TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Jim Shannon
SUBJECT: See Below DATE: August 31, 2026
Approved
Date:
9/8/26
COUNCIL DISTRICT: 6
SUBJECT: Actions Related to the Reimbursement of Approved 2025-2026 Capital Repairs at the SAP Center
RECOMMENDATION
Adopt the following 2026-2027 Appropriation Ordinance and Funding Sources Resolution amendments in the San José Arena Capital Reserve Fund:
(a) Increase the Unrestricted Beginning Fund Balance by $1,828,062;
(b) Increase the Electrical Repairs appropriation to the Office of Economic Development and Cultural Affairs by $404,827;
(c) Increase the Mechanical Repairs appropriation to the Office of Economic Development and Cultural Affairs by $1,011,945;
(d) Increase the Miscellaneous Repairs appropriation to the Office of Economic Development and Cultural Affairs by $399,743; and
(e) Increase the Structures Repairs appropriation to the Office of Economic Development and Cultural Affairs by $11,547.
SUMMARY AND OUTCOME
Approval of the recommendation in this memorandum will enable staff to authorize payment to San Jose Arena Management for reimbursement of approved capital repairs completed in 2025-2026. Under the Third Amended and Restated Arena Management Agreement (Management Agreement) between the City of San José (City) and San Jose Arena Management, effective July 1, 2025, the City shall make payments to San COUNCIL AGENDA: 9/22/26
FILE: 26-966
ITEM: 2.7
HONORABLE MAYOR AND CITY COUNCIL
August 31, 2026
Subject: Actions Related to the Reimbursement of Approved 2025-2026 Capital Repairs at the SAP Center
Jose Arena Management within 60 days after receipt of an approved reimbursement request.
BACKGROUND
The City received a reimbursement request from San Jose Arena Management on August 13, 2026, for $1,828,062 in approved capital costs incurred at SAP Center in 2025-2026. The 2026-2027 Adopted Operating Budget for the San José Arena Capital Reserve Fund totals $900,000 for capital projects to be completed in 2026-2027.
Savings from capital projects approved for 2025-2026 and not yet completed have not yet been carried forward or rebudgeted into 2026-2027 as part of the 2025-2026 Annual Report that is anticipated to be presented to the City Council for review and approval on October 20, 2026. Therefore, the existing appropriations in the San José Arena Capital Reserve Fund are not sufficient for making the reimbursement payment to San Jose Arena Management within the 60-day timeline as stated in the Management Agreement.
ANALYSIS
The rebudget actions recommended in this report increase the available 2026-2027 appropriations in the San José Arena Capital Reserve Fund and thereby allow the City to issue a payment to San Jose Arena Management within 60 days of receipt of the reimbursement request in accordance with the terms of the Management Agreement.
The 2025-2026 savings would have otherwise been presented for rebudget as part of the 2025-2026 Annual Report scheduled for City Council review and approval on October 20, 2026. The capital project costs submitted for reimbursement are consistent with the 2025-2026 capital budget previously approved by the City under the terms of the Management Agreement.
EVALUATION AND FOLLOW-UP
No additional follow-up action with the City Council is expected at this time.
FISCAL IMPACTS
The recommended budget actions include recognizing savings from 2025-2026 in the 2026-2027 Unrestricted Beginning Fund Balance of the San José Arena Capital Reserve Fund in order to offset the increases to the expense appropriations. There is no impact to the 2026-2027 Unrestricted Ending Fund Balance in the San José Arena Capital Reserve Fund.
HONORABLE MAYOR AND CITY COUNCIL
August 31, 2026
Subject: Actions Related to the Reimbursement of Approved 2025-2026 Capital Repairs at the SAP Center
BUDGET REFERENCE
The table below identifies the fund and appropriations to fund the recommendations as part of this memorandum.
Fund
#
Appn.
#
Appropriation
Name
Total
Appropriation
Rec. Budget
Action
Amt. for
Payment
2026-2027
Proposed
Operating
Budget
Page*
Last Budget
Action
(Date, Ord.
No.)
459 R999 Unrestricted
Beginning Fund
Balance
$351,879 $1,828,062 N/A 947 06/16/2026
26-205
459 7567 Electrical Repairs $175,000 $404,827 $404,827 947 06/16/2026 31336
459 7568 Mechanical
Repairs
$395,000 $1,011,945 $1,011,945 947 06/16/2026
31336
459 7569 Miscellaneous
Repairs
$55,000 $399,743 $399,743 947 06/16/2026
31336
459 7570 Structures Repairs $75,000 $11,547 $11,547 947 06/16/2026 31336
* The 2026-2027 Proposed Operating Budget was approved on June 9, 2026, and adopted on June 16, 2026, by the City Council.
COORDINATION
This memorandum was coordinated with the City Attorney’s Office.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the September 22, 2026 City Council meeting.
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No board, commission, or committee recommendation or input is associated with this action.
HONORABLE MAYOR AND CITY COUNCIL
August 31, 2026
Subject: Actions Related to the Reimbursement of Approved 2025-2026 Capital Repairs at the SAP Center
CEQA
Not a Project, File No. PP17-004, Government Funding Mechanism or Fiscal Activity with no commitment to a specific project which may result in a potentially significant physical impact on the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
Jim Shannon
Budget Director
I hereby certify that there will be available for appropriation in the San José Arena Capital Reserve Fund in the Fiscal Year 2026-2027 moneys in excess of those heretofore appropriated, wherefrom, said excess being at least $1,828,062.
Jim Shannon
Budget Director
For questions, please contact Jennifer Tell, Capital Budget Development Manager/Assistant to the City Manager, City Manager’s Budget Office, at [email protected].