City vice mayor briefs pension board on budget focus: homelessness, Measure E reallocation and a pay‑for‑performance proposal

SAN JOSE — Vice Mayor Foley, serving as the City Council liaison to the Federated board, briefed trustees on the city’s 2025 budget process and highlighted two politically sensitive items staff and council are considering: a near‑term reallocation of Measure E proceeds toward homelessness response, and a mayoral proposal to set aside a portion of council pay as incentive‑based compensation.

Foley said the city manager’s operating budget seeks to retain most staff and that staffing adjustments will be phased over two years to give employees notice. “We are still focused in our budget on, several focus areas, public safety, homelessness, affordable housing, and economic growth,” she said.

On homelessness, Foley explained the city is preparing to open roughly 1,300 units of emergency or interim housing this year, and that council is considering using Measure E — a transfer tax on property transactions exceeding $2 million — to front most of the funding to expedite emergency housing projects. She said the shift would temporarily prioritize bringing people indoors and emergency interim housing over longer‑lead affordable‑housing projects; the vice mayor stressed this was a timing and prioritization decision rather than a permanent end to affordable housing programs.

Foley also described a separate mayoral proposal to reserve 5% of council pay as a “pay‑for‑performance” pool tied to annual goals; the council will vote on the measure the same day as the budget (June 10). She said the plan has evolved from an earlier proposal that would have required a charter amendment and noted that details about goal setting and how withheld pay would be restored remain under discussion.

On ORS‑specific items, Foley said the budget includes the staffing realignment the retirement system requested (adding a program manager for compliance and removing the senior auditor position as a net zero head count), and that the city’s budget process includes further amendments that the mayor will publish in a June message ahead of final council adoption.

Trustees asked questions about the state and federal funding risks for housing vouchers and how those streams interact with city responses; Foley advised the board the city is monitoring federal policies that could affect voucher availability.

Foley’s update was informational; trustees did not take any formal action based on the city briefing.