April 23, 2013

Union Pacific Wants to Take San Leandro on $80K Ride

Union Pacific is offering to release and indemnify the City of San Leandro if it pays $80,000 for cleanup costs of lead contamination at the former Stege Pistol Range in Richmond, California.

In a letter dated March 25, 2013, an attorney for Union Pacific writes, “The total of all sums that UP [Union Pacific] is requesting from all the agencies that used the range is far less than the amount UP will spend. In return for the payment of $80,000, UP will release and indemnify the Agency [San Leandro Police Department] from claims related to the contamination at the Property [Stege Pistol Range]...As UP is offering this settlement amount in an effort to reach a prompt resolution and to avoid incurring attorneys' fees, we ask that you respond with a signed agreement by May 9, 2013.” The letter also included a Public Records Act request related to the pistol range.

Union Pacific's request to pay $80,000 in exchange for indemnity is based on a January 1995 agreement between Southern Pacific Transportation Company and the San Leandro Police Department for use of “the police training facility and pistol range...” However the 1995 agreement is signed only by Janie L. Moeller of Southern Pacific and not by anybody from the San Leandro Police Department or the City of San Leandro.

When San Leandro Bytes contacted the attorney representing Union Pacific, Aaron Hunt, Union Pacific's Director of Corporate Relations and Media provided this statement in response to a request for a copy of the 1995 agreement: “Over many years, law enforcement and other security agencies used the shooting range. Union Pacific has asked the city of San Leandro to pay a small portion of the remediation costs that Union Pacific will incur.”

On April 12, 2013, the City of San Leandro responded to Greenberg Glusker's Public Records Act request for records of San Leandro's use of the Stege Pistol Range. The response stated, “There are no City records responsive to your request.”

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April 22, 2013

State Senator Ellen Corbett and San Leandro Mayor Cassidy Address League of Women Voters

On April 19, 2013, the Eden Area League of Women Voters held an event to meet your local elected officials. Elected officials ranging from Congressional Representative Eric Swalwell to Chabot-Las Positas Community College Trustee Marshall Mitzman nearly outnumbered the members of the public at the event.

From San Leandro, Mayor Stephen Cassidy, Vice Mayor Michael Gregory, and Councilmembers Pauline Cutter, Diana Souza, and Jim Prola represented the City Council, which had been invited to the event by former San Leandro Mayor Shelia Young, who spoke during public comments at City Council meeting earlier this month. School Board President Diana Prola and Mike Katz-Lacabe (me) represented the San Leandro Unified School District and School Board Trustee Penny Peck was on hand from the San Lorenzo Unified School District.

The League of Women Voters honored State Senator and former San Leandro Mayor Ellen Corbett for her years of service. Cornett then addressed the audience as shown in the following video:

Each group of elected officials was asked to talk about on the group's goals for 2013. Mayor Cassidy spoke on behalf of San Leandro city officials and can be seen below:

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April 14, 2013

San Leandro City Council Looks to Suspend Utility Tax Rebate Progam

At a work session on balancing the budget on April 8, 2013, the San Leandro City Council indicated its desire to suspend San Leandro's utility tax rebate program for two years.

The City of San Leandro charges a tax of 5.7% on telephone services, including cell phone service, and cable television service and 6% on electricity and natural gas. Most nearby cities charge a utility tax and San Leandro's is lower than most. Alameda, Berkeley and Oakland charge 7.5%, Alameda County charges 6.5% and Hayward charges 5.5%.

The City of San Leandro's rebate program, however, appears to be unique, among nearby cities. According to the City of San Leandro web site, the City of San Leandro “rebates 50 percent of all utility tax dollars spent in excess of $25,000.”

In 2012, the City of San Leandro paid rebates totaling $360,440 to six companies:

  • Georgia-Pacific, $135,888
  • Ghirardelli, $61,452
  • Safeway, $58,888
  • Coca Cola, $48,590
  • Kraft, $43,269
  • Otis Spunkmeyer, $12,353

Suspension of the utility tax rebate program is intended to help reduce San Leandro's budget deficit, estimated at $2 million for fiscal year 2013-14 and $4 million in 2014-15.

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April 1, 2013

2013 State of the City Speech

On March 28, 2013, San Leandro Mayor Stephen Cassidy gave his third State of the City speech at the Senior Community Center. During the speech, Cassidy highlighted accomplishments and how they fit into the City Council's goals. These were followed by discussion of three challenges: public safety, infrastructure, mainly the roads, and the budget's structural deficit. The complete video of the speech can be seen below.

The complete text of the speech is shown after the break.


In my 2011 State of the City Address we focused on challenges and positioning San Leandro for recovery and prosperity. Last year’s Address was geared toward shaping San Leandro’s economic future. Tonight, I’m pleased to talk about that future and the transformation that is occurring in San Leandro.

Innovation is change that results in enhanced performance. With the help of many partners we are transforming San Leandro into a center of innovation.

We are a city that still has challenges but we are also a city that is in the midst of major change - change that bodes well for the future of our community, change that will help our residents and businesses thrive and prosper in the years to come.

Before I discuss these changes, challenges and opportunities, I’d like to express my gratitude to my fellow Council members.

We work well together, jointly developing goals for the City, establishing policies and approving the budget. We represent San Leandro in county, regional, and national public agencies and organizations

I am proud of the spirit of cooperation and unity of purpose among the Council members. We are all focused on doing what is in the best interests of our city.

I would also like to express my gratitude to our partners in public service at the county, regional, state and federal levels of governments.

In 2013, San Leandrans are extremely fortunate to be represented by one of the best groups of elected officials we have ever had. They each possess strong leadership qualities and commitment to the public good.

Without excluding any of our elected representatives, I wish to recognize several of them, starting with our County Supervisor Wilma Chan and Carole Rogers, Dr. William West and the other members of the Eden Township Healthcare District board, for their determination and unrelenting efforts to maintain emergency and acute care services at San Leandro Hospital.

I thank our East Bay Municipal Utility District Director, Frank Mellon, for working with City staff and residents to ensure the planned partial renovation of Chabot Dam is undertaken efficiently and with the least community impacts as possible.

I thank Doug Siden and the other East Bay Parks Directors for the funds under Measure WW which we have used to restore and upgrade the parks and open space at the Marina Shoreline, and for the ongoing work of the East Bay Parks in transforming Oyster Point into San Leandro’s newest park and open space.

I thank our BART Directors Rebecca Saltzman and Robert Raburn, and former BART Director Bob Franklin, for recognizing that the maintenance and renovation of existing BART stations, including San Leandro and Bayfair stations, is just as important to BART riders as expansion of the BART system to new communities. I also thank our BART directors for partnering with the City to improve the neighborhoods and community surrounding our BART stations.

I thank Alameda County Transit Directors Mark Williams and Elsa Ortiz for engaging and listening to San Leandrans in shaping the Bus Rapid Transit or BRT plan which will increase the speed at which bus riders travel from and to the downtowns in San Leandro and Oakland along East 14th and International Boulevards.

I thank our former Mayor and State Senate Majority Leader Ellen Corbett, joined now by Senator Loni Hancock and Assemblymember Rob Bonta, for advancing the interests of San Leandrans in Sacramento. I am a member of the Mayors Against Illegal Guns, a coalition of Mayors nationwide demanding stricter gun regulations. Senators Cobett and Hancok and Assembly member Bonta are also focused on reducing gun violence in Alameda County and statewide. I thank them for their leadership on this issue.

In 2013, due to redistricting, San Leandro became part of the 13th Congressional District, represented by Barbara Lee. We are fortunate to now be represented by one of the most passionate, wise and effective members of Congress.

Even before becoming our representative, last summer, Representative Lee assisted us in our successful application for a $2.1 million grant from the Economic Development Agency, an agency within the U.S. Department of Commerce, to expand Lit San Leandro, our high speed fiber optic network. Congresswoman Lee is also working to reduce gun violence in Alameda County, and we support her efforts.

The City Council knows that our success depends upon the hard work and talent of the approximately 415 city employees working every day to make San Leandro a special place, from our police officers, to our librarians, recreation and parks and public works staff. Our finance, community development, and human resource personnel work diligently behind the scenes so that services are delivered efficiently and seamlessly.

While it only been a little over a year since he moved to San Leandro, City Manager Chris Zapata has firmly taken charge of our organization, building an outstanding leadership team committed to offering superior service to the community. Much of the successes for our City that I cite tonight in my speech can be attributed to his leadership and that of our Assistant City Manager Lianne Marshall and our Department Directors and Managers.

Please join me in thanking all of our City’s talented and committed public servants. I’d like all city employees in attendance to rise and let’s give them a round of applause.

Our Chamber of Commerce is a key partner in helping us grow local companies and promoting business and community wellness. I thank the companies that partnered with the Chamber of Commerce in co-sponsoring tonight’s event, including OSIsoft, Wells Fargo Bank and Kaiser Permanente.

At this time I’d like all of the members of our business community to stand, be recognized and receive a round of applause.

Our schools have been making great improvements in their infrastructure and coming out of a five year period of repeated cuts to their operating budgets due to the state budget crisis.

San Leandrans know that when our schools succeed, our City succeeds. The City values its great partnership with both the San Leandro and San Lorenzo school districts.

I wish to acknowledge that Cindy Cathey, the Superintendent of the San Leandro Unified School District, who is here tonight. She has led the district for the past 3 ½ years, and been an educator for 36 years. She has dedicated her adult life to the education and development of the children of San Leandro and will be retiring this Summer.

Will Superintendent Cathey, all school board members, teachers, administrators, and members of the boards of the foundations supporting our schools and students please stand. Let’s give all of our school partners a round of applause.

Non-profits and faith based organizations have been challenged with growing need and shrinking resources. San Leandro’s community kindness is truly being tested with many worthy causes. Please support and help me recognize the community contributions of our partners such as Davis Street, Boys and Girls Club, and Building Futures. Will everyone associated with a non-profit or faith-based organization please stand and be recognized.

Our City is fortunate to have true public servants on boards and commissions that give generously of their time and expertise on community issues. These issues are complex, ranging from land use decisions to personnel matters. Will all members of our Board and Commissions please stand and be recognized.

I’d like to thank the residents of San Leandro. Residents that care about our history, residents that care about our services, residents that give of their time and effort to mentor our youth, coach sports teams, lead our boys and girls scout troops, residents that help make San Leandro safer through their participation in neighborhood watch groups and by serving as the eyes and ears of our police department in reporting suspicious activity and criminal conduct.

You are the reason government exists and your active involvement in schools, churches, non-profits, and government to name a few are what makes San Leandro a special place to live, work and play. On behalf of our organization and City Council – I want to thank you for your support.

And I would like to thank my wife Amy Cassidy. Together we are raising two beautiful children. She is the love of my life and my soul mate.

What are the positive changes that are occurring in our community?

Let me speak of this in the context of the City Council’s six goals.

Our first goal is to place the City on a firm foundation for long-term fiscal sustainability.

For the past two years, we have adopted balanced budgets in a time of unprecedented challenges for cities due to the state’s elimination of redevelopment agencies.

Last year, taking advantage of historically low interest rates, we refinanced a debt owed to CalPERS for the pensions of our public safety officers. The refinancing was a straight reduction in the interest rate due on the debt – we did not extend the term of the debt or take on any new debt. The refinancing generated approximately $300,000 in savings in the first year and approximately $147,000 for our general fund over the next 12 years.

Earlier this year, we did the same with other City debt. We reduced the City’s interest payments by $1.8 million over the next 15 years.

We also worked diligently over the past year to bring to an end through reasonable settlements two long-standing, major controversies that had the potential for exposing the City to damages claims each in excess of $20 million.

For the first time in the City’s history, we will be adopting a two-year budget this June, for the fiscal years 2013 to 2015. Moving to a biennial budget is an important step that in achieving long-term fiscal stability. It’s a procedural mechanism that can have significant and positive impact in ensuring we operate in fiscally prudent manner by adopting budgets that are balanced for two years.

In last year’s State of the City address, I noted that while the local economy was recovering and City revenues were increasing, even under the most optimistic projections, the rate at which our revenues were increasing was less than the rate at which the retirement costs for City employees was increasing. To restore our City to long term fiscal stability, as well as to provide retirement security for all City employees, I stated that we needed to make our pension system sustainable.

We have made substantial progress in this area. Our new, three year contract with The San Leandro Police Officers Association provides budget savings to the City in the first two years, with a slight cost increase by the end of the third year.

Importantly, police officers will start paying the employee share of the City’s annual pension obligations to CalPERS at 3 percent of their salary in 2013, increasing by 3 percent each year thereafter until reaching 9 percent of salary in 2015. The contact also calls for police officers to share 50/50 with the city for expected increases in health care costs.

I commend the San Leandro Police Officers Association for working diligently with the City to produce a new agreement that recognizes our shared goals of public safety and fiscal responsibility.

San Leandrans are rightly proud of having one of the finest police departments in California. We deeply appreciate the service and dedication of our police officers to the safety of our City.

Our second goal is sustainable economic development with a focus on San Leandro becoming a leader in the Bay Area innovation economy.

Let me you show you a video City staff produced that highlights our major economic initiative over the past two years, Lit San Leandro, which is partnership between the City and Dr. Patrick Kennedy of OSI Soft to bring the highest speed broadband to San Leandro businesses.

[Video at http://www.youtube.com/watch?v=2SnQI7cQ0UY plays]

As I noted earlier, last summer, after months of hard work by City staff, support from Representative Lee and lobbying efforts by myself and the City Council, we succeeded in obtaining a $2.1 million grant from Economic Development Administration for the expansion of Lit San Leandro.

The grant will facilitate the construction of 7.5 miles of new conduit, bringing the Lit San Leandro network to a total of over 18 miles.

Further validation of the importance of Lit San Leandro to City’s economic future was provided by Federal Communications Chairman Julius Genachowski who visited San Leandro in February.

At the U.S. Conference of Mayors meeting in Washington, D.C. in January, I invited Chairman Genachowski to visit San Leandro and see first hand Lit San Leandro in operation.

During his visit, Chairman Genachoski praised San Leandro for becoming a “gigabit city” stating that we “join a small but important number of communities” that understand the critical importance of high-speed broadband to our economy, and that the public-private partnership of Lit San Leandro can be “a model for the country.”

One of the sites we intend on connecting to Lit San Leandro is the San Leandro Zero Net Energy Training Center, which will have its opening dedication ceremony on May 30, 2013.

The Zero Net Energy Training Center is an example of how the future is being created today in San Leandro.

The 46,000 square feet building will consume only as much energy as it creates over a 12-month period, achieving 17 years before California's requirement that by 2030 all new commercial buildings in the state will be Zero Net Energy efficient.

The International Brotherhood of Electrical Workers Local 595 and the Northern California Chapter of the National Electrical Contractors Association commissioned the first-of-its-kind facility in the world to train the next generation of electricians for careers in clean energy.

Our planning department worked closely with the architects and contractors during the construction project. I’m proud to report that Byron Benton, the Executive Director of the Center, expressed to me his deep appreciation to the City and our building permitting staff for “jumping through hoops” to assist in moving the project to completion.

Sustainable economic development also includes a commitment to energy conservation, use of recycled materials, and reducing greenhouse emissions and pollution. The City’s recent ban on polystyrene foam containers by restaurants and our participation in the County wide ban on plastic bags at supermarkets and grocery stores are important steps in safeguarding our environment.

Our third goal is providing quality public safety services and working with the community in keeping San Leandro safe.

Our police department in the past year has implemented several new programs aimed at improving its efficiency. Through the greater use of statistics and analysis of crime patterns, Police Chief Sandra Spagnoli is deploying police officers with more precise greater focus on likely areas of crime than ever before.

We recognize that keeping San Leandro safe requires a sustained commitment to community outreach. Through efforts like Coffee with the Cops, the annual Open House, National Night Out, and teen and adult academies, our police are regularly interacting with the community. In doing, the Department is helping educate San Leandrans on crime prevention and public safety, while reinforcing the trust that exists between our police and community.

This trust is vital as keeping San Leandro safe is everyone’s responsibility. We all need to be the eyes and ears of our police reporting. By reporting suspicious activity as it occurs we enable our police to catch criminals and create the reputation among the criminal element in the Bay Area that San Leandro is a city to avoid.

Our fourth goal is maintaining and enhancing the city infrastructure.

We were pleased to open our new Downtown Parking Garage last November. Located on Estudillo Avenue close to East 14th Street, the garage contains 384 parking spaces, a capacity increase of about 50 percent over the facility it replaces.

The garage will play a critical role in enhancing our downtown by offering convenient parking for employees and customers of our downtown businesses. A centralized parking facility also facilitates higher density development in the downtown, consistent with the City’s transit oriented development strategy.

Adding the physical improvement of downtown San Leandro, and after outreach by myself and former Council member Joyce Starosciak with the Bay Area regional director of Cal Trans, the agency spent $1 million repaving the downtown area of East 14th Street, which is under the jurisdiction of Cal Trans.

We continue to work on the largest infrastructure project in our history – the $50 million dollar wastewater treatment plant expansion. This investment allows San Leandro to meet essential needs and ever increasing regulations as part of our role in safeguarding the water quality of the San Francisco Bay.

We linked Lit San Leandro to our main and Manor Branch libraries. Overnight that resulted in San Leandrans enjoying public libraries with the fastest wireless internet connections in California.

Finally, we are reconstructing the group picnic areas and replacing the irrigation system within Marina Park. This is part of a $2.5 million modernization of the park and the adjacent Par Course and Exercise Area which was completed in 2011.

Our fifth goal is supporting programs and activities that enhance the quality of life in San Leandro and promote civic pride.

Last year we created a family swim pass for our pools. The pass was designed to encourage greater use of the pools by establishing a set fee for a family to swim for the summer. Parents could achieve significant savings compared to paying for each visit for each adult and child. Over 50 families purchased a swim pass last year and we hope to triple this number in 2013.

I’m pleased to announce that due to the generous donation of an anonymous donor, Farrelly Pool will be open on the weekends this Summer for recreational swimming.

Our Recreation and Parks Department does a tremendous job in providing a wide range of services to the community. In 2012, tens of thousands of Seniors attended our classes, event and social activities. Our Senior Paratransit provided nearly 17,000 rides for Seniors. The Department’s programs, classes and events for youth have over 40,000 participants each year.

We were pleased to restore the funding for the Martin Luther King Day celebration. I thank Council member Ursula Reed for helping organize a speech contest for our youth as part of the MLK celebration.

Our main library is one of the jewels of San Leadro. It received nearly 700,000 visits in 2012. Our Manor Branch library had another 135,000 visits.

For the 3rd consecutive year, our library received a Big Read grant from the National Endowment of the Arts and Arts Midwest. The funds are used to promote literacy and underwrite an amazing series of performances and lectures.

The books selected by library staff as part of the Big Read program have helped our community learn more about the history and culture of our diverse population.

Only 75 libraries nationwide receive the grant each year. Obtaining this grant for an unprecedented three consecutive years is a testament to outstanding creativity and intelligence of our library staff.

In 2012, the library established an electronic and downloadable book collection.

Finally, the library plays an essential role throughout the year in enhancing the quality of life in San Leandro and celebrating our diversity. The library hosted 329 cultural and educational programs for our community which had a combined attendance of over 27,000 adults and children.

Our Sixth Goal is maintaining and building upon the strong relationship with our schools.

We accomplished much over the past year in supporting our schools. In a win-win for students and City, we are loaning the San Leandro school district $1.2 million to purchase the Girls Inc. building on East 14th Street near San Leandro High School for use as a wellness and counseling center to address the physical and mental health needs of students.

The school district, with the support and assistance of Supervisor Chan, applied for and received a substantial federal grant to create a health clinic. Under the agreement, the City will receive interest payments from the school district at a rate greater than what the City is earning on our reserve funds, but the rate is still very favorable to the school district.

In addition, the City is also providing support this year for a gang prevention counselor as well as maintaining our ongoing commitment to provide police officers, referred to as School Resource Offices, to the district.

We are also delighted to have installed at the beginning of the school year a new traffic signal next to the Fred Korematsu 9th Grade Campus for the safety of students crossing the street.

Now what are our main challenges?

The first challenge is public safety.

Since January, we have experienced a sharp increase in burglaries which has residents and patrol officers on high alert. I’ve spoken to other Mayors in the County about this issue. It is not unique to San Leandro.

After reaching records lows, crime has increased in California over the past two years. San Jose Mayor Chuck Reed recently stated, “Residential burglaries and other property claims have been on the rise in San Jose and around the state.” He added, “These increases may be tied to the State’s prison realignment plans which allow qualified inmates to be released early.”

In response to the increase in burglaries, our police have ramped up their efforts in community outreach and proactive enforcement. Police have been walking neighborhoods and setting up information booths at shopping centers to educate the community on safety and crime prevention. Over the last several months, the police department has received an increase in calls from the community reporting suspicious behavior, many of which have resulted in arrests for crimes that occurred in San Leandro neighborhoods.

Chief Spagnoli has shifted staffing to have a single point of contact for Community Outreach/Community Relations, and expanded the department’s social media presence on Facebook, Twitter and via text messaging. In the next few months, Chief Spagnoli will roll out a new initiative designed to engage and educate the community on safety and crime prevention at an even greater level.

The Police Department is also in the process of transitioning from the traditional model of policing based on dividing the city into established beats, or broad districts, for patrol to a more fluid approach. Under the new approach, specific areas of San Leandro receive greater police resources based on statistical models that analyze and predict likely criminal activity down to the day of the week, time of day, and location based on past crimes.

All of these efforts are intended to create a safer city. We are committed to providing exceptional public safety services. Our police are truly committed to enhancing and creating new community partnerships. They recognize the critical importance of staying connected to the community, which enables all of us to live and work in a safe city.

Our second challenge is the condition of our roads.

Each year the city spends approximately $2 million on street sealing and road rehabilitation. The map in the slide shows the work that will occur this year in San Leandro.

Unfortunately, allocating about $2 million a year for our roads is only about one third the amount needed just to maintain our streets in their present condition

The condition of roads in the Bay Area is measured by an index called the pavement condition index or PCI. San Leandro’s PCI is 54, down from a high of 64 in 2004. At a 54 PCI our streets are at risk of accelerated deterioration if action is not undertaken.

We have been on a downward trajectory over the past decade as the City cut funding for road repair due to repeated budget shortfalls.

And just as prevention is less expensive than surgery, steady maintenance is cheaper than complete road reconstruction.

There was a solution. It was called Measure B1 which would have increased the sales tax in Alameda County and provided tens of millions of dollars to San Leandro for road maintenance and repair. The measure needed 2/3 support to pass and lost by one tenth of a percentage last November.

So what do we do now? The only solution I see is placing a local revenue measure on the ballot next year. Over the course of the next year the Council will engage the community in a conversation as to whether we wish to raise the local sales tax or pass a bond measure to address the condition of our roads.

In the meantime, we are undertaking a significant roads project I would like to highlight. City staff over the past few years cobbled together funds from various grants and County sources to undertake a $6.6 million redesign of San Leandro Boulevard near the BART station and rehabilitation of the roadway. The redesign will beautify the boulevard, make it more pedestrian friendly, and better connect the BART station to downtown San Leandro.

Our third significant challenge is our budget, and specifically the city’s structural deficit.

For the past two years, we have had a balanced budget. We had a surplus in 2011 and in 2012 our revenues matched our expenses. We would have had a surplus this fiscal year except for our transfer of $600,000 in one-time only revenues to our reserves funds. This was the first increase our reserves since prior to the Great Recession. As I noted earlier, we also were proactive and generated ongoing savings by refinancing debt owed by the City.

However the City has a structural deficit. Even though our workforce remains at about 415 employees, and employees have not received salary increases for several years, the total compensation our employees receive, and cost to the General Fund, continues to rise due to increasing benefit costs, namely rising healthcare expenses and greater contributions owed to CalPERS for employee pensions.

We are looking at a $2 million deficit for fiscal year 2013-2014 and a $4 million deficit for 2014-2015. This is a prime example of the benefit of biennial budget. It prevents us from wearing rose-colored glasses and failing to address revenue shortfalls beyond the next 12 months.

We are committed to adopting a balanced budget for the next two fiscal years. To do so will require continued sacrifices by our employee groups. Again, I thank our police officers for stepping forward and working with us to craft a contract that produces savings in the next two years.

Rising employee benefit costs are not the only reason for the projected deficit. Our expenditures are also rising is due to the ending of a grant from the Federal Government for the funding of 5 police officer positions. We will continue to keep these police officers. The expense though must now be shouldered by our General Fund, costing us $450,000 next fiscal year and $900,000 in fiscal year 2014-2015.

Another cost that is new to our budget is recognition of the unfunded liability for the healthcare of fire fighters when they retire. The city contracts with the Alameda County Fire Department for fire and emergency medical services. We have done so since the mid 1990’s. Joining the County Fire Department was a way to achieve budget savings without a drop off in service. Each year the County Fire Department provides us a contract for assigning 63 firefighters, plus administrative support and other services.

Until this year, however, the County Fire Department did not account for the cost of providing full, lifetime health care to firefighters, their spouses and any dependents, as part of its contract with the City.

The unfunded liability owed by San Leandro for firefighter retiree healthcare stands today at $18.5 million. We must now account for this cost in our budget and start making payments to reduce the liability or it will grow rapidly. We are looking at spending $1 million annually to address this liability.

Remember, the firefighters are not city employees. We contract with the County Fire Department for services. The city also has an unfunded liability for the retiree health care of city employees. However, this amount has been accounted for in our budget. Moreover, new city employees do not and have not for years, been entitled to full, lifetime medical care paid for by the City. We cap the payments for retiree medical care for city employees.

The contract with the County Fire Department constitutes 25% of our General Fund, and is expanding. We can not staff our police department at current levels and continue to fund our library and recreation departments at current levels if one significant component of the City’s General Fund expands at a greater rate than our revenues are expanding.

We value the work of the County firefighters and greatly respect their professionalism and dedication to the safety and welfare of San Leandrans. But the fiscal reality is we must all do more with less. Just our police officers addressed their pension costs, I ask the County firefighters to work with the County and City in addressing the full costs of the healthcare benefits they receive.

Now, let’s shift to the opportunities for San Leandro.

Before I speak of the excitement that is literally building in San Leandro, I would again like to thank the businesses that are already here. They are the foundation for the future and we share a desire to retain and grow our local business.

New developments are transforming San Leandro into a community that has world class health care and a long awaited revival of our shoreline on beautiful San Francisco Bay. In addition, our BART stations provide a competitive edge to our partners at the BayFair Mall as they remake and renovate this key property.

The Kaiser Hospital project represents the next generation of health care for the region. These services are essential to meet the health and welfare of thousands of San Leandro families. Kaiser Hospital also increases the number of employees in our City by 2,400 positions. These jobs represent not just a number but people who will spend time, money and add their individual talents to our community.

In the next two weeks after many years of planning and community engagement, the City Council will kick off the environmental review process for the Shoreline Development. This long awaited step sets the stage for a long awaited dream of further activating the Marina area. I thank Ed Miller of Cal Coast, the developer for the project, for his persistence and work to create new restaurants and a hotel and conference center that San Leandrans and visitors will patronize and enjoy.

We are excited about the commitment of Macy’s to Bayfair Mall. Anchor tenants are increasingly important to regional malls and Madison and Marquette’s effort to secure a national brand like Macy’s is appreciated. Our hope is that the work to renovate the Macy’s store will be done in time for the holiday shopping season in 2014.

Property values are rising in San Leandro. In 2012-2013, San Leandro had the third highest rate of growth in assessed value in Alameda County.

San Leandro has innovation in its DNA.

Soon after our City was founded, a family-owned business based on Davis Street helped revolutionize agriculture and earth-moving in America. Daniel Best created steam, diesel and gas-powdered tractors that replaced horse power and transformed many industries.

Today, a pioneer of the digital age, Dr. Patrick Kennedy, whose company OSIsoft is located on Davis Street at the same location as the Best family tractor factory, is helping us transform San Leandro into a center for innovation, technology and advanced manufacturing.

Fiber optics networks are the essential infrastructure of the 21st century, and we are providing San Leandro businesses a significant competitive advantage to grow and become industry leaders. For example, one business in San Leandro that regularly must download huge amounts of data as part of its operations recently connected to Lit San Leandro. What took 30 minutes to download, now takes less than 15 seconds.

Investment and development follow infrastructure. In the 18th century it was seaports, in the 19th century it was railroads, in the 20th century it was highways and airports. Today, it is ultra-high speed broadband connectivity.

If you build it they will come, and San Leandro has it all - highways, nearby seaports and airports, rail and public transportation, and now the fastest broadband in the U.S.

The possibilities for San Leandro are unlimited and of world class. World class because of our location, transportation infrastructure, beautiful natural setting and weather. World class because of our educated workforce, dynamic projects, a global corporate presence and shared vision among our political, business and civic leaders in the importance of innovation.

The future is being created today in San Leandro. We are in the beginning stages of transforming San Leandro into a center of innovation. Thank you for coming tonight and thank you for helping make San Leandro such a special and unique place to live, work and play.

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