Airport Commission - Regular Meeting

after 1 30 so we will call today's meeting of the Transportation and Environment Committee to order let's start with roll call please tortillas here compost absent Ortiz absent and chair Cohen here you have a quorum thank you The first item is consent calendar, which has two committee work plan agendas on it. Actually, one, I'm sorry, the consent calendar is just the first work plan. That's our Climate Advisory Commission work plan. Do we have any public comment on this one?

No public comment.

Okay.

Move approval. Second.

All right, let's vote on the consent calendar. Oh, we're just voting by voice?

Is it not showing on here? Oh, there it is. Okay. It's a little slow. All right.

That motion carries 3-0. Thank you so much. Now we have a report to the committee on the Airport Commission Annual Plan.

Good afternoon, members of the T&E Committee. Nice to see you all. My name is Patty Singh. I am the Assistant Director of Aviation at San Jose Mineta International Airport. And with me, I have Matthew Kasmizak, who is our Director's Office Division Manager and also Airport Commission Secretary, who will be introducing the item in your report and work plan. Thank you.

Okay, thank you to any committee and we have a presentation a brief one to report on for the annual commission report. There it is okay, so the annual report for last fiscal year, we have regular items such as the airport capital projects marketing. update air services update and rates and charges, which are regular things that we hear on an annual basis, as you also see there's a. bunch of other items from the super bowl to concessions updates to our master plan which we do go through on an as needed basis and as warranted given our things. Let's move on to the proposed work plan for 2627 our work plan, the overall goal of our work plan is to focus on items that our staff priorities things that are helps the Commission understand the duties in this in areas of the airport. It assists the Commission and carrying out their advisory responsibilities and then makes appropriate use of our staff resources. Oops, sorry, one more. We have four meetings a year. They are on a quarterly basis. As you will see here is we do intersperse those meetings with regular items. Again, the capital project marketing update, air services update, and then rates and charges. And then we intersperse into that items of special need for the airport itself. And those could be anything from our triennial ADBE goals to concession updates, financial updates, land use possibilities, safety items, things that might come before you, the city council. And in addition, all of our commission meetings have legislative updates and updates on noise concerns or community noise feedback and input. And with that, I would ask you to accept our report for last year and approve our work plan for the next fiscal year.

All right, the important question is, are you still sampling concessions that you're

commission meetings? All of our concessions have been upgraded and gone through their refresh cycle, so we've not done anything as of current, but as we open up new ones, we will continue to expose the commissioners to those treats.

Thank you. Do we have any public comment on this one?

Yes, we have two speaker cards. Can the following speakers please line up on the steps in front of the speaker podium? Daya and Martha, you will each have one minute to speak. The timer is displayed on the screen above. Thank you.

Hello. Good evening. My name is Daya Kun Kun, and I'm with Unite Here Local 19. I'm proud to represent over 550 food and beverage attendants and retail workers at the airport. So as you review the airport's work plan today, I ask you to consider the struggles of the airport workers Workers are proud to work at the airport and they are proud to be ambassadors of San Jose. However, many of our members cannot afford to continue living in the city that they are paid to welcome visitors to. So workers are providing similar services under the city living wage are getting paid $7.56 more than those who are servicing the San Jose airport. And this disparity poses a serious threat to retaining experienced workers at the airport and can risk contributing to a downward economic spiral. Neighboring cities, Oakland and San Francisco, have the same living wage calculation for city and airport workers. And this makes sense. Workers are living and working in the city and facing the same rising costs. Thank you. That's your time.

Do we have Martha? Back to the committee.

Okay. Do you have any comments or questions from the committee?

Move acceptance of the report.

Second, but I have a question. Okay. We have a motion and a second, but go ahead, Council Member Trudeaus.

Thank you. Just a quick question for staff. Appreciate the member of the public who came forward to ask the question on the airport living wage. Is that something that would be within the purview of the airport commission's work plan or is there another venue that would be kind of the best avenue to raise future discussions about any changes to the airport living wage?

The airport commission could take under its authority to review the airport living wage, but the airport living wage ordinance is set by the city council. And the airport living wage is $20.52 if you offer benefits as a company, and $21.70 if you do not offer benefits, which is significantly higher than the city minimum wage that is currently offered. um so and there's a there is a difference between the airport living wage and the city uh living wage policy which is what the city itself chooses to to pay to folks who have contracts with the city thank you for that clarification okay so um we have a motion and a second to adopt the work plan and accept the annual report um let's vote

Okay, that motion carries 3-0, thank you so much. And then now we're on to our second report item which is our Energy and Water Building Performance Ordinance Status Update and we'll have folks from the Clean Energy Department come down and present. We'll start with Lori.

Thank you, Council Member Cohen. I'm very pleased to be joined today by Julie Benavente, our Deputy Director of our Climate Smart, as well as Jenna, who is working on our building and water performance report today. And we'll just wait a little bit. I think we're pulling up the slides. Do you have slides? You don't have those slides. There we go. Okay, so this item is a status report on our building and water performance. Today we'll talk a little bit about the background on the program, the compliance process, the data analysis, as well as some of the planned improvements that we're considering over this fiscal year, and then future considerations. And with that, I'm going to turn it over to Jenna to talk about the background on the program.

Hello. My name is Jenna. So, yeah, some high-level overview of what is the San Jose Energy and Water Building Performance Ordinance. It was passed by San Jose City Council in 2018. Some of the idea behind it was that buildings in the City of San Jose account for 29% of community-wide greenhouse gas emissions. The San Jose Building Performance Ordinance supersedes existing statewide benchmarking law, assembly bill, And then in San Jose, the ordinance applies to roughly 1,800 covered properties, including city-owned buildings with a gross floor area of 15,000 square feet and above, as well as privately-owned commercial and multifamily buildings with a gross floor area of 20,000 square feet and above. And some of the intended goals behind the building performance ordinance when it was passed was to support climate smart San Jose goals of emission reductions in the existing building stock and conserving water, as well as energy and water efficiency within the existing large building stock, reducing utility costs for property owners and promoting high compliance rate and data transparency. So just some more background, annually there is a $150 fee applied to San Jose property owners that have to comply with the ordinance. This $150 amount was set when the ordinance was passed in 2018 and it goes towards covering one full-time energy department staff plus energy and finance department support staff as well as customer management software. our online map and our mailing and outreach costs. To achieve the data transparency goal of the ordinance, we have published an interactive San Jose building performance ordinance public disclosure map, which is available on our webpage. And we also upload the building performance ordinance data to the city's open data portal. And now just to get A little bit more into the compliance process for San Jose property owners that have to comply with this ordinance. There are two main requirements. The first is the annual benchmarking report. So annually, property owners have to submit previous calendar years energy and water data to us at the city for their property. using an online platform called Energy Star Portfolio Manager. And then I just also want to make the note that annual energy benchmarking is already required under the statewide benchmarking law, Assembly Bill 802. Ours differs in that we have a lower square footage threshold than the state. The state is 50,000 square feet and above. Ours is 20,000 square feet and above. The state only requires energy benchmarking. In the city of San Jose, we require energy and water benchmarking. And then the other main requirement for property owners in San Jose is a process called beyond benchmarking. Beyond benchmarking happens every five years. And it requires the property owner to look back at their benchmark data over the years and determine whether they're meeting certain ordinance outlined efficiency metrics for energy and water. If they're meeting the efficiency metrics, we call that the performance pathway. If they are not meeting the ordinance outlined efficiency metrics, we call that the improvement pathway. Their options for the improvement pathway are to do... utility audit at the property or do a retro commissioning report at the property or show that they've implemented two efficiency improvement measures at the property. And energy and water are treated separately so they might meet the performance pathway for energy but have to do The improvement pathway for water and just to speak a little bit to audit versus retro commissioning so an audit is essentially a report that lists out the ways of property could improve their energy and water efficiency at the property. after a qualified individual assesses the existing building systems and what's happening at the property. Retrocommissioning is fine-tuning a property's existing building system so that they run more efficiently. So hiring a third party company or individual is not a requirement for the annual benchmarking process for property owners. It is a requirement in most cases for beyond benchmarking compliance. With the special caveat that if the property has already done an audit retro commissioning report or implemented two efficiency improvement measures within the last five years of their compliance due date, then they don't need to hire a provider to do this work again. We also have extensions and exemptions available for both the annual benchmarking reports and the beyond benchmarking process. For example, situations like vacancy, financial distress, properties that are majority manufacturing or controlled experiments, et cetera. This just highlights more about beyond benchmarking. As I mentioned before, it is every five years for property owners. As I mentioned before, right now there are roughly 1,800 properties in San Jose that have to comply with this ordinance. Not all 1,800 are going at the same time. We broke it up into cohorts based off of the property square footage and the last digit of their assessor parcel number. And so, as you can see here, roughly 220 properties went in 2023, which was the first year Beyond Benchmarking was implemented. And then in 2024, roughly 380 went. For those that went in 2023, the first time they will do it again is in 2028. So now I'm getting into some of the data analysis that we did. So in the last three reporting years, 2023 through 2025, we've had an 87% average benchmarking compliance rate. We've had a 71% average beyond benchmarking compliance rate. And we have received about 7% exemptions for the annual benchmarking report. And then about 13% beyond benchmarking exemption rate. San Jose tends to have one of the higher compliance rates across the state. For example, in 2025, our compliance rate was 24% higher than the state's. The statewide benchmarking compliance rate, 20% higher than San Francisco's and 15% higher than Berkeley's. This map is just to highlight that there are at least 58 US jurisdictions that have adopted a benchmarking ordinance across the country, including Denver, Chicago, San Diego, and Los Angeles. okay now getting into some beyond benchmarking analysis of all beyond benchmarking submittals that we received between 2023 and 2025 50 percent were exclusively the performance pathway meaning they showed these properties showed energy and water efficiency 26 percent were exclusively the improvement pathway so they did an audit retro commissioning or efficiency improvement measures, and 24% were a mix of both pathways, meaning they did one for water, one for energy. Of those that did the improvement pathway, 89% chose to do a utility audit, 10% chose to implement efficiency improvement measures, and 1% chose to do a retro commissioning report. And in the current ordinance, conducting an audit for beyond benchmarking compliance does not require the property to implement the efficiency improvement measures recommended in the audit. You know, as staff, we do recommend that the property owner do so to meet the performance pathway during the next cycle, five years thereafter, but it is not required. implementing the recommended efficiency improvement measures could lead to a return on investment once the efficiency gains are realized. And some of the efficiency improvement measures we've seen implemented at the properties include indoor lighting controls such as occupancy sensors and dimmers, hot water pipe insulation, chiller efficiencies and controls, smart thermostats, LED lighting upgrades, etc. So, based on the submitted data to the city, there has been a 12% reduction in median energy use intensity across covered properties. There has been a 9% reduction in median water use intensity, a 10% increase in median ENERGY STAR scores, and ENERGY STAR score is a score of 0 to 100, 100 being most efficient. So based on the data above, covered buildings have reduced energy consumption by an average of 2.4% annually, in line with other benchmarking program data across the U.S. We do not know the full impact of Beyond Benchmarking yet, as it has only been the first compliance year, 2023 throughout 2026, for covered properties, and the first repeat check-in will be 2028, for those that went in 2023. Okay, and then... Since calendar year 2019, median greenhouse gas emissions per building have decreased by 35% of our covered properties. Total greenhouse gas emissions per square foot across all reported covered properties has decreased by 38%. And we believe there are likely multiple causes contributed to this reduction besides this ordinance alone. So these are some improvements that are planned for implementation in this fiscal year 26-27. We intend to survey building owners on beyond benchmarking impact, planned upgrades, and how the city could further provide assistance. We intend to update the ordinance to add more options and flexibility to the list of efficiency improvement measures that a property could implement. We intend to create covered building case studies to facilitate information sharing among building owners, and we intend to facilitate covered building action by connecting them to available incentive programs and increase coordination with San Jose Clean Energy Outreach. So some options for future consideration. Over the next fiscal year, we will evaluate a variety of options, including best practices from other cities, streamline and or reduce the cost of compliance for property owners. And some of those ideas are listed out on the slide. I won't go through all of them. And then we also will look at updating the ordinance to add a reduction in on-site greenhouse gas emissions as a performance pathway option, require emission reductions and increased energy efficiency over time in the form of a building performance standard policy, which would replace the current ordinance. We will also look at upgrading an option in the improvement pathway by developing a San Jose clean energy pilot program for commercial customers around smart thermostat incentives. And we will also analyze submitted beyond benchmarking audits to evaluate projects, energy and cost savings potential, and where the city can focus efforts to support energy saving projects. And we may look at additional options during this analysis. And then lastly, as part of... Yeah, we did some coordinated work with the city manager's office as part of the development of standards for data centers and large energy customers in the city. City manager's office staff will review the building performance ordinance and determine any additional recommendations to the ordinance. These standards are scheduled for city council in December 2026, and any recommendations will be discussed at that time.

So thank you very much. We're open for any questions.

Thank you so much for the great report. Do we have public comment?

Yes, we have one speaker card. Jordan Moldau, please make your way down to the speaker podium. You'll have one minute to speak. Thank you.

I appreciate this program and especially the public dashboard, which lets me look up my own apartment complex to see how well it's doing. I think all the implementation options sound good. I especially encourage implementing number four, requiring reductions in efficiency over time. I'd also ask that you require remediation if a building is trending in the wrong direction without having to wait five years before telling them that they're not doing well and then having to turn around As an anecdote, my building was built in 2016 and recently for some reason switched from water submetering to ratio billing, which reduces all of our incentive to save water. And I looked at the dashboard and my building has gotten almost two times worse at water efficiency over the past two years. So I'd also ask when we're looking at possible new ordinances to pass, we should restrict ratio billing in more cases. It's currently restricted for rent-stabilized units and buildings newer than Thank you.

Back to the committee.

Thank you. Start with Councilmember Ortiz.

Thank you so much for the presentation. Really appreciate the robust information that you provided and just this work in general. It's important that as we continue to build in the city of San Jose, we do in a way that's sustainable for our future generations. I had a few questions. So in regards to compliance and the set of standards that we review for buildings, and then also I think you laid out different audit processes that city staff conduct as these buildings are being measured. What does that process look like? And I guess my question would be, does the property owner or the developer pay for these audits and these compliance meetings, or is the city covering that? What does that look like, I guess?

So in terms of a cost question, the property owner does pay the fee and any cost of an audit.

Okay, how much would that be?

Do you have that number? I think while she's pulling it up, the cost of an audit varies. They have a number of providers they can get quotes for, but we still have some average costs.

Yeah, so in October of 2024, we asked six companies that provide utility audits for quotes to get a sense of pricing for Beyond Benchmarking. Yeah, and as Lori mentioned, it's really dependent on each individual property, property type, how big they are, their current situation, et cetera. So it does vary, but we found that the median energy audit costs $5,750, but the range we received was $1,200 to $15,000. Water audit alone, the median is 3,500. The range we received was 1,000 to 10,000. If a property is doing an energy and water audit together, the median was 10,500 with the range we received from 1,600 to 15,000. And yeah, those are audits.

Is there only, thank you for that. I was expecting it to cost a lot more, so happy to hear that at least it's, for the most part, it's more in the single or early double digit cost, because what I would, all this is important, but sometimes as we pursue sustainability and environmental protections, putting on more stringent, robust compliance on buildings can be a deterrent to development. And so just wanted to make sure that we were keeping those costs somewhat low and it does look like we are. I guess my next question would be, is there like a threshold for I guess how big a property is for what they would need to go through this process? Are we doing this for every single property that's being developed from now moving forward? Oh, 20,000 square feet. Okay, 20,000 square feet.

Yeah, the ordinance applies to privately owned commercial and multifamily properties that are 20,000 square feet and above, city-owned properties that are 15,000 square feet and above. And yeah, important note that it's for existing properties, so they have to be occupied for at least five years before they end up doing the Beyond Benchmarking process. So it's not for new construction, just existing building stock. And the annual energy and water benchmarking reporting can start as long as they have a full calendar year of energy and water data and normal occupancy levels at the property.

And I saw that in kind of like in your next steps, you're going to be comparing our processes and outcomes to kind of national statistics. Am I correct?

Yeah, that's correct. We want to take a look and see if there's opportunities that we can learn from other cities. And as you said, our goal is to lower energy use, lower emissions, but we're not trying to increase costs on our building owners. And one potential cost saving could be virtual art audits and the use of AI. We need to look at that. But that's a potential cost savings.

Also, it'd be interesting to see if other municipalities across the country are using AI and what, you know, because sometimes AI messes up, and so what they're using to flag those type of things to make sure nothing funny goes into there. Okay, well, I appreciate your guys' questions. I'm looking forward to the conversation around data centers. Thank you.

Thank you. I'm going to just have a few questions and comments, but I want to thank you for the work. It's showing results. I mean, we're seeing on your slide the reduction in both water use and energy use over time. Obviously, as you pointed out, it's not just because we're doing the audits. I think there's reasons why properties want to do these things anyway. They want to reduce their energy use and their water use. It saves money. So if they get a, you know, if they're, and then it can show positive results in their audit and At the end of the day, that's a side benefit for them, but it's not necessarily their primary impetus. But this is an important tool for us to hold properties accountable because the second, other than transportation, the largest greenhouse gas emission source in our city and probably anywhere are existing buildings. And so we do have to address those, and this is a good way to track it. I just have a question about the audit options. you know, a high percentage of folks are saying, well, I'll get an audit, and maybe that gives them some ideas about what they might do in the future, right? What happens in the second five-year cycle? So if they complied in the first cycle by doing an audit, and then they don't implement anything, and then five years later, it shows that they need to comply again, are they able to just do another audit five years from now, even though they already had an audit and they didn't take any action?

Yeah, that's a great question. One thing I just wanted to point out on slide nine, actually more than half are showing energy and water efficiency. So that's 50%.

Only half the properties are required to do anything because the other half are actually meeting our benchmarks.

Right. Right. So those that meant it, they're good. And then of those that are not, about 26%, you know, chose this improvement pathway. And, you know, most of those, almost 90%, are doing an audit. Yeah, and yeah, so your question is, if they don't take any steps, I think the answer, but correct me if I'm wrong, is that they can continue to do the audit, right? And so that's where, you know, an additional ordinance, such as that we are going to look into this year, a performance standards ordinance, which requires certain efficiency, would be something council could consider to take the step to actually require them to do something.

Makes sense to me that five years after they start, that if they need to do an audit, they do an audit, but then 10 years into this process, that they should have taken some action over that 10 years, and if they haven't, and they just, doing another audit is not necessarily, you know, if they're just checking a box, it's not necessarily achieving our goals. So just something for us to think about. Do we have data that shows how the results in terms of being performance versus needing improvement and all these numbers, how they vary by type of property and size of property. So type of occupant. So certain kinds of businesses might do better than others. Certain industries might do better than others. Certain sizes might perform better than others. Do we have that data?

We do have the data, but we haven't done the analysis. So it's a great question. It's something we'll certainly look into this year, I think. And anecdotally, we notice differences, you know, we know some of our large tech companies are really proud of their performance and really like this ordinance because their buildings are performing very well. But it's certainly something we can pull and look at. I think it would be interesting to look at that to connect them to programs potentially. You know, that's another thing that we want to do this year is really reach out to building owners, particularly those that aren't performing and understand what the barriers are, so that we can hopefully design programs that help them improve their efficiency.

It might help us target programs and funding sources to certain types of properties, depending on what kinds of properties perform well and which ones don't. I know that, and the same kind of thing as we get into our data center conversation, but in general, our tech companies seem to want to have bragging rights to be the greenest they can be and to out green each other so obviously they like the audit because they can say hey look we're doing so well um so I'm just curious if the data bears that out and if and also what types of businesses might not be doing so well that we have to pay more attention to so thank you well maybe something to think about for next year's report is to have that kind of data in there yeah we'll certainly take a look at that it's a great point okay thank you council members radius

Thank you, Chair. I just wanted to echo your comments about preventing some of these folks from just repeating audits in multiple cycles. This moves on a five-year timeline, is that correct? Yeah, so as we approach 2028 with the kind of first cohort of, you know, subset of units that went through this program, it makes sense to see if we can revisit and say, you know, if you've already been through the cycle once, your subsequent cycle, you know, you can pursue the performance path and show that you're demonstrating meeting the metrics, or you can take the improvement path, but it has to be something other than or above and beyond just an audit for the subsequent paths. Thank you.

Yeah, and just to be, to repeat what I think you said in the presentation, one of the ways they can comply is to show that they took two actions. So the audit should have showed them several actions they can take, and they don't have to necessarily have the results, they just have to say, hey, in the last five years, we've done two things that the audit said we should do. So it shouldn't be incredibly difficult to comply other than doing another audit, so thank you.

Yeah, you're correct. There should be options there for them to take a look at, and that should save them money. But that's why we want to reach out and just understand what those barriers are, you know, why they're not doing that.

Thank you. All right, that's our compass.

Thank you chair and to my colleagues for the conversation and to staff for the presentation. I appreciate the inclusion of data centers in this report. I know when we were originally going to hear it, it didn't include it. And so I'm very grateful that we see the importance of making sure that there's space for that conversation. So my question is to this end, Will staff please clarify if the proposed data center uniform standards that we're currently undergoing that process with our community on, will they be included in the new and stronger regulations that will be incorporated into the building performance ordinance or will those data center uniform standards not be included with any new stronger regulations for data centers?

Thank you, Council Member Campos, Manuel Pineda, Deputy City Manager. So as part of the data center standards, we are going to be looking at building performance ordinance, and we're going to come forward with recommendations to the council in December as to what modifications can be made to include data centers as part of the audit process. So that would be what we're proposing to do. We already met with the team once previously. We have actually another meeting this Friday to follow up on what the options will be. So we'll come with you in December with options.

Excellent. I appreciate that update. Thank you.

All right.

Move acceptance of the report. Second.

All right, we have a motion to second. And just on that one item, any site that's larger than 20,000 will be required to do this audit, I mean, this performance, correct? Just to make sure. I mean, so there should be no exemptions to that. There are no properties exempt, right?

So council member, there are some current exemptions to the policy by land use as well as other things they can expand on that. So one of the things we'll be looking at is to make sure that as we move forward data centers that all data centers would be required to the audit process without exemptions. That's one of the key things that we're looking at as part of the team.

Okay, I assumed that all big properties were required to follow this reporting process.

No, there's a number of exemptions in the ordinance, as Jenna pointed out and as Manuel said. You know, one of them is the type of business, also vacancy, financial distress, things like that.

Those are separate from this. Yeah, yeah. Okay, thank you. All right, let's vote on this item. Okay, well, that motion carries 5-0, so we're on to our open forum. Do we have public comment?

Yes, we have two speaker cards. Can the following speakers please line up on the steps in front of the podium? Jordan Moldau and Kun Jal. You will each have one minute to speak. Thank you.

Good afternoon, Chair and the committee members. My name is Kunjal Shah and I currently live in District 4 in the Northeast San Jose Barriessa area. I have OCD and depression that significantly limit my transportation options and I am unable to drive. I work in Santa Clara, so affordable and reliable transportation is essential for me to get to work and participate in the community as well. At the moment, there is no microtransit service available in the Northeast San Jose or North San Jose area. There is this major gap. Santa Clara and Cupertino have Silicon Valley Hopper and East San Jose is getting the La Palante microtransit service. But North San Jose and Northeast San Jose do not have any equivalent. So my request today is, please consider North San Jose and Northeast San Jose as a priority area for microtransit service pilot or expansion. For residents with disabilities like me who cannot drive, this is not just a convenience, this is bare minimum access to employment.

Thank you. Next speaker.

On a not unrelated note, next month is transit month and the first week of October is week without driving. So I'd encourage council offices and staff to consider doing stuff for transit month and week without driving. I'd also like to speak briefly about Ewert Road, which is the road that goes around the northern edge of the airport and is slated to be closed. Right now it has a bike lane, which is very useful for bicyclists who are commuting who need to get around the airport. It's been open for 30 years since that road was first created. I have an open letter. I'll send it to you later. Over 100 local residents have signed asking that the bike lane be kept open in perpetuity for easy commuting and also to get around floodwaters when the Guadalupe River underneath Highway 101 floods during the rainy season. Thank you.

Thank you. Back to the committee.

All right. Thank you so much. We are adjourned at 2.13 p.m.