Thursday, May 17, 2018

Comment on City of San Leandro Plans for Parcel Tax in November 2018

I support tax measures that enhance the public services and programs as long as I am confident the money will be well spent (which requires at a minimum that the public agency is currently managing its budget well).
Accordingly, I am opposed to the hasty and ill-planned effort by the City of San Leandro to place a parcel tax measure on the November 2018 ballot. The City is running a significant budget deficit due to exploding pension costs for public safety workers. Any funds raised in the new tax will be used to backfill this deficit and not address the cause of the City budget deficit nor result in any sustained, enhanced services for our community.
Moreover, the San Leandro school district's parcel tax is expiring in June 2018. The district is managing its funds well. Renewing its parcel tax is vital for the continued success of our schools. If the City Council places its own parcel tax on the same ballot as the school parcel tax, the City Council will likely cause both measures to fail (as each requires 2/3 support for approval).
The City Council, if it proceeds with a parcel tax this November, is risking inflicting significant damage to the partnership between our City and schools that so many of us (myself included) have worked extremely hard to foster and enhance for the benefit of the children of our community and welfare of all San Leandrans.
Below is an article in today's San Leandro Times on the City parcel tax under consideration.
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City Council Looking at Parcel Tax
Tax money wanted for rising police, fire salaries, pensions
By Amy Sylvestri SAN LEANDRO TIMES • 05-17-18

The San Leandro City Council is considering asking taxpayers to open their wallets and approve a special parcel tax for the police and fire departments.
The City Council voted unanimously on May 7 to begin the process of putting a parcel tax for public safety on the November ballot, which would largely go to police and fire salaries and pensions.
The next step will be to poll the public to see if there is enough support to pass the tax.
It’s an election year and the endorsements of the police and fire unions can give a candidate a boost. More than half of the council is up for reelection in November.
But the tax may be a tough sell to voters – as the city’s budget projections show it will be in the red for at least the next decade, due to rising expenditures.
The voters have approved four other tax measures in less than five years. Measure HH passed in 2014 and extended and doubled to a half-cent an older sales tax. Measures NN (a tax on marijuana sales), OO (a tax on warehouse space), and PP (a hotel tax) were passed in 2016.
The new public safety parcel tax is being considered because the city faces looming unfunded pensions. Also, the police and fire unions say they need more money for equipment and staffing.
Currently, the fire department wants $650,000 for new vehicles and equipment, as well as money for additional crew members. The police say they need $400,000 for new radios.
But by far the biggest expenditures come from salary and pension costs.
Currently the San Leandro Police Department accounts for $40 million of the city’s $112 million budget expenditures, which funds 135 staff members – 93 of which are sworn officers. The average annual cost of an officer is $270,000 including benefits.
The city contracts fire services with the Alameda County Fire Department at a cost of $23.7 million per year, which pays for 63 firefighters in town.
The amount of the tax is still to be determined after public polling results. The city is considering taxing an additional $140 per parcel, which would bring in $6 million per year.
Yet to be decided: commercial and residential priorities could be taxed a different rates, the tax could be assessed based on size or per parcel, exemptions for seniors and disabled people could be considered.
Only one public speaker addressed the City Council regarding the tax. Sean Burrows of the firefighters union unsurprisingly said that he’d like more funding and said that putting a tax on the ballot couldn’t hurt because it gives the public a chance to make the decision.
Former Mayor Stephen Cassidy emailed a statement Monday saying that the city shouldn’t attempt to ask for more taxpayer money at the same time it is forecasting 10 years of budget deficits and has $188 million in unfunded pension costs.
“Exploding pension costs constitutes the cause of the city’s looming fiscal crisis, (so) San Leandrans will legitimately ask why the city has not immediately cut its expenditures and entered into negotiations with employees to reduce pension costs prior to seeking any new tax,” wrote Cassidy. “There will not be (enough) support in the community for a parcel tax to fund rising and unsustainable pension costs for public safety officers.”
Councilman Pete Ballew acknowledged that he has spoken with several residents who are concerned about the city’s finances.
“I haven’t even asked the public; they’ve volunteered it,” said Ballew. “They are very vocally wanting to know what we are doing to raise revenue and lower expenditures.”
Ballew, who is a former police officer, said that the city’s cops and fire personnel are their “own worst enemy” because he says they do their jobs so well that he public might not think they need more staff or funding.
Aside from the issue of public support, another challenge will be a significant time crunch – the city usually likes a full year to work on a tax measure and it’s now less than six months to election day.
Councilman Ed Hernandez countered that waiting might not pay off if there is an economic downturn in the meantime.
“If we don’t do it now, the probability of it passing in 2020 may actually be less,” said Hernandez.
Mayor Pauline Cutter ultimately voted to go ahead with the polling, but said she was wary of rushing the tax and having it result in an unsuccessful vote.
“I hate to be the lone man out but I’m not sure this is the right thing for right now,” said Cutter. “I’m just worried this is going to be back to bite us and we won’t be supporting our police and fire like we should.”
City Council members are all vocal about that support because the backing of those unions can be helpful during their campaigns. This November, Cutter, Councilman Deborah Cox, Councilman Lee Thomas, and Councilwoman Corina Lopez are up for reelection. Councilman Benny Lee is in the middle of his second term, but is running for mayor against Cutter.
The school district is also considering a parcel tax of its own, which could crowd the ballot and potentially discourage voters from saying yes to both.
Another challenge is that earmarked parcel taxes require a supermajority of two-thirds for approval.
The costs of getting a parcel tax on the ballot would be about $130,000 including consultant’s feels, the survey, and election costs, according to a city staff report.
The City Council said they want the police and fire unions to chip in on the the costs of the survey.

Monday, April 30, 2018

A Parcel Tax for San Leandro Schools

I support a measure that would raise revenue for our local public schools to lower class sizes. California has some of the most overcrowded classrooms in the nation. Large classes are an obstacle to student achievement and cause stress for teachers leading to greater teacher turnover and less young persons entering the profession. 
The school district's current $39 annual parcel tax expires on June 30, 2018. 
Here is a recent letter to the San Leandro Times from the local teachers' union President Jon Sherr on this topic:
There has been a quiet renaissance in the San Leandro public schools over the last 5 years. 
The changes have been numerous and when taken as a whole, dramatic. 
A partial list includes: increased Advanced Placement enrollment leading to a recent award by College Board naming SLHS a national leader (San Leandro Times, April 12), SAT testing for all high school juniors, ongoing improvements to each school’s facilities, teacher-led staff development, the maintenance of a comprehensive Career Technical Education Program, state-of-the art K-12 libraries, and technology improvements including bringing the ratio of computers to students from 1 to 40 to 1 to 1 in four years.
Not everyone may be aware of all these improvements, but our district has grown by over 320 students in the last 2 years while neighboring districts have seen declining enrollment. Parents know good things are happening in our district. 
The San Leandro Teachers’ Association has worked collaboratively with district management to usher in these improvements. It has been a dynamic and exciting time of growth. We look forward to continuing the work of improving our schools for the children of San Leandro. 
Our community has been very generous in passing construction bonds to support the building and upgrading of facilities. It now time for our community to consider supporting a modest parcel tax to insure that the trajectory of program improvement continues. San Leandro is one of the few surrounding communities that does not have a parcel tax. 
Our neighboring districts understand that state funding for schools is inadequate. We have made huge strides, but it begs the question, what more could we achieve with greater community support? The answer is clear…a parcel tax would position us to build upon this renaissance and create more opportunities for the children of San Leandro. 
—Jon Sherr
San Leandro Teachers’ Association

Monday, April 9, 2018

San Leandro Budget Presentation Tonight

Tonight, Apr. 9th, 7pm at San Leandro City Hall, City Budget Director will provide budget update. What's unstated in the presentation is City is running such high annual deficits that it is on target to burn through all of its reserves - including $5 million set aside in case of a natural disaster - in less than 5 years. This is occurring despite a strong local economy and City annual revenues reaching an all time high level of over $110 million.

Tuesday, March 27, 2018

Opposition to SB 827: Radical Change & Anti-Democratic

California Senate Bill 827 pending in the Legislature seeks to address a serious concern (the housing crisis) in a fundamentally undemocratic manner that will disrupt the lives of countless Californians. 

Here is a video of my comments concerning the bill before the San Leandro City Council on March 19, 2018, asking that they place on a future agenda consideration of a resolution in opposition to the bill. If you agree with me, please write the citycouncil@sanleandro.org and ask that they oppose the bill.







#SB827 effectively rezones millions of properties across California including hundreds if not thousands of homes in San Leandro including in the Farrelly Pond, Best Manor, Cherry Wood, Broadmoor, Estudillo Estates, Assumption Parish, Upper and Lower Bal, Halcyon Foothill, and Floresta Gardens neighborhoods.  

If you live in a home on a parcel designated for single family homes that is a certain proximity (1/2 mile in general) to a BART station or any AC Transit bus stop where the bus comes 4 times in an hour during the commute, SB 827 changes the zoning for your house. You are now deemed under state law to live in a "transit hub."

What does this mean? Your house has been rezoned. Your neighbors' houses have been rezoned. Depending on the width of your street, a developer could build a 5-8 story building - with no parking and maximum possible number of units - immediately adjacent to your house - in your formerly single family residential neighborhood.

SB 827 represents radical change to California land use law. It deprives residents of their right to petition local government and shape the future of their communities. The bill transfers the power over zoning and land use decisions from City Hall to Sacramento. 

We are no longer talking about NIMBYism where one set of neighbors tries to stop development on a parcel that they do not own in their neighborhood and, importantly, where the proposed development complies with the local zoning code.

SB 827 takes a blowtorch to the zoning of cities across California. Its target is the single family home. The long range goal of SB 827 proponents is the construction of a sea of apartment complexes throughout single family residential neighborhoods in San Leandro and in cities statewide (though conveniently leaving out most suburbs and not affecting commercial or industrial properties close to mass transit). 

The ends should never justify the means. Please call on our political leaders to oppose SB 827.

Want further information? Want to see how your house is affected? This pro-SB 827 website maps out its impact: https://transitrichhousing.org/

Want to read SB 827? Visit https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB827

Want do something about SB 827? Democracy is not a spectator sport. If many of us act here in San Leandro and across the state we can defeat SB 827.

Please contact 

1) Our Assemblymember Rob Bonta 

Phone Number
(916) 319-2018

email - use the link here

2) Our State Senator Nancy Skinner

Phone Number
(916) 651-4009

Email - use this link


Those are the most important. They are the ones voting on SB 827. Start with them please.

3) Finally, again you can contact our Mayor and City Council at citycouncil@sanlenadro.org and ask that they adopt a resolution opposing SB 827.

Wednesday, March 21, 2018

Self-Driving Cars Are Safe Until They Encounter The Unexpected (Which Should Be Expected)


I don't understand why police officials rush to make a statement not based on the facts. 

On Monday, the day after the fatal Uber crash in Arizona, Sylvia Moir, the police chief, told reporters that from her viewing of the video, it appeared that neither the driver nor the self-driving car were at fault. "It’s very clear it would have been difficult to avoid this collision in any kind of mode,” Moir stated. "The driver said it was like a flash, the person walked out in front of them." We were led to believe the victim entered the roadway suddenly right before the collision.
Now we learn that (1) the victim was in the roadway already when struck, (2) the victim could be seen from a considerable distance before she was struck, (3) the driver in the Uber self-driving car was not acting as a backup, e.g. she was not looking at the road, (4) the Uber vehicle neither slowed down nor tried to swerve to avoid the collision.  The car's technology - video, radar & other systems - failed.
It's a basic duty of all drivers that if a person is visible in a roadway - regardless of whether or not she in a crosswalk - to stop or take other action to avoid the collision.
The idea that autonomous driving vehicles will make us all more safe and reduce vehicle fatality places a greater faith in computers than I believe is warranted - at least for the next decade.

Saturday, February 17, 2018

Florida School Shooting: Translating Anger Into Action

The Florida shooting has left me so angry and upset with our President, Congress and society as a whole. We value the right to bear arms to such an extent that it is perfectly lawful for individuals to own military grade weapons that have one purpose only: kill scores of people in just a few minutes. 
What has also affected me is having a daughter who is a freshman in high school. Five of the victims were 14-year old girls like my daughter. I can't imagine the grief, sorrow and rage all of the parents of the victims must be experiencing. 
As Mayor, after the elementary school massacre in Newton, Connecticut in 2012, I joined with over 700 other Mayors in calling for Congress to pass legislation to take high capacity rifles and ammunition magazines off our streets. That did not obviously occur. I plan on channeling my outrage into donating to Democratic candidates for Congress this Fall and supporting gun control advocacy groups.

Friday, February 16, 2018

San Leandro's Pension Crisis

Rapidly increasing employee pension costs pose a grave threat to San Leandro's solvency. Absent action by the City Council, programs and service we rely upon for our safety and quality of life in San Leandro will suffer significant budget cuts in as little as four years, and only get worse thereafter. Despite the booming local economy and recently adopted tax measures, the City budget is in the red with no end in sight for the deficit spending. By Fiscal Year 2021-2022, current projections show the City will have exhausted its reserves for economic uncertainties even if the economy continues to expand. I outlined solutions that must be undertaken to avoid the impending fiscal disaster on February 13, 2018, at a City Council work session. You can view my comments on YouTube.

The entire work session can be viewed at http://sanleandro.granicus.com/MediaPlayer.php?view_id=2&clip_id=1025 Here is a copy of the San Leandro Times article on the issue: City Unprepared for Looming Pension Costs By Amy Sylvestri, San Leandro Times 02-15-18 The City of San Leandro’s pension costs have doubled in the past four years and will continue to rise as more employees draw their pension and live longer. The City Council held a pension workshop Tuesday night and heard some grim news about the financial future from California Public Employee Retirement System (CalPERS) strategy manager David Teykaerts. San Leandro currently has $210 million worth of unfunded pension [and retiree healthcare] liabilities looming, compared to $105 million in 2014. Unfunded liabilities are costs the city must pay in the future, but doesn’t have money for. “To state the obvious, this is not something we’ll be solving quickly or easily,” said Jeff Kay, the city’s interim city manager. The sole public speaker at the meeting was former mayor Stephen Cassidy, who said the city should not look to the state or CalPERS for solutions, but rather take the matter into its own hands. “I do believe the city is in a dire situation,” said Cassidy. “The clock is ticking. You have to come up with a solution. You have to stop saying ‘this is a problem everyone has,’ or ‘we’ve got to look to the state for a solution.’” Cassidy said the obvious solution would be to make city employees contribute more to their pensions to ease the amount the city has to pay. Mayor Pauline Cutter said that asking city employees to contribute more would be “difficult” and may lead them to leave San Leandro for cities with more generous pension packages. Instead, the city’s chief response is to mitigate the pension debt by creating a fund to set aside for unfunded pensions. Over the past four years, the city has put $14 million in that fund, which is equivalent to just about one year of city pension costs. But during those same four years, pension costs have risen by another $105 million. Kay said the looming unfunded liability problem is combination of issues including higher employee salaries and pensions, longer retirements, and lackluster investments. CalPERS "guarantees" its pension payments, meaning that if investment returns don’t come in, it is up to cities to bridge the gap and make up for any losses. Overall CalPERS return on investments has been 4.3 percent over the past decade, falling short of its goal of 7 percent and accounting for an additional strain on cities who have to make up the difference. But the returns tend to even out over time, and average 8.4 percent over the past 30 years. Another problem CalPERS faces is that the number of active employees paying into the system will soon be eclipsed by the number of retirees drawing pensions. In 2001, 740,000 active employees were paying in and 370,000 retirees were drawing a pension. In 2015, 800,000 employees were paying in and 611,000 were taking a pension. “The numbers are skewing, and not in our favor,” said Teykaerts. Another consideration is that people are living longer and therefore receiving their pension longer. “People are living longer and that’s great, but make no mistake, that is a problem for pensions,” said Teykaerts. In 1994, the average man drew a pension for 25 years before his death and the average woman for 30. In 2017, it’s 29 years for men and 32 years for women. “Living two years longer, that’s 24 more pension checks and that money has to come form somewhere,” said Teykaerts. Kay said that because almost every city in California will be facing a pension crisis, they can work together to find solutions. “The upside is, we can work together, pool ideas, and lobby for change at the state level,” said Kay.

Thursday, February 15, 2018

Thoughts on Florida Shooting & Active Shooter Police Excercises

Seeing photos of the victims of the Florida school shooting is heart wrenching. My heart goes out to the families and friends of the loved ones who died. Such beautiful young people taken away by the act of one person, obviously troubled and obviously equipped with a military-grade weapon that no civilian in our society needs or should possess.
What happened in Florida reminded me that the San Leandro Police Department, 5 years, ago conducted a major active shooter exercise at San Leandro High School in coordination with the school district, Alameda County Fire Department and Paramedics Plus. Subsequently, the police department undertook a similar exercise at the Bayfair Mall.
I had advocated that the police department undertake mock active shooter exercises. At the time, some in the community criticized me for supporting these exercises because, they claimed, these were such rare events that it was a waste of city money to train for them.
Today, mass killings have sadly become part of the American experience. Since a gunman killed 20 first graders and six adults with an assault rifle at Sandy Hook Elementary School in 2012, there have been at least 239 school shootings nationwide, resulting in 138 deaths. 
Cadets at the police academies are trained on how to respond to an active shooter. Our police department throughout the year reviews procedures and studies how other departments handled such situations as they occur.
Here is a video clip of the 2013 exercise at San Leandro High School: https://www.youtube.com/watch?v=Aox-bWoeBxk

Wednesday, February 14, 2018

Spend Valentine's Day At A Community Broadband Workshop

Tonight there is a Community Broadband Workshop at 6:00 PM at the Main Library (Lecture Hall): 300 Estudillo Avenue.

Yes, the City is paying a considerable amount of money to a consultant to develop a broadband strategy and the City and consultant chose Valentine's Day to hold one of the workshops. Could they have picked a worse night if they wanted strong community input.  It's been my view that the City Council doesn't need a consultant to tell them what they already should know: We want Lit San Leandro - ultra high speed and affordable broadband - extended to our residential neighborhoods.

Leaving that all aside,  below are the details on this project: 

"In 2011, the City of San Leandro executed a License Agreement with San Leandro Dark Fiber to build a fiber optic network specifically to advance the City’s economic goals. On the heels of the Great Recession, the priority was to ensure that San Leandro businesses would have access to state of the art telecommunications infrastructure, enabling fast connection to the internet and a host of new “smart” technology applications. The first facility to be lit up was the Main Library!

Lit San Leandro has been successful, empowering the City to attract new software and hardware businesses, new investment and supporting our existing businesses to grow through improved technology. To date, almost 300 businesses have connected to the internet at Lit San Leandro’s fiber optic speeds. Additionally, all San Leandro Unified School District sites now access the internet via a 10 gbps connection.

In 2017, the City Council agreed that it was time to create a Fiber Optic Master Plan to identify broadband expansion opportunities and priorities for all our community stakeholders, including San Leandro residents. At this Residential Community Broadband Workshop, you will discover the rapidly expanding technologies available through broadband at home. With your participation, you can help us to identify your priorities. These priorities will be considered by the City Council for inclusion into the final Fiber Optic Master Plan.

Thursday, February 8, 2018

San Leandro Facing New Fiscal Crisis

Next Tuesday evening (2/13 at 7 pm at City Hall) is an important meeting concerning our City’s solvency and the services we as San Leandrans rely upon. CalPERS officials are coming to San Leandro to provide the City Council an update on pension benefit costs.
Some may say this is equivalent to the wolf providing an update on the status of the chicken coop. Despite the inherent self-interest of CalPERS officials to downplay the severe fiscal threat San Leandro is facing from rising pension costs, I am hopeful that the City Council will be provided accurate information and ask demanding questions. Why is the presentation important? The City Council last year approved a two-year budget that included an operating deficit for the first time since San Leandro emerged from the Greet Recession. San Leandro is having to draw down reserves to cover its deficit which stands at $8.2 million this and next fiscal year. The good news is the City’s reserves for economic uncertainty are strong, standing at $23 million at the beginning of this fiscal year. The bad news is the City is projecting operating deficits for the next decade with reserves for economic uncertainty being exhausted in 4 years. What is the cause of the deficit? First, it is not a lack of revenue. For the first time ever, since 2015, San Leandro’s General Fund revenues exceed $100 million. The local economy is booming. Plus, Measure HH passed in November 2014 boosted sales tax revenue by $10 million. As recently as 2015, the City had a General Fund surplus of $12 million. But in 2015, employee salary and benefit costs were $42 million annually. Next fiscal year the cost for employee salaries and benefits is projected to reach $55 million. Driving this surge is the annual bill San Leandro must pay CalPERS for pension benefits. In 2005, the bill the City paid CalPERS $5 million. This fiscal year the cost is $12.5 million. In 5 years, the CalPERS bill is projected to rise to $24-$30 million annually. In short, San Leandro has an expenditure driven structural deficit due to exploding employee pension costs. Every new dollar in revenue the City earns over the next 5 years will have to be dedicated to paying the CalPERS bill. But it will not be enough. The City will burn through it reserves triggering devastating cuts to services and programs. Come to the City Council work session on next Tuesday night at 7 pm at City Hall to learn more, ask questions of the City Council and see what solutions they may have to the impending fiscal disaster.
And to put San Leandro's situation in context of what's happening in other CA cities check out: https://www.mercurynews.com/2018/02/08/borenstein-aint-seen-nothing-yet-pension-cost-rise-just-starting/

Wednesday, January 31, 2018

An Important San Leandro City Council Meeting On Monday, Feb. 5th, 7 pm

This message was posted on NextDoor by San Leandro resident Aaron Bukofzer:

"This coming Monday, February 5th, the San Leandro City Council will be holding a meeting at which they will be discussing a process for updating and improving the Zoning Code. Many of us from the community believe that we now have an opportunity to close some of the loopholes created by the prior Zoning Code amendments in 2016. We want to make sure that future development is of an appropriate scale that complies with the intent of the 2016 amendments that were enacted with substantial public input. To that end, we've met with with members of the City Council in recent weeks. Also, on Jan 8th, we attended the City Council meeting and raised three issues during the public comments section. Evan Adams spoke about ambiguities in the General Plan that could be interpreted as saying that all P-zoned properties should be consider "Downtown mixed use". Evan pointed out the absurdity of this interpretation by showing a P-zoned parcel next to Washington Elementary School, another in the Manor near Porky's Pizza and three more on Hesperian literally on the edge of San Leandro city limits. I spoke about the changes to the zoning code that opened up P-zoned parcels to residential development. These changes were made in 2016 as part of a normal update occurring roughly every 10 years, and also in response to community feedback from the first 1388 Bancroft proposal. The intent was to allow up to 24 units/acre on P-zoned properties. This was done by referencing an existing RM-1800 designation that allows 24 units/acre, however, RM-1800 also allows structures up to 50 ft when P only allows 30 ft. I highlighted an FAQ produced by Staff during the 2016 discussion clearly indicating the intent was to limit building heights to 30 ft in the P district. A copy of the FAQ is available at: https://www.sanleandro.org/civicax/filebank/blobdload.aspx?blobid=25699 or click here for a pdf of the document.
Lindsay White spoke about the need for regulations regarding car stackers next to single-family homes. She and her fiance, Dave Ruedi, built a mock of a 13 ft fence and took pictures of it on their fence line that abuts 1388 Bancroft. This is visually very compelling as 13 ft is nearly the height of the top of their roof line. Our request to the City Council was to address the first two issues as clarifications of the intent of 2016 decisions. The car stacker issue is new topic. The Jan 8th City Council meeting was a working meeting so there was no avenue to immediately address the issues we raised. The next City Council meeting was Jan 16th and was a regular meeting. District 1 Council member Debra Cox made a motion that our issues be addressed. The motion passed and the matter was referred to Staff. Staff replied with a report stating they have numerous issues with how the current zoning code is written and have a list of 38 clean-up items they'd like to address. Staff also proposed a process for doing a major clean up of the zoning code. The proposal is a two-phase approach with a long timeline. The first phase includes dealing with updates to the residential section of the code and, likely, won't finish until the end of 2018. We are concerned about the timeline. The staff report is available at: https://sanleandro.legistar.com/ViewReport.ashx?M=R&N=Master&GID=191&ID=3330826&GUID=E662EF05-EE02-4943-884F-599363FCB9AE&Extra=WithText&Title=Legislation+Details+(With+Text) The City Council has placed this item on the Feb 5th agenda to direct Staff to begin this process. Updating and cleaning up the zoning code is a much needed step, however, we are concerned that clarifications around the 2016 decision to open up P-zones to residential are getting lost in a general clean-up. We feel the items that Evan and I spoke to on Jan 8th need be addressed in a timely fashion. We are not asking for new decisions, rather, to accurately record decisions that were made. We plan to attend the Feb 5th City Council meeting and propose a three-phased approach, where phase zero addresses items that are clarifications of existing decisions."

Tuesday, January 30, 2018

San Leandro Should Authorize Its Dispensaries To Sell Adult/Recreational Cannabis

On the topic of San Leandro finances, the City is counting on taxes from cannabis dispensaries to help it fill its brand new annual deficit. The City is projecting $1 million in 2018-19 from its new dispensaries. 
This would be helpful - but would not close the City's fiscal hole as the deficit may be as large as $7 million over the next two years. Moreover, as I have been working in the cannabis industry since last Fall, I have a specialized knowledge of many of the issues facing cannabis businesses. 
I shared this information recently with the City Finance Director and City Council. In short, I stated the City should exercise extreme caution in its cannabis tax revenue projections. I gave two reasons: 
1) Although the City has authorized 3 dispensary licenses.  Only two operators - Davis Street Wellness Center and Blum San Leandro - appear likely to be opening in 2018. I have no idea if and when the first city licensee, Harborside San Leandro, will open.
2) The legalization of cannabis in California and specifically the authorization of the sale of cannabis to adults 21 and older, e.g. adults no longer need a medical marijuana card to purchase cannabis, is resulting in a major transformation of the marketplace. 
The excise and sales tax paid by cannabis users under state law as of January 1, 2018, is the same regardless of whether the purchase is for medical or adult/recreational cannabis (absent the small minority of patients that obtain their card directly from the state). Thus, most patients presently with a medical card for cannabis will not renew their cards in 2018 or 2019 as the card no longer serves any purpose and it costs approximately $50 to renew a card. 
Dispensaries in the communities immediately adjacent to San Leandro - Oakland and unincorporated Alameda County - are permitted to sell adult/recreational cannabis, e.g. you don't need a medical marijuana card to purchase the cannabis. Hayward's new ordinance also allows for dispensaries to sell adult/recreational cannabis. 
However, San Leandro's cannabis ordinance presently bans the sale of adult/recreational cannabis. Only persons holding a medical marijuana care are allowed to purchase cannabis.
Do you see what I am getting at? The marketplace for cannabis this year and next will rapidly shift from medical marijuana sales to adult/recreational use sales. Absent action by the San Leandro City Council, dispensaries located here will increasingly have to turn away customers. As a result, the City will receive far less tax revenue. 
Alternatively, if San Leandro changes its ordinance to allow adult/recreational sales of cannabis it will financially benefit the Davis Street Wellness Center as well as the other dispensaries operating in San Leandro. And it will also mean that local sales of cannabis on the black market (which of course do not generate sales tax revenue for the City) should diminish as adults can now buy high quality cannabis, tested by a state approved lab, and sold by a state licensed dispensary. 
Please note - I work as General Counsel for Bloom Innovations, e.g. I am the in-house attorney for the company. The CEO of Bloom Innovations is also the CEO of the Davis Street Wellness Center. I am not an employee or director of the Davis Street Wellness Center. 
Cannabis is now legal in California. If the City wants tax revenue from cannabis sales in my view it should allow all local dispensaries to sell the product to adults whether for medicinal or recreational use. 
What are your views?

Friday, January 26, 2018

San Leandro City Budget Turns From Black To Red


Despite a booming local economy, a $5 million general fund surplus when I left office, and overseeing the Yes on Measure HH campaign that resulted in a $10 million boast in sales tax revenue in fiscal year 2015-16, the City of San Leandro is now running multi-million dollar deficits with no end in sight. 

How could this occur? Exploding employee pension costs is the prime reason. Employee salary and benefit costs jumped $7 million from fiscal year 2016-17 to the current fiscal year.

Mayor Cutter and City Council needed to continue to make progress on employee pension costs in labor negotiations and didn’t. These photos are from San Leandro Finance Director David Baum’s presentation at the city planning retreat on January 20, 2018.  Here is a link to presentation powerpoint.








Here is an article on the San Leandro budget deficit from the San Leandro Times:

City Budget Forecast:  In the Red
February 1, 2018

The City of San Leandro’s unfunded pension costs have doubled in the past four years, according to a recent budget presentation, which also shows that the city’s general fund is projected to be in the red over the next several years. City Finance Director David Baum says San Leandro is currently looking at $210 million worth of pension liabilities looming, compared to $105 million in 2014. 

Former Mayor Stephen Cassidy has long said the pension system in San Leandro and beyond is untenable in the long run. Cassidy said the city took some measures during his time at City Hall – including having employees pay a percentage of their salaries into CalPERS – but the city hasn’t done enough since then. 

“Despite a booming local economy, a $5 million general fund surplus when I left office plus a $10 million boost in sales tax revenue following the passage of Measure HH in November 2014, the City of San Leandro is now running multi-million dollar deficits with no end in sight,” Cassidy said. “The City needed to continue to make progress on reducing employee pension costs in labor negotiations and didn’t."

Baum said the reason pension costs to the city have ballooned is due to poor investments by the California Public Employee Retirement System (CalPERS), the pension program for state and city workers. CalPERS manages the largest public pension fund in the United States, with over $320 billion in assets. 

Over the past decade, CalPERS has retuned 4.4 percent compared to the Standard & Poor 500’s 7.1 percent, according to Barron’s. And CalPERS "guarantees" its stock investments, meaning that if returns don’t come in, it is up to cities to bridge the gap and make up for any losses. “There’s no question the amount of unfunded liabilities have gone up dramatically and that’s because CalPERS hasn’t been getting the returns,” said Baum. 

The city has tried to mitigate the pension debt by creating a Prioritizing Unfunded Liabilities Liquidation (PULL) investment fund. It’s an irrevocable trust account that can only be spent on pensions, Baum says. So far, the city has about $14 million in PULL – which is equivalent to just about one year of pension costs. The exact amount that will be put in the PULL account this fiscal year will be determined by the City Council over the next few months. They will meet in a budget work session on April 9 and the final budget will be adopted in June. Baum said the minimum amount they’ll put in PULL this fiscal year is $750,000 and he estimates the actual figure will be around $2 million. Baum recently gave the 

Monday, January 22, 2018

Statement Concerning San Leandro City Manager

Here is my statement on the sexual harassment and abuse of power allegations made against San Leandro City Manager Chris Zapata:

It saddens me to say the following as I know and worked closely with City Manager Chris Zapata for three years:  The Mayor and City Council must place him on administrative leave.  I say this not because Rose Johnson, the longstanding director of the Davis Street Family Resource Center, has alleged that the City Manager sought to use his power over City resources to pressure her into a sexual relationship.  I do not claim to know if this allegation is truthful.   

What I do know is that last week the City Manager issued a 23-page, single-spaced memorandum severely criticizing Rose Johnson and those he blames for the allegations made against him.

The appropriate action for the City Manager would have been to issue a short statement denying the allegations and pledging full cooperation with the City’s internal investigation.  Instead, the City Manager issued a rambling, incoherent diatribe filled with salacious gossip, inflammatory accusations, and petty boasts. 

In my opinion, Chris Zapata has sought to destroy Rose Johnson’s professional reputation plus the reputations of former Council member Gordon Galvan and current Council member Ed Hernandez, who appears to have the gall, in the eyes of the City Manager, to question his decisions, in retaliation for the allegations of sexual harassment and abuse of power made against him.

The City Manager’s memorandum constitutes a warning shot to the Mayor, City Council members, and other civic leaders that he will reveal private and potentially embarrassing information about them to protect his position.  The memorandum further sends a powerful message of intimidation to current and former city employees who may have experienced similar alleged harassment from speaking out. 

By issuing the memorandum in his capacity as City Manager, Chris Zapata has exposed the City to additional liability.  By not having placed him on a leave of absence, the Mayor and City Council are signaling their tacit approval of the City Manager’s grossly unprofessional conduct in releasing the memorandum and failing to protect others from retaliation and intimidation.

Thursday, January 18, 2018

The Future of Our City: City Council Planning Session

This Saturday, January 20th, the San Leandro City Council is holding its annual planning session at the San Leandro Senior Community Center, located at 13909 East 14th Street, from 8:30 a.m. until approximately 2:00 p.m. The meeting will include opportunities for public comments and questions.

Why is this meeting important? For two reasons: (1) the City Finance Director provides a multi-year forecast on the city budget and (2) the City Council sets goals and priorities for our local government for the coming year and beyond.
If we want to influence what issues our local elected officials should address, Saturday is the time to speak up.

In addition, the budget update is extremely important. Neighboring cities have reported that despite rising revenues they expect to run deficits in the coming years due to continuing increases in pension and retiree health care costs.

San Leandro has been running a budget surplus the past several years. That all may be about to change (or already has changed). Further, it appears that the City has not brought in third parties to comprehensively examine its pension and retiree health care costs since 2013.

Wednesday, January 17, 2018

What is the core measure of leadership by a Mayor & City Council?

Timely resolving significant community problems is my answer. Last night the San Leandro City Council had the opportunity to address a significant community concern pertaining to a zoning matter that affects not only the Estudillo Estates neighborhood but also the Broadmoor, the Manor and South San Leandro. Instead of taking clear and decisive action, the City Council deferred to staff to develop a proposed course of action without any set timeline or a defined process. One Council member voiced concern that taking any other action would be "micro managing staff." Accordingly, I sent the following message to the Mayor and City Council today: Dear Mayor and City’s council - Timely addressing significant community concerns is not micro managing staff. Rather it is the essence of leadership. You are given political power to solve problems and lead our community. That requires decisiveness. That requires setting priorities for staff and even disagreeing with staff on some occasions. The Council has the fiduciary responsibility of acting in the best interests of the people of San Leandro. Case in point: You had a wonderful presentation last night on all the good that the new San Leandro Hospital is doing and its plans to do more. None of that would have occurred if I and the then City Council followed the City Manager and staff’s recommendation which was to not provide any money to save the hospital. The deal to save the hospital would have collapsed. Furthermore the failure of prior Mayor Santos to develop a plan to save the hospital was a critical factor in why the people of San Leandro entrusted him with only one term as Mayor. We are now in year three of the controversy over the zoning of Professional district properties. You had the opportunity last night to take a significant step to resolve the controversy in a matter of weeks. Instead you passed the issue onto staff to come up with some type of solution at a future date through an undefined process. Again the essence of leadership by a City Council is timely solving significant community concerns.

Tuesday, January 16, 2018

Need for Independent Appraisal in Sale of City-owned Properties

I sent the following message to the Mayor and City Council today concerning the need for independent appraisal prior to the sale of any City owned properties, including property along the San Leandro shoreline for the proposed Cal Coast development:

I see the City Council has several properties under discussion for transfer/sale in closed session agenda today.

3.A. Closed session pursuant to California Government Code section 54956.8: CONFERENCE WITH REAL PROPERTY NEGOTIATORS Property: Alameda County APN 075 0209 001 00 Agency negotiator: Cynthia Battenberg, Community Development Director Negotiating parties: Wells Fargo Bank Under negotiation: Price and Terms of Payment City of San Leandro

3.B. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Properties: Alameda County APNs 079A 0475 009 04, 079A 0590 001 07, 079A 0590 001 05, 079A 0590 003 00, 079A 0590 002 00, 079A 0590 004 00, 080G 0900 004 01 Agency negotiator: Cynthia Battenberg, Community Development Director Negotiating Parties: Cal-Coast Companies, LLC Under Negotiation: Price and Terms of Payment

Has the City has obtained independent appraisals for the properties in question?

As background, when the City sought to sell the Village Marketplace to David Irmer we did not have an independent appraisal. Staff was resistant to obtaining one and, for a temporary period, so was the majority of the City Council as incredible as that sounds.

Council members Jim Prola and I continued to push for an independent appraisal, which was eventually done. Not surprisingly, following the appraisal, the final price for the Village Marketplace paid to the City/development successor agency was greater than what was initially offered and recommended by staff for the City Council to accept.