San Jose stares down a $2.6B backlog with no near-term fix

San Jose
City Council Meeting
April 13, 2026

TL;DR

• San Jose's deferred maintenance backlog now stands at roughly $2.6 billion. Another $259 million a year is needed just to keep things from getting worse. Staff said the headline figure is directionally right, not precise.
• A general obligation bond is the city's main tool for problems this size. Staff is now steering toward 2028, not 2026. Polling came back 15 to 16 points short of the two-thirds threshold, and the numbers dropped since the last round.
• City Hall's basement has a $45 million water intrusion problem. Facility staff have already been moved out. One-time funds in the May budget will start the repair.
• The storm sewer backlog jumped from roughly $180 million to about $900 million after a new master plan flagged 17 projects needed over the next 30 years. Staff is exploring a property-based assessment fee.
• Parks needs more than $650 million across grounds, trails, regional facilities, and buildings. The backlog isn't currently tracked by council district.

What happened

1. The repair bill is $2.6 billion, and the usual fix is on hold until 2028
   1. Staff laid out the full picture for the council. The city has $2.6 billion in one-time unfunded infrastructure needs, plus $259 million a year just to keep things from sliding further. Public Works Director Matt Loesch told the council that headline figure is directionally right but not precise: not $1 billion, not $4 billion, but somewhere in that range. Budget Director Jim Shannon said the next general obligation bond, the city's main tool for backlog this size, is unlikely to make the 2026 ballot. Polling on a parks parcel tax and an infrastructure bond came back 15 to 16 points below the two-thirds threshold required. Assistant City Manager Lee Wilcox said the numbers dropped since the last round. Staff is now pointing toward 2028. The last general obligation bond, Measure T in 2018, is nearly spent.
   2. What this means for you: There's no near-term funding path for most of the backlog. Staff said budgetary conditions will eventually improve, and 2% of general fund base spending would cover about half of the $60 million in ongoing unfunded needs flagged in the memo. Until then, the city will keep prioritizing the most urgent projects with one-time funds and financing, and patch what it can.
2. $45 million to stop water from wrecking the City Hall basement
   1. Loesch told the council the City Hall complex has water intrusion in the basement. Facility staff have already been evacuated from the sub-basement due to water and mold. The repair is estimated at $45 million. Staff said the upcoming proposed budget arriving in May will include one-time funds to start design. A financing strategy is expected in the spring.
   2. What this means for you: This is the most concrete near-term project on the list. Construction will be disruptive when it happens. Loesch said the concern is no longer just about staff workspace; it's about the integrity of the building.
3. The storm sewer backlog jumped to about $900 million
   1. The storm system's backlog went from roughly $180 million to about $900 million after Public Works completed phase two of its storm master plan. The plan identified 17 projects needed over the next 30 years. Some involve miles of pipe that need to be upsized or replaced. The system also has 400 outfalls in need of repair, ranging from 18-inch pipes to 60- and 70-inch pipes that connect to creeks and rivers. Staff is exploring a citywide property-based assessment fee to fund storm work, potentially through a mail-in ballot.
   2. What this means for you: Storm work affects flood risk across the city. Staff was careful to say none of the 17 projects are urgent or emergent. They're long-horizon work the city should be investing in, not water rising tomorrow.
4. Elevators, HVAC, and downtown cultural facilities
   1. Thirty-one of the city's 70 elevators need full modernization, at roughly $800,000 to $1 million each. Loesch said staff are soldering parts onto control panels at some libraries because replacement parts are no longer manufactured. The downtown cultural facilities carry about $140 million in backlog, a figure Councilmember Anthony Tordillos flagged in light of the city's sports and entertainment district discussions. At the T-E-C alone, escalator replacement, elevator replacement, and a new roof add up to about $10 million. Councilmember Michael Mulcahy pushed staff to add asset sales and public-private partnerships to the formal strategy list, asking whether the city is the right owner for some cultural buildings.
   2. What this means for you: A working elevator decides whether a library's second floor is open or closed, and one or two library elevators are at that point now. The cultural facilities discussion is the early version of a bigger conversation about which buildings the city keeps owning.
5. The backlog isn't tracked by district
   1. Councilmember Peter Ortiz asked whether the backlog is broken out by council district or by neighborhood need. He noted that lower-income areas like East San Jose rely more heavily on city parks, libraries, and community centers. Loesch said the backlog isn't currently tracked that way and that getting there should be a goal. Ortiz also raised the case of a denied park in District 5 while new parks are going in elsewhere. Parks Director John Cicirelli explained that new parks are paid for largely through fees tied to residential development, with funds geographically restricted, mostly within three-quarters of a mile of the development.
   2. What this means for you: When the city says it can't afford a new park in your area, the answer depends on whether new housing is going up nearby. Operating costs for new parks are folded into the base budget. Capital rehab comes from the Subdivision Park Trust Fund.

What residents brought up

• No members of the public spoke. The agenda allowed public comment on the study session item only, and no one signed up.

Also happened

• Staff walked through the funding-structure framework: dedicated funding with easy rate increases produces little backlog (airport, wastewater, sanitary sewer, water utility); dedicated funding with hard-to-raise rates produces significant backlog (parks, libraries, fire stations, convention center, transportation); no dedicated funding leans on the general fund (animal care, City Hall, police headquarters, cultural facilities).
• The airport's backlog is listed at zero, funded through enterprise revenues, FAA grants, and airline partnerships.
• Parks, Recreation and Neighborhood Services has 47 community centers with staff at about 15. Cicirelli said an inventory review is underway, and historic community pushback has previously blocked sales.
• Councilmember Bien Doan questioned the 40% Public Works soft cost figure. Loesch and Shannon explained Public Works runs on a cost-recovery basis, so its staff time shows up on each project where other departments' costs are budgeted elsewhere.
• Wilcox said the library foundation may be positioned to drive a citizens' initiative signature campaign. The parks foundation is not currently in that role.
• Doan raised the Alma Senior Center HVAC as a safety concern. Cicirelli said emergencies push to the front of the line and that this system was patched five years ago because other systems were failing then.

For any updates or corrections, please email steven@polisdesk.com