San Leandro's first balanced budget in three years, according to City Manager Steve Hollister, was presented at the May 16, 2011, meeting of the San Leandro City Council.
According to the presentation, the budget for fiscal year 2011-2012 (July 1, 2011 to June 30, 2012) maintains current levels of service, except for the addition of the operation of the Senior Community Center.
Finance Director Tracy Vesely noted that the revised California state budget still includes a public safety realignment plan and the elimination of redevelopment agencies, but the final outcome remains unknown.
The general fund budget of $71.76 million is an increase of 3% from last year's adopted budget of $69.98 million. A portion of the growth in the budget comes from an annual increase of $852,759 in the City's contribution to the CalPERS pension fund and an increase of $490,000 in employee costs from new contracts that were approved in December 2010. The budget increase is largely supported by an estimated $3.5 million from Measure Z, the quarter-cent sales tax passed in November 2010. The COPS grant for five police officers is the reason that city staff will increase by nearly 5 employees to 409.2 FTEs (full-time equivalents).
Police make up $26.1 million or 36.2% of the total City budget. Fire accounts for $16.2 million or 25.25% of the budget. The next biggest expenditures are $4.7 million for library services, $4.1 million for public works, and $3.8 million for recreation and human services. Debt service is $3 million or 4.15%.
Although the current budget is balanced, projections for the next three years show structural deficits increasing from $125K in 2012-2013 to $1.86 million in 2014-2015. Those projections do not include any salary increases for city workers.
The special fund for the shoreline is expected to end 2011-2012 with a $116K deficit. All other funds are projected to end the year with a positive balance, with the gas tax fund and business improvement district funds showing deficits the following year.
The City isn't planning to spend any general fund money on its roads next year, but will receive money from Alameda County's Measure B funds that will be used for rehabilitation and street sealing. San Leandro's roads currently have a Pavement Condition Index of 58, which is considered "at-risk" and is tied for the worst pavement conditions in Alameda County with Oakland.
Mayor Stephen Cassidy promised not to take his salary of $35,370 until San Leandro's budget was balanced. The San Leandro City Council looks set to make that happen in June, when it votes on whether to approve the budget. Cassidy said last night that even when he starts receiving his salary, he will voluntarily contribute his portion of the 8% CalPERS pension contribution. That sets the stage for future contract negotiations, in which employees will likely be asked to pay their portion of the employee CalPERS pension contribution. San Leandro is one of two cities in Alameda County that pays the entire portion of the employee retirement contribution for non-safety employees and one of four cities that pays the entire portion of the employee retirement contribution for police.