, continuing the collaboration. I think that the message is out there that we care about preserving our environment and open space. So I think that as long as we're able to like come together and collaborate, I think that will be a great success. So I just wanted to say thank you. Great. Thank you. Seeing no further hands, let's vote. Did you want to? Okay. Motion passes unanimously. Okay. Moving on to item 3.5 Status of Open audit report. Audit recommendations. Report. We have Auditor Joe Royse. Good afternoon. I think Jennifer. Wanted to say something first. Yeah, I'll go first. Well, thank you, Mr. City Auditor. Good afternoon, Mayor and City Council. The report that is in front of you today that our esteemed city auditor will be presenting to you, reflects how we manage performance across the organization and how we hold ourselves accountable for results. I truly believe that such audits serve as a core management tool. They identify where we need to improve operations, strengthen controls and deliver services more effectively, transparently and equitably. Overall, the results of the six month review again show that we had strong and sustained progress in audit implementation over the past decade. In fact, departments have implemented or closed 88% of all audit recommendations exceeding the auditor's target in the last six months alone, teams closed 57 recommendations in the city now has 88 open items, the lowest level in more than ten years. That trend reflects strong execution, clearer ownership and better coordination across departments, and is something I monitor and discuss regularly with our department heads. I want to recognize that progress, particularly the work of the Public Works Department and their animal care and Services division. The department closed all recommendations from its 2024 audit in a short time frame. They were relentless in doing so. That level of focus and follow through reflects the standard we expect across the organization. At the same time, several areas require continued attention. These include cequa and permitting processes within PBCE operational clarity at interim housing sites and procurement policy updates within finance. These items do not present an imminent risk, but they require sustained focus to ensure timely completion. We will continue to track these items closely and hold departments accountable for delivery. In closing, this report shows that the organization is improving performance, strengthening accountability and using audits to drive better outcomes for our residents. We will continue this work with discipline and urgency. And with that, I'll turn it over to you, Joe. Thank you. Thanks, Jennifer. So. Joe Royse, City Auditor, I'm here with Michelle Mallari from our office to present the report on status recommendations as of December 31st, 2025, under the city charter, the City Auditor's primary responsibility is to conduct performance audits. These audits include recommendations to address deficiencies strengthen accountability and improve the efficiency effectiveness and equity of programs. Over the past ten years, our office has issued nearly 100 audit reports containing 664 audit recommendations that address many areas of the city's operations. Our office monitors progress in implementing those recommendations and provide regular status updates. This report shows the progress on 145 audit recommendations. And since our last update, 57 audit recommendations were implemented or closed, as Jennifer noted, we'll be carrying forward 88 open recommendations next cycle, which is the fewest that we've seen carried forward in more than a decade. As noted earlier, the office has made 664 recommendations over the past ten years. And as Jennifer noted, 88% have been implemented or closed, which is above our target of 80%. In addition, 75% of recommendations made over the past five years have been implemented or closed. To illustrate the range of department's work to implement recommendations from past audits, we want to highlight a few. Some recommendations are large in scope, affecting multiple departments or having broad program impacts. Others are smaller and more targeted to a single department or workflow. Together, they demonstrate the variety of recommendations that we've made over the years, as well as the actions departments have taken in response. As Jennifer noted, the animal care and services as implemented as implemented all 39 recommendations from our 2024 Audit of Animal Care and Services. Since our last update, ACS has taken several actions, including completing shelter capacity assessments, updating guidance around daily care of animals, supervisor responsibilities and data entry, adding new performance metrics to its public reporting. Beginning to provide limited free spay and neuter services for pets, and developing a self-service platform where rescue partners, among other improvements. We believe that these actions, along with the hiring of a new shelter operator in November, will put us on a good path to improve services moving forward. The administration proposed updates to the Operating Budget and Capital Improvement Program policy or council policy. One Dash 18 to clarify guidelines and cost recovery and revenue sufficiency, considerations of ratepayer impacts and policies around reserves and fund balances. The City Council accepted the updates or updated policy on March 3rd of this this year. Those closed recommendations from our Audit of Environmental Services from back in 2012 and the audit of development partner work in progress reserves in 2020. Public works also updated City Policy 1.81 on the use of city and personal vehicles. The update requires departments to monitor overall fleet utilization and clarifies guidelines for take home vehicles, including monitoring for personal use. Fleet Division also developed performance measures to track work order timeliness from our those closed recommendations from our audit of fleet maintenance and operations in 2020, and our audit of take home vehicles in 2022. The Housing Department streamlined performance measures and aligned the more consistently across reporting platforms and is in the process of documenting methodologies to ensure consistency over time. That's from our 2023 out of housing performance measures. PRNS executed and updated agreements with the remaining school districts served by the San Jose Youth Empowerment Alliance. The agreements clearly defined roles and responsibilities for both city and school staff. That was from our 2019 audit of the Mayor's Gang Prevention Task Force, which is now the San Jose Youth Empowerment Alliance. Retirement Services has established purchase orders with its remaining vendors to eliminate the use of nonstandard payment methods, which was from our Retirement Services audit in 2024. And lastly, City Clerk improved its performance management system by updating its performance measures and assigned responsible staff. They additionally updated its form 700 procedures to address Non-filers and the assessment of late fines. Those clothes recommendations from our 2016 audit of the Office of City Clerk and the 2019 Office or audit of Form 700. In 2018, the City Council directed the City Manager to identify and prioritize work on 12 outstanding audit recommendations while continuing to make progress on all others. I'll briefly highlight the current 12 priority recommendations. The three areas of potential budgetary savings include updating time tracking guidelines and reviewing cost recovery calculations for environmental review fees from the 2022 audit. Environmental review for new developments was implemented this past year, renegotiating revenue sharing terms of the integration agreement with Valley Water from the 2016 South Bay Water Recycling Audit. Clarifying maintenance responsibilities at interim housing sites between service providers and the city as from our 2025 Homeless Coordination Audit. These last two are both in progress. The three recommendations in the area of operational efficiency include identifying vacant lands within the city's real estate portfolio and reporting annually on their intended use from our 2021 audit of Real Estate services. Finalizing publishing guidelines in the city's SQL requirements and processes for environmental consultants. From that from the 2022 Environmental Review for New Development Audit. Those two recommendations are both in progress. And the last one here is a contract with outside service providers for spay and neuter services from the Aces. Audit the animal care and services audit. Aces currently has two active purchase orders with spay and neuter vendors, and intends to work with the Finance Department and the City Attorney's Office to use the municipal codes, unique service provisions to. To obtain future services. Three priority recommendations here have improved service delivery include increasing language translations of vital documents and include language translation options and SGA permits for the sga.org website. That's from our 2023 Residential Building Permit audit. Updating the San Jose Animal Care Centers Manual to align with Association of Shelter Veterinarian guidelines for 2024. Audit of the ACS that I've mentioned before. ACS adopted the ASV guidelines as a primary manual. As part of our review for this report, we noted that updated ACS specific policies and the ASV guidelines address many of the procedural gaps identified during the audit, and we do encourage ACS to continue reviewing and monitoring its policy and practice to ensure continued alignment moving forward. Lastly, incorporating all language is spoken by 5% or more of the population to the SJ311 website and mobile application. Both the translation recommendation related recommendations are both in process. The three priority recommendation area of citywide security risk mitigation include reassessing procurement policies to align the city's risk strategy with timely procurements for 2025, audit, procurement and the last two are from our 2025 Audit of fire Inventory controls or controlled Substances separating critical duties for management of the central supply of controlled substances from our controlled substances, which is in process, and updating policies to formalize central supply oversight which has been implemented. More information on all open audit recommendations is available in the appendices of our report and in our online interactive dashboards, which can be found on our website, which you can see in the slide. I want to thank all the city departments for their work implementing audit recommendations and for their assistance in compiling the report. I'd also like to thank my staff for continuously working with departments to document and verify the information included in the report. With that, happy to answer any questions and ask that you accept our report. Thank you. Thank you, thank you for the presentation and thank you for meeting with us and briefing us on the the open audit items. Do we have any members of the public who wish to speak? Yes. Valentina m come on down. Hello Council members, my name is Valentina Martincic and I'm here to speak about animal shelter data and why the audit report for the shelter should not be accepted as is. You recently raided the shelter's performance highly. These numbers may reflect reporting changes and data manipulation, but not real improvements. In 2025, 1600 cats were returned to the field. It's a 25,000% increase since 2021. Kittens as young as 30 days are released to the wild. Found animals are often not accepted into the shelter and remained in public care. Many are rehomed without being spayed and neutered, contributing to the overpopulation, and this information has now been removed from the public view, making it impossible to track outcomes accurately. Other fields and data have also been recently removed, further limiting transparency and oversight. Thousands of records have been changed retroactively reducing reported deaths and inflating life release. Maddy, come on down. The auditor stated that all 39 items of the animal care center have been closed. I am a volunteer at the shelter. I disagree with this statement specifically just in this last month I saw an issue with how staff was doing a dog to dog appointment. I followed up via leadership to ask what the clarification of process was, because it did not align with actual documented procedures we have as volunteers. After two weeks, I didn't get a response it took for follow ups and magically only got a response today after the email trail was submitted to the document clerk. I have concerns this feels like a bit of a pencil whipping process. I've seen the alleged documented training. It is not something someone can follow. It is pictures. It does not align to the specific situations. People continue to get hurt at the shelter. Volunteers have documented process, the staff hasn't adopted it, nor are they cooperating to even. I'm sorry. That's your time. Thank you. Back to Council. Thank you. Council member Kamei. Thank you so much. I want to thank the auditor and his team for always doing a great job this year. I noticed that there were more completed items and I want to thank the staff for really trying to get through a lot of this. Some of the items that are on the appendix B are had been delayed and they're moving forward. So I know that there's a lot on your plate right now. But you know, much got done this year. So I want to recognize that for all of the staff that are trying to complete their deadlines in terms of where they see things going. So with that, I'd like to say thank you. Both the auditor and to staff and move the item. Second. So second. Okay. Thank you. Any other questions? Joe, I'm going to ask you the question I always ask you, which is what keeps you up at night in relation to the open audit items or your work in general. So most. Of the recommendations, pretty much all our recommendations are around improving the city's system, internal controls, which are basically nothing more than the systems we have in place to make sure things are working as intended or the city's assets are protected. These are things like procedures which define how, you know, the day to day work is done, or supervisory responsibilities or, you know, systems for procuring and overseeing contracts that, you know, contractors who provide services on the city's we have for. And a lot of this work is done by staff, not necessarily on the front lines, but might be providing support analysts, attorneys, IT staff, HR staff, accountants auditors and and I would just say that a lot of this work I'm talking about is it's not secondary to the way we do business in the city. It's integral to how we do business in the city and in the wake, in the in the face of a large budget deficit, which is I'm concerned that we we see backsliding. You know, we've spent you know, it wasn't just this. We've seen cycle over cycle of the number of open audit recommendations declining. There was just a few years ago, we had about 200 open audit recommendations carried over. Now we're below 100. My concern really is backsliding. And the system of controls weakens in the context of a of a budget, a real tough budget season. We've seen that in the past that again, the controls get weakened and then we see problems down the road that we end. up dealing with later. So that's that's what keeps me up at night right now in the context of what we're talking about today. Thank you. I really appreciate that. We as council members, we depend on city staff to get the work done. Many of them are forward facing, but there's staff, analysts behind the scenes who we don't see, who are also doing the work and and enabling the work that we do see to get done. So I'm sure that all of the council shares your concern about any reduction in workforce, because they're really critical to the work, to the work that we do, also to the continuity and the history of the work that they've done, remember what happened two, three, four, five years ago. So I, I share your concerns too, and we'll just have to watch the budget as it goes forward and see how that's affected. Okay. I don't see any other hands. So let's vote. Thank you Joe. Motion passes unanimously. Okay. Next item, item 6.1, San Jose, Santa Clara regional wastewater facility capital improvement program update. I understand we have a presentation. There we go. Good afternoon. Vice Mayor and Council. My name is Jeff Provenzano, the director of the Environmental Services Department. The San Jose Santa Clara Regional wastewater Facility processes roughly 100 million gallons of sewage daily for 1.4 million residents and businesses from seven cities and unincorporated areas, including the cities of Santa Clara Milpitas Cupertino. Campbell, Los Gatos, Monte Sereno, and of course, San Jose. As one of the largest advanced treatment plants in the Western US, it is a critical regional asset because it treats our wastewater, protects public health, prevents pollution in the San Francisco Bay, and supports our local ecosystems. We're excited to bring this item forward. Today with me is Mariana Chavez Vasquez, the regional manager. Sorry, the general manager of the regional wastewater facility. And Kapil Verma, our deputy director of our capital improvement program. And with that, I'll pass it over to them. Okay. Thank you. We're going to try to make this as as fast and easy as we can. I know that you have had a long day so far, so we just a reminder, we're coming back today after a study session we had last year, January 2025. We were here just to give you an update of where we were with our capital program. Maybe just a reminder of our capital program, the largest capital program in the city. We have been working in this in this program for the last ten years. So one of the items that that we discussed when we were here in January was how much progress we had done to date and kind of like some of the issues that we have found as we have completed some of these projects. So when we when we came in January, we discussed three main items that that were kind of affecting how we will do the work in the next ten years. One of them was how the scope has the evolution of scope at the plant, and also issues with the cost and the escalation and how inflation has been affecting all these. We will discuss also some changes in regulations that are going to impact the projects that we have coming forward. And of course, we are still working on a facility that is started in 1956. So aging facility, as Jeff mentioned, the largest facility, one of the largest facilities in the western side of the United States. And we are the largest facility in the Bay area. So at that point, we just talked about like the things that we still had to do to complete this study, which we did in the last year. And what we're doing today is basically being bring you a status update of where we are with the program, what is happening with kind of like the technical projects that we'll have coming forward, some of the programmatic requirements? And how is that looking also for our financing and cost impact for the program? Just a few things just to kind of like set up the stage and will walk us through a lot of the, of the details of the program. We have done a lot of work in the last ten years. As mentioned, our program started around 2014. We have completed to date 31 projects around the facility for a total of $1.2 billion. We have from the original master plan that put together kind of the projects that we're going to be done. We have completed about 30% of them. We are very proud to say that we are an award winning program. We have done a lot of like work and has been recognized by our peer agencies and professional agencies. We have also successfully implemented design build at the facility, and what we are highlighting here is four of our largest projects that were completed in the last ten years. We also have been focusing on projects either because of priority that they are in poor shape, the structures were in poor shape or because we wanted to improve resiliency of the facility. So what we are highlighting here, for example, at the bottom left, you can see the headworks facility. That was a priority area for us because of issues with the conditions of the of the system. And then on top are the cogeneration facility. So that was one of the priorities of the first ten years of the program. So we could improve resiliency at the facility and use all the energy that we produce because of our treatment process. So we can say now we can be independent from the grid, from PG&E, we have improved the resiliency of the facility and we sell produce about 75% of the energy that we use currently. So what we will do will go through kind of like the different process areas and maybe talk a little bit about the projects that we have completed and how we're shifting focus to other things and how the next ten years are looking. Good afternoon, Kapil Verma, CIP deputy director. As Mariana mentioned, we'll talk a little bit about CIP and a snapshot of where we are and what the next ten years looks like. What we have here is a overview of the regional wastewater facility. It's an image that a lot of us have seen quite a bit over the last several years, and had a chance to actually go out and visit and do some tours. The real takeaway from this photograph and this image, though, is the identification of multiple unit processes, and they're all called out there in text boxes. And I want to call your attention to the idea that each one of these unit processes is critical to the effective operation of the treatment plant and the operation and treatment happens in a sequential process. And so I'm going to go through that sequence over the next few slides. First and foremost, we have preliminary treatment right now. This is one of the easier ones to talk about. Mariana mentioned the headworks project that was completed a couple of years ago. Preliminary treatment is the first step in the treatment process, and it effectively protects all of the downstream infrastructure. So super critical. It primarily removes all of the inorganic material before it gets down further into the waste stream. And our mind reliability here for preliminary treatment has been achieved. After completing the headworks project, we have no more preliminary treatment projects scheduled or booked for the next ten years. Moving forward with preliminary treatment, which is the downstream of headworks, this is an area of focus for us. In particular, over the next ten years, we have not done any major work to date. Just a quick synopsis of what primary treatment consists of. We effectively have these primary clarifiers, which is the first step in the treatment process to separate the solids from the liquids. The primary clarifiers represent some of our most aged assets, dating back to the 50s and 60s, and I'm not sure how good the photographs show up on your screen there, but as you can see, a lot of the infrastructure has deteriorated, a lot of concrete spalling, a lot of mechanical and metallic components that need to be replaced or rebuilt. And this treatment process is super critical as all the other ones. But this one in particular, as I mentioned, a lot of the solids settle to the bottom of the primary, primary clarifiers, and those solids feed the digestion process in our biosolids processing. And I'll talk about that in a few slides. The liquid stream or the top half of the primary clarifiers goes downstream to feed our secondary treatment or our biological nutrient removal process. And again, I'll talk about that in a few minutes. But we have a heavy investment in our primary clarification system over the next ten years. And one of the complications of this in particular is that we don't have a ton of capacity. There's going to be a lot of complexity in the construction sequencing, potentially having to build out some capacity so that we can sequence and phase out the work over the next years to come. Okay. Secondary treatment. This is what we characterize as the heart of our treatment process. This is the biological nutrient removal process. And this is where effectively all the biology occurs, all the bugs and science here break down our waste. And this is really where a lot of our npdes compliance permit is achieved. So needless to say, this infrastructure is super important. And as you can tell again in the photographs on the right hand side. A lot of deteriorated assets. I want to talk a little bit about the aeration system project that's coming up. This project really has two primary components to it. One which is across the whole facility, asset restoration or rehabilitation. A lot of stuff is falling apart and in need of repair. The other piece of this is, and we've brought this to council. Previously, the concept of our new watershed permit and our more stringent regulations for nutrients, in particular, total inorganic nitrogen. That's going to require some process improvements to our aeration system, which we don't currently have. A couple of a couple of positive notes though. You know, this watershed permit is impacting the entire Bay area and all the Dischargers, I would say with confidence that we operate our facility and produce a very high quality effluent as it relates to nutrients. So we don't have as far to go as some of our neighbors to the north. I'll provide one example, Sfpuc, which is a comparable utility to us. They have a $2 billion nutrient program in front of them to upgrade their assets and to further improve their treatment. Our investment over the next ten years is about $250 million. Now, that represents just the first phase of our aeration tank restoration. There'll be additional improvements following the first ten years. Okay, final step in liquids treatment is our tertiary treatment. And this is primarily our filter complex, our granular media filters and also our disinfection before we discharge out into the San Francisco Bay, we have recently completed a filter rehabilitation project, which extended the useful life of a majority of the filter complex. We have a little bit more work to do in a phased approach. We have another project coming up called Additional Filter Improvements. The combination of these two projects will yield a facility that won't need replacement. So what do I mean by that? We by investing roughly about $100 million in our filters, we eliminate the need to build a new filter complex, which was originally envisioned in the Plant Master Plan in 2013. That project was valued at over $200 million. And so with that strategy in place, we feel like we've really made good use of our funds for capital improvements here. I also want to say that the filters is where we produce our title 22 compliant water for South Bay water recycling that goes out into the community. Moving over to the solids treatment, I alluded to it earlier with regards to the primary clarifiers. In particular, the solids go to the anaerobic digesters. The digesters are where the solids get broken down. One byproduct of that, which is really beneficial for us is biogas. And Mariana had mentioned that the facility produces roughly 75% of our own power on site. That's really substantive. And that's really a very strong thing to note for us. And it's a big win. And by completing some of these projects in the biosolids treatment scheme, we're effectively enhancing our ability to do that one project that we have immediately in front of us is the additional Digester Facility Upgrade project. One component of that project is to receive, oils, and greases from the community or fog into our digesters. That's a high octane source of fuel that further increases gas production and allows us to produce more power on site. One project also, that's completing this year we're all familiar with is the Digested Sludge Dewatering facility that's going to allow us to de-water our digested solids in a matter of a day, and significantly reduce the footprint of what we currently do. And sorry to say that the the additional digester project represents effectively what we consider to be one of the final biosolids projects for us in the program. So we talked about biosolids. We talked about gas production. Moving on to power and energy. You know, it's it's a generically, one can say that a wastewater treatment facility is the largest power consumer of any community. And the fact that we produce the majority of our power is, again, a really strong statement to make. And again, a really big win for us. And so through our cogeneration project, which we delivered a couple of years ago, we're able to do that over the last ten years, we've delivered all of our power and energy projects. We do have one study that's underway to further optimize during emergency operations, how we can operate the facility and bring it back online but in effect, we feel like we are done with our power and energy projects to date. And finally, we talked a lot about the fun scientific treatment processes and what those entail. But the facility's large in nature, as you know, and there's just a ton of ancillary infrastructure that supports it. Large diameter piping, roads, tunnels, support buildings. Those buildings have Hvac units, so on and so forth. And so we do a lot of projects that are related to the facility's package. And there's a list of them there that we've delivered over the last ten years and a handful that are in front of us. One major project that we're about to embark on is to upgrade all of the major pumping stations that are in between the unit processes, and that's going to be delivered via design build. As Mariana previously alluded to. Yeah. Please. So with that, I mean, I went through like all the projects that we have completed, what we have coming for the next ten years, what we wanted to show you here is just a little bit of how the cash flow is looking. Keep in mind this is cash flow is not encumbrances. So this is just kind of like showing how much money we're going to be spending in the next ten years. What you see on the left is kind of like the golden bars, is the 1.2 billion we have spent to date. What we're trying to show is that we have basically a similar amount of work coming our way. It's going to be as busy as it was in the last ten years. We are not seeing in the next five years a lot of changes in what we have as part of our adopted five year budget. So there is actually a 16 million reduction on that. So there is not going to be a lot of impact to our rates for residents. We are still we wanted to to share that with you. We are still among the most affordable rates in the Bay area compared to all the other agencies, at least for the residential side. And again, it's just more to show you how much work we plan to deliver in the next ten years. What we have here, just on the path forward, we're just kind of like repeat the same that we have been saying for the last ten years where. we focus on rehabilitating the facility. We are focused on meeting our permit and maintaining the operational reliability. Keep in mind that all this work that we do, we do while keeping the facility running 24 over seven, and we haven't had a violation of our permit in the whole time we have been doing this. And obviously we're not planning to to have that. We are going to be dealing with more stringent regulations. So that is going to be just a little bit more challenging. The work that we that we have coming our way, we keep managing our funding and financing strategies to try to keep the rates the most affordable to our not only our agency residents, but all the other tributary agencies that basically the whole South Bay, we keep looking at ways to identify potential federal and state funding opportunities. We mentioned in the past, we're going to keep trying to go towards getting that funding. A lot of agencies are not being very successful with this administration, but we are going to keep trying regardless if we have a change in the financing strategy. We're working with our finance department. We will come back and inform you before any change happens, and we will basically just keep coming to you for project awards and annual budget approvals. So this is just a status report. So the only action today is to accept our report. You will see budgetary actions and award actions in the next coming years. So with that, I think that we conclude our presentation and we're open for questions. Thank you. Do we have any public comment? I have no cards for this item. Okay. Then I'll go to council. Council member Candelas. Thank you, Vice Mayor. No, I just wanted to give Mariana, Jeff and and a shout out. This is the second time we see this presentation less than a week. As I was commenting to Council Member Mulcahy, given our role on Tpac. And, you know, I think it's really important for us to talk about the investments we're making for, you know, quite frankly, something we don't necessarily hear from from our residents. And that's, you know, issues around sewage and issues that are critical to run a city. So kudos to you all. And, and Mariana, I appreciate the, the, the mentioning of, of, of getting federal or state dollars to help lessen the impact on, on our ratepayers because obviously any, any reprieve we can provide with in the form of multi- million dollar capital investments from the federal government is, is all the better, especially for for our ratepayers, given the constant pressures that we we're seeing with rising costs across the board. So with that I'll move approval of the staff recommendation. Great. We have a motion and a second council member Kamei. When we don't hear from our residents, it's a really, really good thing. In the 1980s, when I lived in Morgan Hill, there wasn't enough sewer capacity going down to to Gilroy, and it was a tremendous problem because the sewage was coming up into the streets. Right. So you had a public health issue and and so thank you for keeping us safe and really thinking ahead. These projects are really very, very forward thinking. And so I think that hopefully we will not hear anything about that. And so thank you so much. I want to thank you for the presentation. I remembered the first presentation I had as a council member on a digester back in 2019. I had no idea what that really was, but now I do, and I've toured the facility and I think all is well. Your needs are certainly huge, and I share the concerns of our council that we don't want to see a big increase from to our residents, and we don't want to have to address the reason for it. And hopefully we can we can all get through it, but it's there's a lot of money that needs to be spent on the capital improvements. And, and I acknowledge that seeing no other hands, let's vote. Motion passes unanimously. Thank you. Next item is item 8.1. Preliminary actions required for the creation of the East Village Business Improvement District and levy of assessments for fiscal year 2627. I think we have a brief presentation. All right. Good afternoon, Vice Mayor Foley and council members. Jen Baker, director of the Office of Economic Development and Cultural Affairs. And I'm here today with Vic Farley and Jessica Munoz from our small business team. Jessica and Vic have been the stewards of this project for over the past two years. So we thank them for that effort to get us to this point, and also would like to thank our colleagues in the City Attorney's Office and the finance Department for their work and support throughout this process. Also, importantly, we have consultants from community strong strategies who are under contract to the city supporting the business association and managing the campaign on the ground. They've been engaging directly with business owners, partners and have worked closely with stakeholders, including the Council Members Office. Today, the City Council has the opportunity to pass a resolution of intention to establish a business improvement district in district three focused on connecting downtown to the east Side. And I'll pause just a moment. I think it's really incredible to have the opportunity to connect downtown through East Village to Alum Rock Santa Clara business improvement districts. So what a tremendous show of faith by community members and leadership to find this opportunity. We're delighted to be able to bring this to City Council today. And I'd like to hand the presentation over to Vic and Jessica to take you through through the details. Thank you, Jen, and good afternoon, Vice Mayor and City Council. The bid the establishment of a bid must follow California law, which allows for the creation of a special assessment district to raise funds within a specific geographic area. What is important here is that all the funds raised by businesses within the district are used exclusively for the benefit of the district. A bid must be renewed annually by City Council, and the business community must adhere to a high standard of transparency and engagement locally, including adoption of the Brown Act, and maintain at all times accurate and complete financial records. Let me hand over to Jessica. Thank you. Thank you, Vic, and thank you, Vice Mayor and City Council. As you can see on the map, the geography of the bid consists of two parts the Green Zone, which is the commercial core of East Santa Clara Street extending from Sixth Street up to 22nd Street. And the Blue Zone, which includes the residential streets of. East of Santa Clara Street adjacent to San Jose State University. The reason for the two zones is the differentiation of. Of needs for service with the businesses on East Santa Clara Street requiring the full range of safe, clean and beautification services and the businesses in the residential streets towards San Jose State University receiving fewer services and paying a lower assessment. There are over 356 businesses with the current city tax certificate, net of exemptions in a variety of sectors from retail to professional services, and employing over 1100 people, many of whom are local to the area. There are. There is a culturally diverse mix of black, Latino and Asian businesses and for many business owners, this is their first experience of creating an effective association and engaging positively with the city. The East Village business community supports engagement with downtown San Jose State University and the East Side. If we look at the proposed assessment fee for all the businesses, you can see that the two zones have a flat rate of 250 in the zone one and 125 in zone two, assuming a 70% collection rate, the bid is expected to generate 51,031 $51,031 in its first fiscal year, and city staff will be discussing with the business association the continued work of the consultants to ensure there is a managed transition into the second half of 2026. This is the first budget identifying the proposed allocation of funds, with 72% focus on clean and safe, and the balance divided between marketing, beautification and administration. The board will review income and expenditures and annually present the Budget and Service Plan to the City Council for approval. Thank you. Jessica. Here is the timeline for City Council taking us from the resolution of intent today. Setting out the key milestones required, including an information mailing to businesses the public meeting for business owners, then the public hearing itself, and the first and second reading of the ordinance. If the City Council approves the resolution of intent today, then assessments could commence in July 2026. At the start of the new fiscal year. As Jen Baker said, the opportunity today for the City Council is to create a business led improvement district to unify the local business community, connect downtown to the East side and provide East Village with a clear sense of purpose and the prospect of a long term resource under the direct control of the business owners. This bid was discussed at the last update to the Small Business Advisory Committee on March 5th, 2026, which endorsed this approach to long term commercial and economic resiliency. I'd like to say a personal thank you to two business owners, Chris Patterson Simmons and Caleb Orozco, who for many years took on the leadership role to develop the business community along East Santa Clara Street and who pioneered the collaboration that we see here today. Thank you very much, Vice Mayor. Great. Thank you for that presentation. Look forward to that bid being completed. Toni, do we have any members of the public? Yes. Caleb and Chris Patterson, come on down. Good afternoon. I'm Chris Patterson. Simmons thank you. Jen Vick and Jessica. I am a board member of East Village San Jose Business Association. I'm here today to express my strong support for the formation of the bid. Over the past year, our board has worked hard to bring resources to the district and drive meaningful improvements. We are grateful for the support from the district three and the Office of Economic Development, and with the County in helping activate the corridor. These investments have made a real difference. We have seen increased engagement, greater visibility and a growing sense of momentum in our area, in our village. But we will also learn that it's one time and limited funding can only go so far without a consistent and reliable funding source, it is difficult to sustain these efforts or build the progress we've made. This is why our improvement is so important. The bid creates a long term structure. Thank you. That's your time. Next speaker. Good afternoon, Vice Mayor and council members. My name is Caleb Orozco, and I serve as the board chair of the East Village Business Association. And I'm also the owner of the Last Round Tavern, located on the corner of eighth and Santa Clara Street. I'm here today to express my strong support for the East Village Business Improvement District. Over the past two years, I've worked closely with local businesses and community partners, and one thing is clear our corridor has incredible potential, but it needs more sustainable and structured system of support. Our businesses are facing real challenges cleanliness, safety and visibility, but there's a real momentum we're in. We're in a unique location near San Jose State with the diverse group of small businesses that reflect the character of our community. The bid gives us the tools to build on that momentum through consistent investment and cleaning, marketing, beautification and events, while also creating a framework for collaboration so businesses can move forward together. Thank you for your time. Back to council. Thank you. Council member. Tordillos. Thank you, vice mayor. I want to start by just thanking city staff and our partners at community. Strong Strategies for all of the work to get us to this point. And also a special thank you to Chris and Caleb and all of our business owners in East Village, both for taking the time to come out and comment today but also for your years of investment in our community in East Village and for your partnership with city staff to again make this bit a reality. As was said, East Village is the bridge between downtown San Jose and our east side. It's a bustling, bustling community hub that's home to over 350 small businesses and also home to some of our greatest assets in district three including parks and community centers. Recurring community events, beautiful murals and public art, and some of the best restaurants in San Jose, all within easy walking distance to To. City Hall in San Jose State. The establishment of this district will help to empower these small businesses as they continue to serve our residents, create jobs and make East Village an example of the best of San Jose has to offer. So with that, I will make a motion to approve the staff recommendation. Thank you. Council member Ortiz. Just want to congratulate the East Village Business Association for this amazing accomplishment, as well as the Office of Economic Development and Community Strong. It's been a pleasure to know. Chris Simmons. I've really enjoyed your leadership, Chris, and thank you for your advocacy. Congratulations, Mr. Orozco, on your new position. You know, I usually don't give shout outs to pizza places outside my district, but I gotta say, that's a great pizza place. You got to try their tavern style pizza. And so I want to give him a shout out. Good place to go on a Saturday or Friday night. But I think that this bid will be a great connector from East San Jose to downtown, especially as we look at the hopeful completion of the Bart project. There's a lot of potential in this area, and so I just want to congratulate the businesses, our consultant and the Office of Economic Development. Thank you. And Council member district three. Thank you. I'd just like to echo my support of the neighborhood. When I'm looking for a restaurant, I go that direction. I don't usually go the other direction, so I'm excited that this bid has a potential of going through and what it can do for the neighborhood. So thank you for your advocacy for working so hard for it. With that seeing no other hands, let's vote. Motion passes unanimously. Okay, the next item is item 8.2 Downtown Residential incentive program tax and fee waiver for the Gateway Tower and Bank of Italy. Developments. Do we have a presentation? Okay. Thank you. Councilor Eric Sullivan. Director of Housing with me today is deputy director over production and preservation in the housing department. I'll go through a brief presentation today regarding admissions of two projects into the downtown program. One is new construction, which is Gateway Tower, which will be brought forth before, and the other is a new project, which is the Bank of Italy and its conversion into residential units. So briefly touching on our residential housing development feasibility study in December, we brought forth that new towers are always a challenge. This site, as we brought forth to council before with the Gateway Tower and it's new construction, required substantial public subsidy in a lining up of investments from both the city, the county and the Housing Authority in order to bring a new tower out of the ground totaling over $70 million. So it's a significant investment, but it's going to bring a new tower that is 100% affordable across a good EMI band, up to about 80% EMI. So it's significant kind of investment in bringing forth new construction in downtown. In addition, as I had mentioned, the first phase one here overall really gets into and provides of the new program that was adopted on the 27th up to first 7000 units where they will receive I o in lieu fees for at zero, as well as parkland, a 50% reduction than bass tax fees at 100% waiver for this affordable housing project, we are focused primarily on just one aspect of the waiver of the fees and incentives. In addition to the exploration for the high road incentive component of the adopted program. I will turn it over to Brandon to provide some additional details. Thank you Eric. So the Gateway Tower project is being developed by Core Affordable Housing. It's, as I mentioned, 100% affordable, up to 70% Ami 15 story mixed income property. And there's going to be around 220 dwelling units. And the approximate square footage of the ground floor will be 3300 on an approximate 0.5 acre site. The construction is expected to start May of 2026. And as as Eric mentioned, there's a significant city and county funding as well as the Calhfa partnership. MIP program that the development obtained as an award. And through that, they also got the tax credit allocations. This this slide just goes over our proposed tax and fee waivers as Gateway Tower is has section eight project based vouchers. It is exempt from the DNS and cramp construction taxes. And as it is also not subject to the inclusionary housing ordinance. Because of that, and in order to qualify for the high road scenario, they have to be able to meet skilled apprenticeship requirements and prevailing wage requirements. So the project will plans to implement these labor standards that support workforce development and quality construction jobs. So in this table, we're seeing the the waived taxes as well as the no fees requirements. And two options, two options on the parking fees. The standard 50% waiver. And then if they're able to implement the high road incentive, they can get up to 75% waiver. There. Okay. And then the next project we're bringing forth is the other side of the downtown program, which is the Office of Residential Conversions. So this similarly constructed has zero eco fees attached to it. A 50% park in lieu fee reductions, and then 100% waiver of taxes. And the project that we're bringing forward for admission into the program is the anchor building in our downtown, which is the Bank of Italy being developed by West Bank. You can see the scaffolding already gone up at the site, and they are looking to go into construction for conversion of the site into residential units in April. And Bonnie will provide more details. Similarly, the Bank of Italy conversion project's waiver. We can see in this in this slide is they're exempt from the bass and cramp construction taxes because it is a historic landmark that's subject to historic preservation. So they won't be charged. They won't be paying any taxes on that side. And then in terms of the Iho fees, we see the waiver here around 2.8 and park 50% reduction in the parkland in lieu fees. This slide is just a summary about the you today. The application, the two projects. And you can see here the Army bands, as well as the total number of units. As we mentioned, gateway is 220 units, all 100% affordable, up to 70% Ami and then the West Bank Bank of Italy conversion is 109 units that are going to be produced from that. And then at the bottom of this slide, we can see the Ami ranges. So the for the gateway tower, the rents, for example, for the 30% Ami will be between 1000 to 1500 and it ranges from 1000 to 30% Ami to 3,670%. Ami. And the income ranges are for a household of, you know, for between 42,000 all the way up to 140,000. So that gives us an idea of what type of incomes and rent ranges we're going to see. And then on the conversion side, as the market rents are still at affordable levels, around 110% Ami, we can see the rents are around 3300 for one bedroom and 4400 for two bedrooms, so market rents are still at a low at average 100 and 110%. Amis. And that's our presentation on these two items. And Do we have any public comment? Yes. Aaron Berger. Vice mayor and council, thank you for the opportunity here. My name is Aaron Barger. I'm with the Core Affordable Housing group and just wanted to be here to say thank you for your support as well as staff support in promoting this, the Gateway Tower project. It's a long time coming and and we're looking forward to break ground here this summer. So here to answer any questions that you might have, but just wanted to say thank you again and look forward to your support. Thank you. Great. Thank you. I'm thank you for building downtown. And I'm glad to see that the incentives are working that they incentivized development. That's wonderful. Council member Tordillos. Thank you, vice mayor. I want to start by just thanking the housing department for moving so swiftly to bring both Gateway Tower and the Bank of Italy redevelopment through the downtown residential incentive process. You know, the very first memo that our office wrote after I joined council was in support of the Gateway Tower project, both to support the city's investment in the project and also to establish that tenant preference program to support working artists in our community and help to both bring online over 200 units of affordable housing, but also help to strengthen, reinforce, preserve the unique arts culture in the Sofa district and then with the Bank of Italy development. You know, this is my personal favorite landmark property downtown. It's been vacant for a while, has seen better days. So excited to see this property rehabilitated, rehabilitated, and brought back to life with this conversion process. So both of these projects are going to bring hundreds of units of much needed housing into our downtown core. And I hope this is really just the tip of the iceberg in terms of the sorts of housing development and density. We can see downtown with our continued focus on encouraging housing production. So with that, I will move staff's recommendation. Great. We have a first and a second seeing no hands. Let's vote. Motion passes nine zero with Campos absent. Okay, wonderful. Moving on to the next item, which is 8.3 Multi-Family Housing Incentive Program, residential tax and fee waiver for El Paseo. Okay. Thank you, Vice Mayor. So the next project is our other side of our incentive programs, which are multifamily housing incentive programs. And this is bringing forth a project to admit the El Paseo Saratoga Tower into the program. And so this project, again, going back to December 24th, we talked about 2025. We talked about the cost of residential development, how these incentive programs are designed to really catalyze more projects into construction. So as with the downtown program, both new construction and conversion of office residential, now we're getting some more production going through the multifamily housing incentive program, which was revised back in December 2024. Then again, in January 2027, to add additional capacity for future developments like this one. So we're continuing to advance the work around multifamily housing production and building more units in the city today. So I'm just going to provide some more detail on this project. Thank you Eric. All right. So the El Paseo project is being developed by Sand Hill Property Company and 772 unit residential development with two buildings, 12 story structure and one with 398 units, and then a ten story one with 374 units. And from that will be a production of around 39 restricted affordable units at 110% Ami area median income. I keep saying Ami, but area median income. And then the next slide. This is the proposed tax and fee waivers. As we mentioned, under this program, under the phase one, the first 3600 units are not subject to the. Well, there's a fee here, but the. This proposal is. They're going to be paying the mixed compliance fee, which is around 13 million. Even though there is a waiver that the that they could have taken. And that fee is going to be put into another project, an affordable 100% affordable project called Cathedral of Faith at 2315 Garden Avenue. And then the the other side of it is the 50% reduction in the construction taxes, which is, as we can see, around 3.6, 3.7 million here. This next slide is our just a report on the progress of the multifamily incentive program. Since its activation. And we can see the. These are the developments that took off in. Since it's been activated since December 2024 and the production of 2200 units. And out of that 267 affordable units. And there's more to come. Newly added, there's about seven newly added projects that will be eligible this year, and we look forward to seeing a production of around another 2200 units. And that is the multifamily housing incentive program for the mission of this project. We welcome to take your questions. Public comment, I see Eric approaching, so we must. Good afternoon. Vice Mayor Foley. Members of the Council. My my name is Eric Shanower and and I'm speaking on behalf of Sand Hill Properties on El Paseo with this incentive consideration, we'll be able to pull our building permit by May so that the superstructure of the towers can actually start coming out of the ground for 772 units of new housing but also 30,000ft2 of ground floor retail park and a lot of mixed use amenities for the community. On a more personal note, the our company's excited by today's agenda because three projects we represent El Paseo, Gateway Tower and LS power. With your actions today will all be able to start construction by June, which will mean well over $1 billion of new construction in our city. So thank you for your support. Back to council. Wonderful. Thank you, Council member Kamei. Thank you so much. This is a project that I know intimately, and I know that there's been sort of a lot of, of different discussions in terms of, of the project itself, but I think that it will provide the necessary housing, but Eric and his team for coming up with a way of being able to have affordable housing and have market rate housing. And this demonstrates that, in fact, you know, the incentives, you know, I was a little bit sort of a doubting Thomas. I wasn't sure if it was going to work, but the incentive programs have worked. And I'm really glad that we will have jobs out there. We will have, you know, production of housing happening this year. So with that, I'd like to move the item. Thank you. Great. We have a motion and a second and and I'll just comment that the affordable housing piece is in on Konoha's Gardens in District nine. And that's exciting that that piece was able to come together. The combination between the market rate and the affordable housing because they've been sitting, wanting to build on that site for a long, long time. So glad that's all coming together, seeing no other hands raised. Let's vote. Motion passes unanimously. Thank you. It's exciting to see these incentives work and see all these units being ready to come out of the ground. The next two items we're going to hear together item 8.4 and 8.5. And then we will also have public comment on those two items. And we'll take council comments on those two items together. But then we will be voting on those two items separately. So this is the housing catalyst teamwork status report. And then the progress report on the implementation of the general Plan housing element. Thank you, Vice Mayor. Good afternoon, honorable council members and Vice mayor, Deputy director for planning. I'm joined here by Principal Planner Jared Ferguson. And of course, our housing director, Eric Sullivan. So I'll kick us off with this item. So just to start off with some background. So I'll share some of the the history behind the work that the Housing Catalyst team has been doing in preparation for this report over the years, and also how that feeds into the housing element reporting process. So the Housing Catalyst team was established in 2018 to help implement the strategies and policy actions from the city's previous housing crisis work plan. The team meets every two weeks and includes staff from four departments as identified here. So we have, of course, PBCE and housing, but we also work collaboratively with the Office of Economic Development and Cultural Affairs and the Department of Parks, Recreation and Neighborhood Services. As the city developed the six cycle 2023 to 2031 housing element, this team continued to play a pivotal role in developing and implementing the programs and strategies in the updated housing element. In June of 2023, the City Council adopted the housing element and staff proposed the first Housing Catalyst Team work plan. The work plan represents the high priority housing strategies and policy actions. The team has been focused on since and is also working on. Currently, it primarily consists of housing element programs but also includes other related work as directed by the City Council to promote housing in the city. In January of 2024, the state certified our housing element with 130 strategies and a goal of building 60,000 plus units over the seven years of the Housing element cycle. The state monitors progress of how all cities in California are doing against these metrics through submittal of the Housing Element Annual Progress Report, which is required to be submitted to the state by April 1st. Since certification in early 2024, staff has provided annual reports on the Housing Catalyst Work Plan to the Community and Economic Development Committee, followed by a combined item with the Housing Element Update in March to City Council ahead of submittal to the state. By this deadline, the report before you today is the result of a close partnership between housing and PBCE, and I want to recognize the work of several team members that contributed to this effort. With that introduction and background, I'll turn it over to Director Sullivan to walk us through the key housing programs. Thank you. All right. Thank you. Manira so I'll go through very quickly a couple of quick slides here. First, beginning with this slide which you've seen before, it's a good framework for how it is. We think about the work and strategizing around execution today. As you've seen just in the items before, we brought forth items under the rent subsidized and restricted as well as market rate units. So we're continuing to move the progress forward with the hopes that we also get in looking backwards on the continuum, more throughput from our shelter system, and more prevention work being done across the entire continuum. But today, we're focused more on the production side of the work. And so part of the as we saw today earlier, we brought forth incentive programs, ways in which that we can better bring forth to match what is the capital constraints within the marketplace with tools that we can apply as city's government to better incentivize the production of more market rate production, as well as affordable housing production. We've seen. As we talked before in the December cost of residential development study, that there continues to be headwinds regarding pricing and competition, as well as overall marketplace conditions, therefore, continuing to limit sort of the inventory. And what are the ways in which that we can address the limitations around housing production inventory by providing incentives in various tools, such as our multifamily housing incentive program in downtown incentive program that is moving that needle forward. But in addition to that, we've also, as one of our deliverable items under our focus area work is item 3.2, which is looking at ways in which we can better link capital to our use of land. And so we did a quick analysis as committed in this study, understanding where our entitlements currently land today. So what you'll see in this table is that there are 103 deals somewhere in the processing, creating over 31,000 units and a breakdown of where those units are across the different districts. Obviously, district three, with the inclusion of what was originally sort of promised in the Google redevelopment site, has by far the largest, but you'll see some distribution of units throughout most of the council districts. We then overlay that with the learnings that we had within the cost of residential development, and got to the following findings. First, you will see that of the total amount of 103 applications that have been submitted, 67% of those are for market rate projects, about 30% of those are for affordable projects, which breaks down unit wise of roughly the same amounts, about 63% for market rate development projects, 37% for affordable projects. Then on the slide, on the on the table to the right, you'll see what is that breakdown of the affordable and market rate projects within the different build types that we discussed during the December residential cost of residential development. So towers by far are more market rate just given how completely infeasible they are in the marketplace. We brought forth gateway and I mentioned and emphasized that it took a substantial amount of public subsidy to bring that new construction tower and gateway forward to. We also talked about some of the wraps and the podiums. You'll see the wraps tend to lean more to the market rate side, while more podium projects and those smaller density, smaller units lean more on the affordable side and then stacked flats, townhomes and single family. So this aligns to where the analysis points were from. The December residential cost of development study was. So then we did the next step. Where does that line on an infeasibility scale, looking at what is the probability of these projects going forward? So when we looked at overall feasibility, we found that the overwhelming majority of these units and these entitled projects are not going forward. So you saw from the previous slide, we had just a lot of towers, a lot of podiums, a lot of wraps that just can't quite get to the capital traction in order to come out of the ground. So we have a high amount of projects that are infeasible and a lower amount of projects that are feasible and able to move forward. Then we apply that analysis to a breakdown of the different housing types, and you'll find that affordable feasibility. We have about 4000 units that are in that sort of target zone that can move forward about just about 6600 units that are potentially feasible within the market rate side. And then the breakdown of affordable and market rate projects that are both infeasible, again, because of all the challenges that we had discussed going forward. This is the first set of the analysis. We're doing of better understanding how we can better link land to capital. We're going to come back at the next round, the next report of the committee with a further, deeper dive into this and better understanding what are some of the restrictions around rent schedules and some of the other challenges to bring this to the next level down, to really see how we hone in further some of the work we do around incentive programs to further bring forth more projects, as well as how can we better refine our tools around affordable housing projects in order to get to more production? And so that is some of the key takeaways that we've got into this analysis is where do we look at and identify those pathways in order to better meet some of our goals. And I'll turn it back to the team. Thanks, Eric. Jared Ferguson. Principal planner with PBCE. So just to get into some of the main takeaways from our annual report, the report, as always, includes our annual and cumulative progress toward meeting our regional housing needs, allocation or arena. It also reports on housing on individual housing element programs and strategies, including the actions underway through our Housing Catalyst work plan. And then this year, we've included a comparison of arena progress across comparable jurisdictions in the state and the Housing Catalyst work plan, as mentioned earlier, was discussed at the February Community and Economic Development Committee meeting, where the discussion focused focused on how the incentives and other tools can help move entitlement projects forward into construction. So this slide shows San Jose's progress over the last calendar year towards meeting our regional housing needs allocation. The orange bar represents the annual goal for each income category, and then the orange bar on the far right represents the total. Overall, these annual targets are based on one eighth of the eight year cycle for the six cycle housing element which runs from 2023 to 2031. And this next slide shows our cumulative progress in the six cycle housing element, which runs again, runs from 2023 all the way through 2031. The orange bar on the right shows our total arena allocation 62,200 units, and the bars on the left show the progress by each income category. The data shown here reflects again from 2023 through December of 2025. So as I mentioned, we've also done some comparison on San Jose's progress with other large cities, both in the region and across the state in this report. This chart shows each city's total arena allocation, and the next column shows the percentage through the housing element cycle that each jurisdiction is at. Since regions start their cycles at different times, and then the final column shows the cumulative progress for each city towards their total arena goal. So this data reflects through the calendar year 2024 since jurisdictions, as we noted, haven't yet submitted their 2025 annual progress reports. So overall, as you can see, all of the jurisdictions here in general are behind in their arena goals. Our region is is even further behind. Even when you account for where we're at in our housing element cycle. However, San Jose, as you can see, has performed better than the other large cities in the Bay area thus far. So getting into some of the specific items in our in our report, a big focus of Planning's work over the past year to advance the housing element and the Housing Catalyst work plan has been the general plan for year review. Two of the most significant six cycle housing element work items are part of that effort. Our small multifamily housing program, which is evaluating. Allowing 4 to 10 units on sites currently designated for lower density housing throughout the city. And then we're also completing a comprehensive evaluation of our urban village planning process as part of that work. The letter and numbers shown on these slides referenced the Specific Housing Element program contained in chapter three of the Housing Element document, and then planning for additional housing capacity through the four year review will help us prepare for the next housing element. The seventh cycle Housing Element, which is due in January of 2031. The General Plan Task Force began meeting in October and will continue through June of this year. So, moving into some of the completed items from the past year, we completed work around allowing SB nine type housing and additional zoning districts and implemented zoning changes for group homes with seven or more persons. These items received final approval in January from City Council, with most of the work being completed during the last calendar year. In addition, the moderate Income housing strategy was presented to the Community Economic Development Committee in May. So, moving to some of the other work items when the state certified our housing element, it identified several programs that would monitor closely each year as part of its review of our progress. These programs are listed here, and we have completed the first two so far on this list around our ministerial approval ordinance and then our housing balance report for the next item related to additional affordable housing tools in North San Jose. We continue to evaluate the need for these potential tools based upon the findings from our annual Cost of development study and what strategies may or may not best help us achieve further affordable housing production in North San Jose, and there continue to be ongoing efforts related to affordable housing production goals in the Dearborn area. And then, as I mentioned earlier, two items on this list are the significant portions of our work in the General plan for year review, and we're continuing to move those forward as a part of that process. And finally, staff anticipates completing the revisions to our planning permit findings later this year, which is the last item on this list. And I will pass it back to Eric. Thanks, Jared. And so the next item is just our work on Anti- displacement preservation. So we did release a Nofa. We're working with community development capacity organization on the execution of our land trust work, our soft story program continues to move forward as we brought that to council. Before we continue to expand our work on eviction prevention, as we'll be releasing some additional funding for eviction prevention in the coming weeks and then continuing to implement our work around tenant preferences as part of our Anti-displacement work. Additionally, just as as Jared mentioned prior, on February 26th, we came forth with both the Planning Commission and CDC to have a productive conversation about this work and how to move forward. Good questions were asked. We talked through the different strategies around both planning side and production of housing units, and how we continue peer city learning around our work and overall kind of market conditions that are challenging more development, some new items that were added to it included our work on the I o, which were completed on housing day. We will be returning to the Mobile Home ordinance after executing on the community engagement under that direction from Council, from Housing Day later this fall, and then the ongoing work. As I mentioned prior, around further analysis on leasing land and capital so we can better refine our various tools for financing the production of affordable housing. And then our next steps here. Obviously, we've come before City Council on April 1st. We will look to submit the report to HCD and then continuing to provide updates on the team work and the PBCE dashboards. And that is our report for Thank you for that detailed report. Any members of the public. Have no cards. Okay, then. Moving to Council Member Campos. Thank you, Vice Mayor, and thank you, staff, for the presentation and the work to bring this item forward today. I know that while the housing element includes dozens of programs developed in coordination with many members of our community, it is your office PBCE housing staff in particular working on implementing these programs. And for the other work that helps meet the housing needs of our community. Again, I thank you. I'll start with just a few questions. Under the Housing Element Program s 12 eviction prevention activities, this is an essential service to preventing homelessness and keeping people housed, serving hundreds of tenants and landlords and landlords. Last year. Given that this is ongoing and has no specific completion date, how is the city providing sustainable financial support for these services? So we provide eviction prevention work through subcontracts with non-profits who do work in the courts, and a lot of that funding source comes out of our rent stabilization program, which is available dollars there. And that's what I mentioned of additional funds that we're able to invest in that work going forward. Okay. And so staff has identified programs that are designed to facilitate affordable housing development that have been deferred or are now considered not necessary. For example, density bonuses under housing element P four, that's affordable housing tools for North San Jose and some geographic affordability. Housing goals like housing element P nine, which is the Dearborn affordable housing production goal. So with these, you know, noticed changes, have other programs been augmented or have new programs been added to mitigate or offset these changes? So first on on the North San Jose piece, just to clarify a little bit, you know, so it was sort of a, there's kind of a two part work around that. First was we applied the overlays in North San Jose. So we have our mixed income housing overlay and then our 100% affordable housing overlay. And so P four was really meant to sort of augment that work to see how we could continue to produce, you know, additional affordable housing to meet, you know, the higher goal that we have there of 25% of the units. So, you know, we're still seeing how those overlays work. And I think at this time, we don't think that those additional tools like the density bonus tool will be kind of fruitful in seeing new units there. But we do want to keep evaluating it in terms of how it's working. And if we do need to, to look at those other tools. So we're not saying no, we just want to understand how the market works and what's happening there before we, you know, look at those other tools. And then as it pertains to to Dearden, I mean, obviously, you know, there is a changing landscape there. And so I think, you know, continuing to evaluate how we can have an impact there, I think is important. You know, there are a number of other programs, you know, that relate to affordable housing. And I think we continue to look at many ways in which we can we can deliver on on units through, across, you know, I mentioned the 130 programs. So I think it's, it's always about all of the above and how we can continue to advance our goals because ultimately it's about meeting arena numbers, right? Yeah absolutely. I know this council is no stranger to conversations around trade offs. So just wanted to highlight and make sure that staff is doing the work to consider those changes are being made. I just have two more questions between the general plan for year review and adjusting to new and significant state legislation related to housing. My understanding is that PBCE hasn't had the capacity to carry out the work. The workload that standard standardizes or streamlines the permitting, the fees and the applications, like in housing element P ten. So how or what is the city doing to get back on track and make sure that this program isn't falling behind in the timeline as it relates to the housing element? Yeah. No thanks. I think it's a really important point. I mean, our ability to respond to state laws like SB 79 and others has, you know, delayed some of the timelines on our housing element programs. I think the ones that you mentioned, we continue to place a big emphasis on and do want to try to move forward in the next fiscal year. The development fee framework, obviously, is an important one that we feel will have a big impact in terms of housing production. So I think we're you know, we're trying to weigh the the resources that we have. And within those time constraints. But it has impacted our ability to deliver some of these, these timelines because of, of the added work that's been added later through state law. And through the Vice mayor, if I could add to that. So typically in years where the housing production is slowed down because of market conditions and the arena, like we're not able to make as much progress on unit delivery and permitting and construction. I think the focus does switch to that policy work. And how can we move the needle on our policy work and our process improvements that allow for that quick turnaround for projects when they are ready, when the market is ready for that construction. So that is definitely forefront and foremost in our minds. Yes, we have limited capacity and the state unfunded mandates sometimes have to detract from that. So there may be slight delays, but we continue to make progress on them. It just might not be at the pace that we anticipated when we started this work. Thank you both for those responses. And my last question is about the soft story program, our 13, which is another program that has been experiencing setbacks in this case due to federal cuts that were outside of our control. So with the new voluntary pilot taking place this year, will staff be providing updates on participation and whether property owners are taking advantage of the program to the council? Yes. So we will provide updates once the program formally launches towards the end of April, and then we will provide updates on a consistent basis regarding upticks in that program. The addition to the million dollars that council had allocated Congressman Liccardo was able to secure 2 million in federal funds. We're receiving some good news on updates related to the Bric funds available, which is the federal application funds. As FEMA gets back to previous operations. So we'll certainly be providing continuous updates on the implementation of the program. Okay. Thank you. Those are all my questions, and I appreciate your responses. Great. Thank you. Council member. Council member Tordillos. Thank you, vice mayor. I want to start by just thanking housing and planning staff for all of the work that's gotten us to this point. I know that the housing element is an immense undertaking, to say nothing of all of the follow up policy work to actually implement these programs and policies, I think that the city can be proud of the attention and the focus that we've paid towards housing policy in recent years. And I think just earlier today in this session, we saw three projects moving forward through the city's incentive program. So some evidence that the things that we are doing are working here. But I want to make sure that we just don't lose focus of how much work remains to be done here, not just to meet our arena targets, but also to even match our peer cities. I thought it was helpful that staff had that comparison of different jurisdictions with their relative performance and kind of place in the cycle, but looked into a couple of years in particular that I just wanted to highlight. So in 2025, San Jose managed to permit about 34% of our arena goal. And comparing that to San Diego, they had about 56% of their arena goal. And then if you look back to 2023 and 2024, San Diego actually averaged about 68% of its arena goal. So sometimes we hear a talk that these arena targets are just these unrealistic, impossible to reach goals. And I think that if we look at some of the cities that have had more success in incentivizing housing, we can see that while they're not meeting them, they're getting a lot closer than we are. And other cities like Sacramento also fared better. So these are cities that are operating, you know, amidst similar macroeconomic conditions. They're cities that face similar, you know, local and state cost pressures and regulatory environments. So to me, that's hopefully a little bit of optimism that if we continue to focus here, there's more work to still do and more progress to be made. So I hope that this is just a sobering progress report that we can all keep in mind as we continue to focus on housing policy in the years ahead, both in this budget cycle as we continue to implement six cycle housing element program commitments. And as we near the end of the General Plan for Year Review Task force, which is going to have a number of housing related recommendations. So with that, I will move the staff recommendation for item 8.4. Great. Thank you. Council member Kamei. Thank you. And thank you for all your work on this. I know it's very challenging, but we have made some movement. And, you know, I think that that that certainly means that, you know, we're at least going in the right direction. I'm a little bit concerned, you know, in terms of how we're tracking. And, you know, I think to Council Member Tordillos point, we got a long way to go. And I'm already hearing rumblings about seven, you know,