The city’s problems with Team San Jose are coming to a head. Last Wednesday, City Finance Director Scott Johnson sent a notice of default to CEO Dan Fenton, denying it access to municipal funds. TSJ had overspent its budget by $750,000.

San Jose City Councilmember Sam Liccardo has long complained that Fenton and TSJ had made unreasonable demands from the city, and noted that their annual budget had risen from $14.9 million in 2007-2008 to $24 million in 2009-2010, although activity in the Convention Center and other properties under TSJ had decreased. Notice of last week’s default was what Liccardo called, “something of a wake-up call for the council.”

Among the issues that Liccardo is challenging are the skyrocketing subsidies that TSJ is receiving from the city and transparency, even with regard to the Team San Jose board. A Santa Clara County Grand Jury recently found that subsidies provided by the city were double what San Jose had originally agreed to cover, and rumors that, “the full board is not being informed” of what is happening in practice.

A decision whether to expand the audit will be discussed at the meeting of the city’s Rules Committee on September 1.
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