Wednesday, June 24, 2009

How Should San Leandro Avoid its Day of Financial Reckoning?

The city budget deficit affects all San Leandrans. Needed street repairs are not occurring, branch library hours have been restricted, school crossing guards have been terminated, and many other cuts have been made.

San Leandro's budget consists of nearly $78 million in expenditures, paid for by about $72 million in revenue. The city has covered its deficits by transferring millions from emergency reserve and self-insurance funds. The funds have been drained to dangerously low levels. If a major disaster should occur, San Leandro could go bankrupt in a matter of weeks. Plus, these are one-time only funds that are being used for ongoing expenses.

The budget planned for next fiscal year 2009-10 is seriously flawed. It continues to draw on reserves and relies on unrealistic projections that tax receipts will increase. In the midst of the worse recession post World War II, the city is planning on a 4% gain in sales taxes and 3% growth in property taxes. In the meantime, city streets continue to deteriorate yet the City Council approved spending millions to dispose of the spoils from continued dredging of the boat harbor.

Hard questions on the budget are being ignored such as

* Why is the city spending $13 million more on police services today than in 2000 yet has almost no more police officers patrolling our streets than eight years ago?

* How will the city staff the new senior center when it is sharply restricting hours at the art and history museum and reducing operating hours at branch libraries?

* Is the city risking the safety of children and their parents by eliminating street crossing guards at schools next year?

There is a lack of willingness at city hall to address these questions. The senior center under construction may have to be closed as soon as it is opened. There is even talk of imposing mandatory work furloughs for police officers.

Nor is there any leadership by example. Last year, the mayor sought to change city policy to allow compensation for international travel the city council. All the city council agreed to in the latest budget was to eliminate the free meals they received prior to meetings.

How is the city council planning on avoiding the city’s day of financial reckoning? They are considering placing new taxes on the ballot in 2010. Higher taxes for less service should not be the future of San Leandro.

To eliminate the deficit, sacrifices must be made at all levels, starting at the top. You cannot ask others to sacrifice when you refuse to do so yourself. The city council should take an immediate 10% pay cut out of respect for, and solidarity with, the sacrifices their constituents make every day.

The city council should also revise the budget approval process. When the city council adopts a budget, it reviews data only for the next fiscal year. That’s like an ocean liner sailing at full speed across the Atlantic without radar. The city should take into account multi-year fiscal projections. This way financial time bombs in the future can be identified and defused before they explode.

Further solutions will emerge through honest and open dialogue with San Leandrans. Town halls and community forums are valuable ways to engage the community, and should be scheduled. We can learn about the city’s fiscal challenges, get answers to questions on the budget, and offer solutions.

Government can play an essential role in meeting community needs. The school board worked with parents and teachers to pass a bond to construct a 9th grade campus to solve the overcrowding at the high school.

We should also receive value for our tax dollars. Repeatedly, city hall promised vital services would be enhanced if new taxes were adopted. The new budget cuts the number of police officers from 94 to 88; despite taxes approved last November to prevent this action. The city hopes to obtain stimulus money to refill these positions. That is only a short-term fix, and makes city hall further dependent on outside help for its internal failures. Plus, we need more police officers.

What are your thoughts on how the City of San Leandro should address its budget crisis?


  1. San Leandro is not seen as a destination city. The state of its restaurants, shopping centers and public libraries are mediocre (at best) compared to those in other Bay Area cities. What needs to happen is the city needs to invest in smart development and redevelopment to make San Leandro appeal to young, professional first time home buyers.

    As the aging home-owner demographic turns over, the city faces an opportunity to increase its tax base through home sales to first time home buyers. But how can we make San Leandro be seen as a city that is not just a place to pass through, but a place to live and thrive?

    Professor of Business and best-selling author Richard Florida argues that the recent success and growth of regions like the Silicon Valley is attributable to the fact that these places were able to attract creative and talented individuals who jump-started the local economy of these regions. Cities must appeal to a "creative class" of professionals he argues.

    While Florida's argument can be viewed as somewhat elitist, he makes a good point about the value of human capital for regions that are undergoing transformation, like San Leandro is now undergoing.

    So my suggestions here focus not on addressing the budget crisis, but on how to improve San Leandro overall for current and future citizens. Hopefully these measures will have the effect of stimulating economic growth in the city through human capital. Here are some ideas for how to attract a new "creative class:"

    -Make San Leandro much friendlier to start up companies by offering business incentives like reduced or free rent for a limited time, or free help with business licensing. How about marketing the abandoned industrial wharehouses to green-industry start ups? We can revitalize the manufacturing base in the city and offer employment to more residents of San Leandro.

    -How about converting street parking to permit parking? A few of the city's streets are permit parking streets, but let's expand this. While some residents may grumble, it would alleviate congestion on our streets, provide an incentive for public transportation, and help to clean up abandoned vehicles. Importantly, it would also raise money for improved roads and other public services. The city could offer one free permit to each household to reduce the costs per family.

    -How about converting some of the brownfields around the city to public gardens that "rent" plots to people who want a garden but have no space for one? Or not charge people at all but encourage them to plant in these gardens so the task of beautification is not a burden on the city budget.

    Some measures the city can take to appeal to a more environmentally conscious generation of first time home buyers doesn't cost much at all--like introducing city policy to ban plastic bags or holding volunteer clean up days to beautify neighborhoods, or making the city more walkable by encouraging vendors scattered around the city to relocate to abandoned storefronts downtown.

  2. Thank you for adding your comments and participating in the debate on how to improve San Leandro. I hope others add their comments as well. Many of the topics you have raised are ones I plan on addressing in the future.