Thursday, June 10, 2010

Council Gladly Pays For Budget Monday For A Hamburger Today

San Leandro approves $69.6 million budget; closes deficit with dwindling reserves for 4th straight year By Steven Tavares
"I hate this budget," motioned San Leandro Councilman Jim Prola. "I hate this budget, too," seconded Councilman Bill Stephens as the council unanimously approved a $69.6 million budget for the coming fiscal year.

"This is a very painful budget to have gone through," City Manager Stephen Hollister said before introducing the specifics of the plan to balance a $3 million deficit for the 2010-11 fiscal year. The proposed budget had gone through numerous revisions since November of last year. The drawn out conversation over how to balance a city budget with lowering revenues and higher expenditures had played itself out over the months, but only one resident, speaking on behalf of funding the city's 211 alert program, spoke during Monday's meeting. Interim Finance Director Perry Carter said the city's revenues have dropped precipitously since a high point in 2006-2007, falling 15 percent or $11.6 million, while expenditures have only been cut by 11 percent, or $8.5 million.

With the action, the council opted to balance the budget again using dollars from the city's designated fund. The fund balance, once as high as $16 million at the beginning of San Leandro Mayor Tony Santos' tenure in 2007, will be further depleted to as low as $1.3 million this fiscal year. Monday's budget also ensures the city will incur deficit spending for every year of Santos' first term in office. The issue will very likely be the main talking point for his three opponents for mayor this November, although Councilwoman Joyce Starosciak was mum on the budget situation Monday, while Stephen Cassidy has been critical of the mayor's handing of the city's economy for over a year.

With the national economy still stagnant, there is no end in sight for the trickle down of fiscal problems all the way to the local level. The city's paltry reserve fund may put the city teetering on not being able to pay its bills. In previous finance meetings, Carter described a scenario where the city's low reserve balance could stymie the city's cash-on-hand to pay its bills. Monday night, he also cautioned with such a low balance, even a one percent miscalculation of the the budget's estimated revenues would immediately cut the reserves in half.

"This is a sobering budget," said Prola, who blames the recession for the city's fiscal dilemma. "It's not the type of budget I want to provide to our residents, but, as I've said before, we have a revenue problem, not a spending problem."

"The whole state has a revenue problem," said Stephens, who disagreed with Prola's ideological view regarding the budget by asking, "Do we tax to meet our expenditures?" he said. "I guess that's a difference of opinion."

In addition to using over $3 million in designated fund dollars to balance the budget, the council made excruciating cuts to city services, personnel and public safety. Not included is funding for school crossing guards, but Santos says the city is prepared to again split the $50,000 cost of the program with the school district, pending their approval.

Santos said Tuesday the city's low revenues and reserve fund will be buttressed later by additional one-time dollars. The city still has a $5 million fund in the event of an unforeseen natural disaster, he says, and expects to add over $3 million to its general fund resulting from Kaiser Permanente's move to build its newest hospital in San Leandro.

The city is also hanging its hat on the increased likelihood of a one-fourth percent sales tax measure appearing on the November ballot. Such a tax could bring in an estimated $2 million to the city's coffers. The extra tax dollars were not added to the proposed budget, but Carter believes passage could save 10 full-time positions, 2 traffic officers and ensure year-round use of fire ladder truck. Hopes of such a tax passing in uncertain times was buoyed this week as a vast majority of revenue enhancement measures were approved by voters in the state last Tuesday.


San Leandro should pass the burden of funding school crossing guards to the school district. This is exactly the expense type that should be a part of the school community and not an a city budget item.

Prola is an idiot. "The City doesn't have a spending problem" What an @$$! Of course this parasite who worked for the government would say something this stupid.

Hey, everybody, "Manuel" hates government and all local elected officials. In other breaking news, water is wet.

Hey Everyone, Doug is a just as stupid as Prola. In other breaking news; his mouth is still stink.

I agree, the school district should be paying for all of the crossing guards. I know, it goes down as a public safety issue, but let the school district handle it. The city outwitted the school district by paying half and now it's going to stay that way. Just another reason, the school board members in this city are substandard.

The School Board's oversight and direction is so low that they now rank even with our high school's test scores. Now, that is BAD. How can they justify their positions on the Board, if they had any integrity they would resign.

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