San Jose staff say deferred‑maintenance backlog totals about $2.6 billion and urge new funding strategies

San Jose city staff told the City Council in a study session that a newly updated Deferred Maintenance and Infrastructure Backlog (DMIB) inventory lists roughly $2.6 billion in one‑time unfunded needs and about $259 million in ongoing annual funding required to prevent further deterioration.

The presentation, led by Public Works Director Matt, outlined the DMIB as an inventory of repairs, upgrades and replacements across city assets — from parks and libraries to storm and sanitary systems — and emphasized safety, service continuity and environmental risk as the core rationales for investment. “If you gave us $2,600,000,000 today, we'd solve all these problems,” Matt said during the presentation, noting staff treat the number as a high‑level estimate rather than a precise accounting.

The report shows a particularly large increase in the stormwater backlog after completion of a Phase 2 master plan that identified 17 major storm projects; staff said the storm system backlog now approaches $900 million over a 30‑year planning horizon. Matt said many storm projects involve large outfalls and work in creek channels that require extensive permitting and short seasonal work windows.

City Hall itself was highlighted as a near‑term priority: staff estimated about $45 million is needed to repair water intrusion and mold issues in the complex’s sub‑basement and to protect the integrity of the building. “We need to set forth getting working on that soon,” Matt said; staff proposed moving design work into the next fiscal year and returning in the spring with financing options.

Elevators and other building components were a recurring focus. Staff said the city owns about 70 elevators and that 31 require modernization; the presentation characterized per‑elevator modernization as a substantial, six‑figure cost (staff clarified this as roughly $800,000 per unit rather than the erroneous nine‑figure figure read during the meeting). Several library elevators are in urgent need of work and, in some cases, modernization is required for buildings to remain usable.

City Budget Director Jim Shannon outlined fiscal strategies to address the backlog: prioritize one‑time funds for urgent projects, use a mix of one‑time allocations and financing for large work, pursue grants and explore alternative tools such as enhanced infrastructure financing districts or public‑private partnerships. For the storm system specifically, staff said they are actively evaluating a property‑based assessment fee that could be placed on the ballot and are also continuing to assess the viability of a general‑obligation bond for assets without dedicated revenue.

Senior staff cautioned that polling shows limited near‑term political viability for a large bond. Assistant City Manager Lee Wilcox said recent polling left proposed measures “15 to 16 points away from the two‑thirds threshold,” and recommended more community engagement and a multiyear education effort before a major bond measure. Staff said the city is tentatively looking at a viable bond effort in 2028 rather than 2026.

Council members pressed staff on equity and geographic impacts. Councilmember Ortiz asked whether the backlog is tracked by district and whether prioritization accounts for higher use in disadvantaged neighborhoods; staff said a district‑level slice is not in the current report but that they will work to provide district views and better public dashboards. Council members also asked about selling or repurposing underused assets and using public‑private partnerships to reduce the city's long‑term cost of ownership.

On immediate life‑safety or critical repairs, staff described existing options: some projects can be addressed through capital funds such as construction and conveyance (CNC) or park trust funds, reallocation of one‑time dollars, or through general‑fund infusions when necessary. For smaller urgent projects (staff estimated some HVAC replacements at certain community centers are less than a few hundred thousand dollars), departments try to reprioritize capital or use district‑dedicated funds.

The presentation closed with staff committing to provide more granular reporting and district‑level data over the next 6–12 months and to deliver targeted lists of top projects for budgeting cycles. There were no formal votes or motions at the study session; the meeting adjourned after no public commenters appeared.