March 22, 2011

San Leandro Mayor Stephen Cassidy's 2011 State of the City

The charter of the City of San Leandro states that one of the duties of the Mayor is to "report to the public from time to time on the affairs of the City." On March 21, 2011, Mayor Stephen Cassidy gave his first State of the City Address, fulfilling this Mayoral role. The complete text of the speech follows. The Powerpoint slides are available at http://www.sanleandro.org/civica/filebank/blobdload.asp?BlobID=8141. The video of the speech is missing the first minute.

Good evening. The duties of Mayor include reporting to the public on the affairs of the City. I am honored to give the State of the City Address for 2011.

President John F. Kennedy stated, “One person can make a difference, and everyone should try.” We are fortunate in San Leandro to have so many people that believe in the value of public service. It’s my privilege to serve as one member of a seven person City Council. Each Councilmember possesses the skills, determination, sound judgment, and experience to take on the challenges facing San Leandro in these tough times. Each Councilmember is not only a leader in our community, but also represents the interests of San Leandro on the board’s of inter- governmental agencies that address a wide range of county and regional issues.

In his State of the Union Address in January, President Obama said that the nation is “poised for progress...the stock market has come roaring back...corporate profits are up...the economy is growing again.” I too believe there are many signs of recovery and progress here in San Leandro, which I will discuss later in my speech. However, we must accurately list our challenges and proactively address them to create a solid foundation for growth and progress in the coming years.

Our first challenge is that far too many San Leandrans are unemployed. The unemployment rate remains over 10%, down only one percent from a year ago. In this category we are no different than nearby cities in the county. Berkeley, Oakland, Hayward, Newark and Union City each have double digit unemployment rates.

Job creation must be one of our top priorities. Our City can play a strong role in helping get San Leandrans back to work by promoting sound and sustainable business development and supporting existing businesses.

This takes me to our second major challenge: the City’s budget deficit. To help put San Leandro on the path to recovery and prosperity, we must first restore our City government to fiscal health.

Sales tax continues to be San Leandro’s largest General Fund revenue source. Retail sales in San Leandro are showing growth, but the growth is slow and we are being very conservative in our projections for next year. Our second largest source of revenue comes from property taxes. While property tax revenues are no longer falling, we also do not expect any increase in property tax revenues next fiscal year.

Despite the stagnant revenue growth, the City Council Finance Committee, City Manager, Assistant City Manager, Finance Director and staff are committed to presenting to the full City Council in May a budget for fiscal year 2011-12 that is truly balanced. The budget will not rely on transfers of one-time only funds to pay for ongoing expenses.

Let me acknowledge that the passage of Measure Z last November by the voters of San Leandro will play a significant role in eliminating the budget deficit next fiscal year. The added revenues from the seven year, 1⁄4 cent sales tax increase, which goes into effect on April 1, have allowed us to save a Fire Department ladder truck and the firefighters that go with it, maintain Police Department staffing, keep two branch libraries open, and avoid deeper service cuts.

While the City will be operating in the black on July 1, 2011, a preliminary five year forecast for the General Fund shows the budget deficit reappearing as soon as July 1, 2012, and increasing every year thereafter. In short, despite the additional revenue from Measure Z, expenditures are projected to grow faster than revenues.

This takes me to our third major challenge: we must address the long-term structural causes for the City’s budget deficit. The margin of error in our City budgeting is razor thin. The Great Recession has taken its toll on City reserves for economic uncertainties. They have dropped by 86% over the past four years and must be rebuilt.

We need to take action now and specifically create ongoing savings in the 2011-12 budget. This will help us balance subsequent budgets without resorting to draconian cuts or further increases in the sales tax. After all, why develop multi-year budget forecasts if we do not use the data in the present to adjust our spending and avoid threats to our solvency in the future?

In particular, to create a sustainable City budget – and by that I mean a budget that reflects the priorities and values of our community, allows us to rebuild our reserves, and keeps us far from any Vallejo-type fiscal meltdown – we must examine the cost of retirement benefits provided to City employees.

Some refer to this as “pension reform.” It’s a term that has no agreed-upon definition. Some use the term when they actually seek to eliminate pensions for public employees. I do not support that. Instead, I prefer the phrase “pension sustainability.” City employees work hard and are working as hard as ever since all departments have lost staff. I respect their right to bargain collectively. They deserve our respect, as well as their pension at the end of their service.

We need to recognize that one of the principle challenges for all local government in the years ahead is how can we provide quality services despite stagnant revenues. Achieving pension sustainability is an important part of meeting this challenge as projected increases in the annual bill the City pays CalPERs for employee pension benefits are a substantial impediment to maintaining our City’s fiscal health. As Kasim Reed, the mayor of Atlanta, has stated, “It is time to begin having the types of mature and honest conversations necessary to deal effectively with the new economic realities we are facing as a nation. We simply cannot keep kicking the can down the road.”

I invite the community to come to a City Council Work Session on Monday, April 11, at 6:30 p.m., where we will have a presentation on the City’s pension and retiree health care liabilities and start discussing solutions to the City’s long-term structural deficit.

I am confident that through dialogue and negotiation, we can preserve vital City programs despite our fiscal challenges. I believe we can do this with the continued help and hard work of all of our City departments, and with the support of our employee groups.
The final challenge I wish to discuss is the Governor’s plan to eliminate all Redevelopment agencies in California. Even though the voters of California overwhelmingly supported Proposition 22 last November to protect the revenues of local government, Governor Brown is looking at taking local tax dollars to reduce the State budget deficit.

The purpose of Redevelopment is to remove blight, bolster business, and create jobs. In San Leandro, Redevelopment has been used responsibly and effectively. Last year, the California Senate Office of Oversight and Outcomes recognized San Leandro for using Housing Set-Aside funds reasonably, excellent accounting and for making substantial progress in development of affordable housing.

One of the greatest successes was the transformation of a rundown hotel on East 14th Street that was a source of criminal activity into a well-managed apartment complex. The City reduced street crime while expanding housing for working families of low and moderate incomes.

Other recent redevelopment projects include: improvements in the Downtown, revitalization of MacArthur Boulevard, contributing to the cost of building the gymnasium at the Fred T. Korematsu campus at San Leandro High School,
helping construct the new Senior Community Center, supporting the LINKS shuttle service from BART to our industrial areas which reduces congestion and greenhouse emissions, and bringing the Creekside Plaza Class-A office complex and 1,000 quality jobs to town.

I applaud Governor Brown for his efforts to implement long-term fiscal reform for the State, and I mean no disrespect to Senator Corbett or Assemblymember Hayashi. But any short-term benefit to the state budget from eliminating Redevelopment Agencies will be outweighed by the long term negative impact on our cities and the state economy.
Regardless of what occurs in Sacramento, we are committed in San Leandro to making our city a safe, vibrant community that is the best place in the Bay Area to raise a family or run a business.

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First, I am pleased to report that crime fell by 8% last year, and has dropped by nearly one quarter since 2006. The credit goes to the outstanding work by the San Leandro Police Department, and also to the growing involvement of community groups, including:
Neighborhood Watch, Citizens for Safer San Leandro, the Downtown Association Crime Free Business Program, the Crime Free Multi Housing Program, and the Map Your Neighborhood Program

They are all important partners with our Police Department in keeping San Leandro safe. We recognize, however, that residential burglaries remain a concern and the number increased last year. We are determined to make progress in this area in 2011.

We are also pleased to have received funds from the federal COPS program for the next three years. This will allow us to retain two police officers and add three more. Besides allowing us to avoid deeper cuts to our Police patrol staff, the Department has been able to sustain its crime prevention efforts, which are having great results.

Also of note, 9-1-1 cell phone calls now go to our dispatch center here in San Leandro rather than to the Highway Patrol. As a result, the department has seen a 66% increase in the number of 9-1-1 calls the dispatch center is receiving. This means faster response to emergencies in San Leandro, but at the same time, it is adding to the workload of our already strained staff.

I’ll be talking about new businesses coming into town in just a moment, but this is a good time for me to mention that Paramedics Plus is locating its headquarters in San Leandro. This is going to be a real asset to San Leandro. It keeps 375 jobs in town that might have otherwise been lost and is going to save the City about $81,000 per year in emergency response costs.

When we think of Fire Department response, we think of big red trucks, ambulances, maybe even a hazardous materials truck. But this past summer the Fire Department dedicated a new boat for water rescues, very appropriate since we have about 7 miles of waterfront along the San Francisco Bay. Alameda County Fire acquired the boat through a grant from the U.S. Department of Homeland Security, and it is housed at Station 11 on Catalina Street. Their crews are fully trained and ready to respond to any level of water emergency.

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Something that is equally important to our community is our duty to be responsible stewards of the environment and our natural resources. Many businesses in town are taking steps to reduce dependence on non-renewable energy, reuse products and recycle whenever possible. The City’s Industrial Competitiveness Program provides assistance to businesses for increasing the energy efficiency of their facility and operations.

Seven businesses are enrolled in a “Sustainability Circle” run by True Market Solutions and sponsored by the City. Those businesses are Alameda County Industries, Alco Iron and Metals, Ghirardelli Chocolate, Marina Mechanical, Mi Rancho, OSIsoft and Scandic Springs.

The Sustainability Circle brings together companies from a diverse range of industries to share resources and tips on how to improve the energy efficiency of their buildings and operations.

These companies know that running an energy efficient business is good for the environment and the bottom line.

For instance, Scandic Springs on Montague Avenue installed a new solar roof. Their photovoltaic system, believed to be the largest in San Leandro, provides approximately 85% of Scandic’s total electrical needs.

Mi Rancho, a family-owned tortilla manufacturer on Hester Street, was recently featured in an article in the New York Times as a model of sustainable business practices. With new energy- efficient lighting, plus waste-reduction measures underway, the company expects to save $100,000 a year in energy costs. The improvements will pay for themselves within the first year.

Other San Leandro businesses are equally committed to energy efficiency and sustainability. The Coca Cola Bottling Plant received a 2010 Business Efficiency Award from StopWaste.Org for recycling, composting and preventing waste with reusable supplies.

As a side note, Coca-Cola was one of the manufacturers San Leandro students visited recently in a joint program with the City and the Chamber of Commerce called “Careers in Industrial Technology.” This program is designed to expose students to the many possible careers in manufacturing.

A.G. Ferrari, whose food and wine distribution headquarters are on Catalina Street, also won a StopWaste.Org award for composting 200 tons of waste per year, and better use of reusable products and environmentally preferred packaging. The company slashed its garbage costs by 77%.

Halus Power Systems on Grant Avenue is a new innovator in clean technology. They are taking used wind turbines, refurbishing them and selling them to small users like mobile home parks and farmers, reducing the need for electric power from the grid.

Waste Management’s new projects coming on line at the Davis Street Transfer Station include the collection of landfill methane gas which will be converted into liquid natural gas. They expect to generate up to 4,000 mega-watts of power. This will allow them to removed the transfer station from the grid and sell back unused power. In addition, a new indoor composting facility at the station will handle 48,000 tons of compostable waste per year on site, eliminating 8-10 truck trips out of the facility and off of our city streets.
As part of the American Recovery & Reinvestment Act, the City obtained a $732,000 Energy Efficiency and Conservation Block Grant. The funds will be used to implement energy efficiency programs, including:
Building Performance Audits and Do-It-Yourself classes for residents, which are part of our City energy efficiency program, and upgrading of many street lights on East 14th Street and in our neighborhoods.

These efforts are in support of the city reaching its goal of reducing greenhouse gas emissions to 25% below 2005 levels by 2020.

For the third year in a row, our Water Pollution Control Plant received a California Water Environment Association award for having the best wastewater collection record for a plant of its size in the Bay Area. The association’s judges were particularly impressed by the Plant’s maintenance program, its emergency response capabilities and its safety program.

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Another one of my chief goals as Mayor is to support our business community and bring new businesses and jobs into San Leandro. Our Office of Business Development has the same mission.

We are fortunate to have two of the largest businesses in the East Bay here in San Leandro – Tri-Net and OSIsoft – and I’m happy to report that both businesses are expanding. Tri-Net, a nationwide company that specializes in managing benefits, payroll and human resources, has doubled in size in the past three years.

OSIsoft is a worldwide leader in real-time data infrastructure solutions. It recently received an infusion of $135 million in venture capital funds and is expanding its headquarters here in San Leandro.

Odwalla has come to town. This popular producer of juices and other healthy snacks moved into the Alvarado Business Center in February, bringing 50 jobs.

The Annex, a company that distributes coffee and other products from around the world, is now occupying nearly 221,000 square feet of warehouse space, one of the largest coffee warehouse on the West Coast. They chose San Leandro because of our location on the Highway 880 corridor and our proximity to the Oakland International Airport.

The new Chrysler/Dodge/Jeep California Superstore moved into 1444 Marina Boulevard this past fall. It is good to see this property occupied once again by an auto dealership, and this is evidence that Marina Boulevard Automall has survived the economic downturn and is well positioned to capitalize on an economic recovery.

The District Council 16 International Union for Painters and Allied Trades will be moving into a portion of the old Kellogg’s plant on Williams Street for its apprentice training program. They are bringing 14 jobs to the center, with more anticipated as the economy and enrollment improve. Nearly 200 students will graduate from their program each year.

The International Brotherhood of Electrical Workers Local 595 is moving from Alvarado Street to Catalina Street and building a 46,000 square foot, state-of- the-art facility for its training programs. They employ 30-40 people and train upwards of 500 apprentice and journey level electricians each year.

Construction of the Kaiser Hospital and Medical Center is well underway. This is the largest development project in San Leandro’s history. There are over 150 people working on the site right now, and by December there will be well over 400 jobs there. Once the hospital and medical center are finished, there will be over 2,500 full time, permanent, quality jobs in this facility, and it will be the largest employer in San Leandro. Kaiser reports this will be one of the most technologically advanced health care facilities in California.

My hope is that we keep San Leandro Hospital open and serving the community, and combined with the new Kaiser facility, San Leandro will become a hub of high quality medical care in the East Bay.

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Let me focus on some of the projects the City has underway.

The Estudillo Parking Garage is progressing well. Our appreciation goes to the neighbors and businesses around the project that are putting up with the noise, construction activity and parking challenges. The project is on schedule and on budget. Completion is expected summer 2012. It will add 138 parking spaces in the downtown, which is an important aspect of our business development and retention efforts. Further, the building will be seismically safe – something that the old garage was lacking.

We are confident that our new Branding and Marketing Strategy team will be a driver in retaining current business, and attracting new ones. 23 local business leaders are offering their talent and expertise to help develop a brand and create a marketing strategy for San Leandro.

Progress continues on building a vision for our Shoreline and Marina. The members of the Shoreline Development Citizens Advisory Committee continue to work with Cal-Coast, the master developer of the shoreline, to create a financially sustainable project that offers a wide range of amenities.

With respect to the old Albertsons site downtown, Innisfree Ventures holds the exclusive right to develop this site. We are looking forward to a City Council Work Session on April 25th when we will see conceptual designs for retail development of the site.

Progress is being made concerning the development of the Davis/Hays/ East 14th Street block. Innisfree Ventures is also developing this project in coordination with the City.

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My first week in office, I had the pleasure of speaking to a Government class at San Leandro High about public service and legacy of John F. Kennedy as part of a program by the U.S. Mayor’s Conference to commemorate the 50th anniversary of President Kennedy’s inaugural address.

I got hit with some pretty tough questions by those students. That demonstrated to me that the youth of San Leandro aren’t complacent about the community they live in. They are concerned and inquisitive. That encourages me. It says that the future of San Leandro is promising. We need to continue to invest in our students because they are our leaders and innovators of tomorrow and it’s through strong schools that we build strong cities.

We continue to partner with our schools to find ways we can bring more opportunities to students and the community – such as creating joint use facilities in the form of the new gyms at Fred T. Korematsu Campus and Washington Manor Middle School.

With new projects on the horizon for San Leandro schools thanks to Measure M, we will study other ways we can collaborate. Measure M will provide funds to renovate Burrell Field, the athletic fields at John Muir Middle School, and the swimming pools at San Leandro High.
And I must make mention of the two signature projects under the previous school district bond, Measure B. These are the Fred T. Korematsu Campus, which opened last August, and the Arts Education Center.

As I mentioned earlier, the City was able to assist in the construction of the gym at the Korematsu campus with Redevelopment funds. Ninth grade students at San Leandro High School now attend 29 new classrooms equipped with SMART board technology, a beautiful library, science labs, a courtyard and mini amphitheater, and a great new gymnasium. The overcrowding of San Leandro High School is no longer an issue for our students and district.
The Arts Education Center will open in April, just in time for the high school Spring musical. In addition to a 550-seat theater, the center includes a sound stage, recording studio, computer labs and classrooms. Students in the school’s Multi-Media Academy, which will be housed in the center, will have the latest technology and equipment.

A sneak preview of the theater will occur on April 20 as a benefit for the San Leandro Education Foundation and their Friends of the Theater program. I encourage all to attend.

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When I spoke to that High School class, it gave me the opportunity to re-read President John F. Kennedy’s moving inaugural address. The one phrase we all remember is “...ask not what your country can do for you – ask what you can do for your country.”

In my first Coffee with the Mayor session in January, one of our neighbors recommended that we make better use of volunteer services in the City; some of that “what you can do for your country” energy. I want to find more ways we can make use of the talents and skills we have in our community.

However, everyone should know that scores of San Leandrans are already providing valuable service to our City.

Over 450 teens volunteered in calendar year 2010, for a total of 10,950 hours of work. They help both our Library and Recreation and Human Services Departments with a multitude of chores and special events. 303 adults volunteered for us last year, providing more than 23,000 hours of labor. They help at our Library and serve as tutors for Project Literacy. They also provide valuable clerical support in almost every City department.
In the Police Department, our Retired Senior Volunteer Program members help with an incredible number of assignments – all tasks that would require an officer’s or other uniformed personnel’s time that is better spent on more important duties.

The KaBOOM! Toyon Park renovations were an outstanding partnership. It was sponsored by the Bio-tech company AMGEN, organized by our Recreation and Human Services Department, designed in collaboration with community members, and built with sweat-equity contributed by parents, kids, teens, elected officials, City employees, San Leandro Rotary, and others. It was a great day and we now have a great children’s playground at the park.

And it should be noted that these totals do not include the time and support of our Police Explorers. This is a group of 16 dedicated, energetic teens, many of whom who have set their sights on a career in law enforcement, helping with a variety of events and programs. But, even more important, the Police Department has been able to turn around the lives of a number of teens who may have been headed down a risky path and changed their lives for the better. You can’t put a price on that.

And, of course, we can’t forget the dedication of our residents who serve on City Boards and Commissions who help the Council and City administer City programs and address community needs. On behalf of the City Council and staff, I thank our Board Members and Commissioners for all that you do.

All of our volunteers deserve a round of applause.

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I am saving the best for last – the announcement that our Senior Community Center will officially open for business on Monday, April 4. We are having a grand celebration on Saturday, April 2, and welcome all of you to attend.

We have been able to put a plan in place to bring our senior programs and services to the center of town and found the financial resources to build it, thanks in great part to the partnership for acquisition of the property with San Leandro Hospital and the Eden Township Healthcare District.

The Senior Center also serves as the City’s Emergency Operations Center or EOC in the event of a disaster. The EOC at the Senior Center is fully equipped for our response to the community in times of emergencies. This is an example of foresight by our previous Councils and smart planning by local government – creating a new building to serve a dual purpose.

And, we have a great announcement to make. We just received notice from the United States Green Building Council that the Senior Community Center has received Gold LEED status. In the environmental world, that is an outstanding accomplishment, and recognition of the high level of environmental stewardship we have incorporated into the Center.

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I have been the Mayor of San Leandro for 2 1⁄2 months now. I am no longer turning my head to see who is behind me when someone says to me “Hello Mayor.”

I continue to be impressed and inspired by how hard our City employees are working. They all give 110% effort to this community. They take pride in the jobs they perform and genuinely care about our city. I believe I can speak for the whole City Council when I say “Thank you” to our City employees for a job well done. And I thank the City staff that worked with me in preparing my State of the City speech.

I also thank the City Council for your continued dedication and fortitude in addressing the pressing issues facing our community.

Finally, I thank the People of San Leandro for allowing me to serve as your Mayor. It is a privilege and honor to do so.

As I said at the outset, we have challenges ahead of us, but we also have many successes to build upon. I firmly believe San Leandro is on the move and laying the foundation for strong growth and prosperity in the years ahead. If we combine fiscal common sense with innovations in government and initiatives to spur business development, San Leandro will be at the forefront of cities in the Bay Area in growth as our state and national economy recovers.

Thank you.

Oh, and Happy Birthday San Leandro. It was 139 years ago today that the City incorporated – March 21, 1872.

Posted by Mike Katz-Lacabe at March 22, 2011 11:16 AM | TrackBack
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