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San Jose council liaison tells Federated board city faces budget shortfall, hiring freeze and interim District 3 appointment

2153055 · January 16, 2025
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Summary

Council member Pam Foley, newly appointed as the board’s city liaison, briefed trustees on a projected city budget deficit tied to lower sales tax, a targeted hiring freeze that spares public safety, and the process to appoint an interim District 3 councilmember ahead of a special election.

Pam Foley, the city council’s newly appointed liaison to the San Jose Federated Retirement System board, told trustees Jan. 16 that the city is preparing for a budget gap driven largely by a drop in sales-tax revenue and has directed some departments to institute hiring freezes.

“Public safety, homelessness, [and] blight” remain the city’s top financial priorities, Foley said, and the hiring freeze is aimed at protecting core services. She told trustees some departments — including police and fire, and certain public-safety-adjacent functions such as rangers and animal-care services — are being “held harmless” from the freeze.

Foley said the mayor will present a budget message and that city finance staff are working to craft options to maintain core services while narrowing the projected shortfall. She warned trustees that payroll reductions or department-specific cuts would affect the pension and OPEB funding streams and that consultants would examine those effects in future valuations.

Foley briefed trustees on a separate city process: the City Council is appointing an interim District 3 councilmember to serve roughly six months until election results are certified. She said the council will interview candidates at its Jan. 28 meeting and requires a supermajority (seven votes) to forward an interim appointment; the appointee has, in this case, committed not to run in the special election so as not to gain an incumbency advantage.

Foley said 11 applications were received for the interim slot and that the special election schedule includes a primary in early April and a general in June, with certification expected about 30 days after the general. She asked trustees to consider the city’s broader fiscal constraints when reviewing future plan-related items; trustees responded with welcome comments and no formal action.

Trustees did not vote on Foley’s remarks; the liaison’s briefing was informational and the board moved on to other committee business.