TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Councilmember Tordillos
SUBJECT: Parking Meter and Garage
Rates and Hours.
DATE: September 28, 2026
Approved Date:
9/28/2026
COUNCIL DISTRICT: 3, 6
SUBJECT: Parking Meter and Garage Rates and Hours.
RECOMMENDATION
1. Accept the staff recommendation, with the following adjustments to the City’s Master Parking Rate Schedule for municipal on and off-street parking facilities, authorizing:
a. A parking garage special event flat rate range, at the Market/San Pedro Square, Third Street, Second/San Carlos, Fourth Street and Third/Santa Clara (The Globe) Garages, of $15-$35, effective October 2026; b. A parking garage daily incremental rate, at the Market/San Pedro Square, Third Street, Second/San Carlos, Fourth Street, Third/Santa Clara (The Globe), and Convention Center Garages, of $1.25 per 15 minutes, effective October 2026;
c. The Downtown Employee Discounted Permit Parking Program to provide a 50% discount off the Global Monthly Permit rate for employees working at businesses located within the City’s meter districts and earning a wage no greater than 50% over the city’s current minimum wage, not including gratuities, effective October 2026;
d. A parking meter hourly rate of $3 per hour Monday-Saturday, except Sundays and holidays at meters located within Parking Meter District 1a– Downtown, 2–East Santa Clara Neighborhood, 3–Japantown
Neighborhood, and 4–First and Younger Neighborhood, effective July 2027;
COUNCIL AGENDA: 9/29/26
FILE: 26-1004
ITEM: 5.2
HONORABLE MAYOR AND CITY COUNCIL
9/29/2026
Subject: Parking Meter and Garage Rates and Hours.
e. A parking meter hourly rate of $3 on days/times of operation specified on the meter, at meters located within Parking Meter Districts 1b–South First Street/University, and 5–Arena/Diridon Area, effective July 2027; and f. The extension of 90-minutes free parking to the Convention Center Garage on non-event days, effective September 2026 – June 2027.
2. Direct the City Manager to:
a. Return to Council as part of the FY27-28 budget process with a return-tosource policy dedicating a portion of parking meter revenue to public infrastructure or community improvements in the areas where that revenue is generated, such as Business Improvement Districts with Cityoperated parking meters; b. Return to Council with a long-term parking revenue framework that rightsizes funding for the operation, maintenance, and capital needs of the parking system, and reduces the Parking Fund’s ongoing contribution to the General Fund once the Parking Fund is right-sized; and c. Return to the Downtown Parking Board and cross-reference to the City Council annually with a parking utilization analysis outlining total turnover, utilization, customers, and revenue for special events, meters, and paid garage parking.
BACKGROUND
I want to begin by expressing my appreciation to staff, particularly in the Department of Transportation and the City Manager’s Office, for their work throughout this process. I also want to thank the many District 3 business owners and residents who have been engaged over the past few months in an effort to create a parking rate framework that meets the City’s budgetary needs while supporting our shared vision of a vibrant, flourishing post-pandemic downtown. The recommendations proposed in this memorandum balance both these priorities and enable us to not only close the budgetary shortfall that precipitated the initial discussion around parking meter rates but begin building a modest surplus beginning in FY27-28 to help stabilize the Parking Fund.
This memo recommends a two-year phased approach. In Year 1, effective October 2026, this memo would frontload both the $5 garage event rate increase and the $1 daily garage rate increase proposed by staff. In Year 2, effective July 2027, this memo would increase parking meter rates in all meter districts by $1. Per our estimates, this would by Year 2 produce an annual surplus of approximately $800,000.
As the representative for downtown San José, I am particularly mindful of the impact parking rate changes may have on the small businesses and the workers who make a prosperous downtown possible. These businesses and employees have shared that the extension of meter rate hours to 9pm or an additional rate increase disproportionately targeting the downtown parking meter district could have a substantial negative impact on their ability to work and thrive downtown. While there may be operational
HONORABLE MAYOR AND CITY COUNCIL
9/29/2026
Subject: Parking Meter and Garage Rates and Hours.
considerations around extending meter rate hours that merit discussion, we can and should address the immediate budget shortfall while keeping open the separate, broader conversation around operational parking needs.
In the context of a discussion around parking rates and budget needs, it would also be appropriate for the City to consider how we can right-size the Parking Fund in a way that reduces the General Fund’s reliance on parking revenues. Similarly, we should strive to promote transparency in parking-related decisions by developing an annual analysis for both the Downtown Parking Board and the Council looking at parking utilization and revenues; this analysis can inform future decisions on parking rates in a way that is transparent and enables key stakeholders to have a voice in the process through bodies like the Parking Board.