Finance Committee
May 12, 2025

Finance Committee
May 12, 2025
Second Work Session:

FYs 26 & 27 Proposed
Biennial Budget Presentation
Pg 1
Background
Pg 2 Meeting Date: May 12, 2025
April 23, 2025 – Finance Committee Meeting:
• Staff Presented a Proposed FYs 2026 & 2027 Biennial Budget • Committee provided feedback:
 FYs 2026 & 2027 – Expenses (less transfers) should be equal to projected revenue  Beginning in FY 2028 – All expenses should be equal to projected revenue General Fund
Forecast
1 AGENDA
General Fund
Estimated Fund
Balance
2 Department
Operating
Reductions
3 General Fund
Transfers
4 Citywide
Operating
Budget
5 Next Steps
6 7
Discussion &
Feedback
8 Pg 2 Meeting Date: May 12, 2025
General Fund 10-Year Forecast
(prior to proposed budget)
($ in millions)
Pg 4 Meeting Date: May 12, 2025
General Fund 10-Year Forecast
(Proposed – April 23, 2025)
($ in millions)
Pg 5 Meeting Date: May 12, 2025
General Fund 10-Year Forecast
(Proposed – May 12, 2025 )
($ in millions)
Pg 6 Meeting Date: May 12, 2025
General Fund Estimated Fund Balance
(Proposed – May 12, 2025)
($ in thousands)
Pg 7 Meeting Date: May 12, 2025
Department Operational
Reductions
Pg 8 Meeting Date: May 12, 2025
City Manager’s Office
Pg 9 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction Details & Potential Impact
Salaries & Benefits ($26,427) ($26,427) Eliminate one (1) PT College Intern Consulting ($50,000) ($85,000) Reduction in space planning, and professional team development Consulting ($73,000) ($73,000) Reduction in communications Consulting ($65,000) ($65,000) Reduction in general consulting needs Marketing ($27,000) ($27,000) Reduction in digital marketing for Citywide communications Program Supplies ($2,700) ($2,700) Reduction of funds for community give-a-ways, and general program supplies
Marketing ($7,000) ($7,000) Eliminate funding for outreach campaign, such as social media ads, etc.

Transportation/Training ($1,400) ($1,400) Reduction in training/travel Program Supplies ($1,500) ($1,500) Reduction in media supplies TOTAL ($254,027) ($289,027)
Community Development
Pg 10 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Salaries & Benefits ($187,714) ($201,171) Freeze Plan Check Engineer (vacant) Consulting $0 ($240,000) Reduction in planning consulting Consulting $40,000 ($80,000) Reduction in housing consulting Notices ($3,150) ($3,150) Reduction in Mobile Home Noticing - Absorb Postage ($1,350) ($3,150) Reduction in Mobile Home Postage - Absorb Grants $0 ($18,000) Reduction in Façade Grant Reduction - One fewer business served by program
Consulting $0 ($70,000) Reduction in Community Preservation consulting - reduced funds for special enforcement projects or abatement
Salaries & Benefits ($17,499) ($17,499) Eliminate request for position reclassification Salaries & Benefits ($17,499) ($17,499) Eliminate request for position reclassification Consulting ($50,000) $30,000 Reduction for economic development consultant; FY27 reflects budget increase for Economic Development strategy implementation Salaries & Benefits ($150,038) ($160,777) Eliminate Housing Program Specialist (vacant) TOTAL ($387,250) ($781,246)
Finance
Pg 11 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Salaries & Benefits ($174,937) ($184,742) Freeze Accountant II (vacant) TOTAL ($174,937) ($184,742)
Human Resources
Pg 12 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Salaries & Benefits ($149,892) ($161,008) Eliminate LTD Human Resources Technician (vacant) TOTAL ($149,892) ($161,008)
Fire
Pg 13 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Fire And Emergency Services ($1,353,632) ($149,323)
Reduction in ACFD contract, including freezing three unfilled positions, 50% reduction in recruit academy size, and reduction in medical equipment replacement
Total ($1,353,632) ($149,323)
Human Services
Pg 14 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Salaries & Benefits ($179,796) Freeze Management Analyst (vacant) Consulting ($50,000) ($50,000) Reduce City funding for the Winter Shelter at First United Methodist Church; pursue County funding to help sustain the program FY25 $100K, FY26 $50K, FY27 $50K Consulting ($100,000) ($100,000)
Eliminate funding for Building Futures Winter Shelter Motel Voucher program. Building Futures may continue providing this program in limited scope using other funding or may discontinue completely. Building Futures expressed capacity issues with continuing to run this program, which serves medically fragile homeless individuals. FY25 $100K, FY26 $0K, FY27 $0K Consulting ($50,000) ($50,000)
Reduce funding for Family Violence Law Center (FVLC) 24/7 Mobile Outreach program. Through this agreement, FVLC retains a portion of funding for case management for San Leandro residents, as well as subcontracts to SAVE for Health Relationship and Violence Prevention presentations in SLUSD and Building Futures for domestic violence case management. FY25 $70K, FY26 $50K, FY27 $50K. SAVE and Building Futures will be funded using FY25 funds to reduce impact in FY26 and FY27.

Consulting ($50,000) ($50,000)
Eliminate direct allocation funding to Davis Street, which was funded through ARPA; future program funding will be awarded through the CAP grant process. Davis Street recommended for FY26/FY27 funding through CAP.

FY25 $47K, FY26K $23K, FY27K. FY25 contract savings of $42K to be carried forward for FY26 Human Services (cont.)
Pg 15 Meeting Date: May 12, 2025
Account Title FY 2026 Reduction FY 2027
Reduction
Details & Potential Impact
Consulting ($15,000) Reduce contribution to Eden I&R (Countywide 211 service). Community members can still access this service. FY25 $40K, FY26 $40K, FY27 $25K
Consulting ($95,000) Eliminate FY27 funding for Vietnamese American Community Center (VACCEB). VACCEB will receive FY26 funding of $95K. FY25 $99K, FY26 $95K, FY27 $0K Consulting ($24,204)
Reduce Building Futures Mobile Outreach for homelessness.

FY25 $147K, FY26 $147K, FY27 $122K. Funding reduction may reduce outreach staff available and reduce outreach days.

TOTAL ($250,000) ($564,000)
Information Technology
Pg 16 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction Details & Potential Impact
Salaries & Benefits ($53,436) ($56,784) Freeze Part-Time IT Technician I (Vacant).

Software Maintenance ($150,000) Reduce software and license costs.

TOTAL ($53,436) ($203,436)
Legislative
Pg 17 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Transportation/Training ($2,360) ($2,360) Reduce staff training.

Memberships ($375) ($375) Reduce memberships.

Employee Recognition ($250) ($250) Reduce employee recognition.

Uniform & Apparel ($205) ($205) Reduce City embroidered uniforms.

Books and tapes ($150) ($150) Reduce purchase of books and tapes.

Program Services ($7,700) ($7,700) Reduce placement of current system for form 700s.

Notices/Publication ($1,000) ($1,000) CPRB reduction in public notice costs / align with prior year.

Forms/Business Cards ($500) ($500) CPRB reduction in costs for outreach efforts / align with prior year.

Event Food & Beverage ($7,800) $5,000 Reduce cost for food for events, FY 27 includes cost for Alameda County Mayor's Conference (City hosted).

Translation ($9,800) ($9,800) Eliminate new software Wordly.

Council Technology ($8,400) ($8,400) Reduce technology budget for City Council.

Council
Transportation/Training ($20,000) ($20,000) Reduce transportation/training for Council to align with prior year levels.

Council Travel ($9,000) ($9,000) Reduce travel for Council to align with prior year levels.

TOTAL ($67,540) ($54,740)
Library
Pg 18 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Salaries & Benefits ($60,329) ($69,853) Freeze Part-Time Museum Curator (vacant) - Remain open for school tours, supporting SLUSD curriculum.

Salaries & Benefits ($35,062) ($35,913) Freeze three (3) Library Aides (vacant) - assignments/tasks will be distributed among current staffing levels.

Salaries & Benefits ($59,069) ($62,769) Freeze Library Clerk and Maintenance Aide (vacant) Salaries & Benefits ($109,497) ($109,497)
Reduction of Library hours of operation: eliminate Main and Manor Branch Sunday hours and reduce Monday open hours to 10-5pm; Freeze PT Librarian I, PT Librarian II, and two PT Clerks
Program Supplies ($631) ($631) Reduce program supplies for Branches and Adult Services.

Uniform ($700) ($700) Eliminate City branded shirts for Library staff.

Books ($20,000) ($20,000) Reduce printed book purchases.

Audio Visal Materials ($500) ($500) Reduce new & replacement of audio/visual collection.

Electronic/Digital
Resources ($32,153) ($36,208) Reduce new & replacement of eContent purchases.

Program Supplies ($5,000) ($5,000) Reduce processing supplies for printed material.

Consulting ($25,000) ($25,000) Reduce funding for community grants awarded by Arts, Culture & Library Commission.

TOTAL ($347,941) ($366,071)
Police
Pg 19 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Employee Recognition ($3,600) ($3,600) Reduce employee recognition Employee Education Reimbursement ($33,000) ($33,000) Budget is captured in Salaries and Benefits TOTAL ($36,600) ($36,600)
Public Works
Pg 20 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Salaries & Benefits $244,377 $263,037 Amend staff allocation between General Fund / CIP Salaries & Benefits ($35,096) ($38,329) Reallocate Environmental Services Manager Salaries & Benefits ($144,358) ($154,641) Reallocate Engineering Manager Salaries & Benefits ($36,259) ($38,079) Reallocate Public Works Director Salaries & Benefits ($123,761) ($129,532) Freeze Intern Position (vacant) Salaries & Benefits ($68,259) ($72,177) Reallocate Maintenance Supervisor Salaries & Benefits ($144,061) ($158,061) Freeze (3) Maintenance Aides (vacant) and (1) Maintenance Worker (vacant); reallocate portion of Traffic Control Technician to Gas Tax Fund Salaries & Benefits ($127,443) ($137,073) Freeze Administrative Assistant (vacant) TOTAL ($434,860) ($464,855)
Recreation & Parks
Pg 21 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Revenue $220,000 $220,000 Additional program revenue
Salaries & Benefits ($27,920) ($27,920) Eliminate staff dedicated to creek education (vacant) Salaries & Benefits ($81,735) ($172,569) Freeze Management Analyst II (vacant) Salaries & Benefits ($88,035) ($88,035) Recreation Specialist III: Beautify Coordinator, Reservation Leads Salaries & Benefits ($11,922) Recreation Specialist II: Camp Hooty, Kiddie College, Youth Sports Salaries & Benefits ($35,096) ($74,473) Recreation Specialist I: Customer Service, Facility Attendants, Park Specialist, Camp Hooty, Kiddie College, Youth Sports
Salaries & Benefits ($107,107) Recreation Leader: Camp Hooty, Kiddie College, Youth Sports Salaries & Benefits ($22,130) Lifeguards: Farrelly Pool Recreation & Parks (cont.)
Pg 22 Meeting Date: May 12, 2025
Account Title FY 2026
Reduction
FY 2027
Reduction
Details & Potential Impact
Consulting ($18,000) ($18,000) Suspend the purchase of Active Net Dashboard Postage & Delivery ($2,500) ($2,500) Eliminate postage; absorb in current budget Employee Recognition ($3,000) ($3,000) Reduce the employee recognition fund Subscription ($4,500) ($4,500) Eliminate professional develop subscriptions Uniforms & Apparel ($5,500) ($5,500) Reduce program uniform and apparel budgets Program Supplies ($16,500) ($24,000) Reduce program supply budgets for various programs/camps Transportation/Training ($5,500) ($6,000) Reduce staff training budgets Notices/ Publication ($1,000) ($2,000) Reduce program translation and printing services Department Supplies ($1,000) ($1,000) Reduce general department / office supplies Entertainment ($2,500) ($2,500) Reduce the special event entertainment Notices/ Publication ($750) ($750) Reduce outscoring of fliers Transportation ($16,000) ($16,000) Eliminate transportation for field trips, Camp Hooty Field Trip Admission ($6,000) ($6,000) Eliminate field trip admission funding from Camp Hooty Security - MCC,SCC, SLFAC ($10,000) ($10,000) Eliminate funding for security guard at SFLAC TOTAL Reductions ($325,536) ($605,907)
Pg 23 Meeting Date: May 12, 2025
General Fund Transfers
Pg 24 Meeting Date: April 23, 2025
Long-Range Financial Forecast
 Long-range financial forecast continues to project a structural deficit, but efforts made to reduce ongoing operational expenses have significantly improved the fiscal outlook.  Strategic evaluation of ongoing reductions to General Fund operating expenses are still needed to ensure that the City is meeting the City Council Fund Balance Policy.  Remain focused on core services.
 Continued General Fund support for Infrastructure / capital needs is growing and unsustainable.  Advance toward the exploration of revenue measure to support growing infrastructure / capital needs.  Council Ask: Increase FYs 26 & 27 by $500,000 for polling and campaign support in preparation of a potential revenue measure.

Citywide Operating Budget
($ in millions)
Pg 25 Meeting Date: May 12 , 2025
Pg 26 Meeting Date: May 12, 2025
Next Steps
Recommend
Proposed Budget to
Council
Consider Additional Funding to
Support Revenue Measure
Campaign
Discussion &
Feedback
Pg 27 Meeting Date: May 12, 2025
Appendix A:

First Work Session:

FYs 26 & 27 Proposed Biennial Budget Presentation*
Finance Committee
April 23, 2025
*Slides 39 and 44 have been updated for corrections.

Pg 28 Meeting Date: May 12, 2025
Finance Committee
April 23, 2025
FYs 26 & 27 Proposed
Biennial Budget
Presentation
Pg 29 Meeting Date: April 23, 2025
Key Driving
Factors
1 AGENDA
Budget Strategies
2 General Fund
Forecast
3 Budget
Overview
4 General Fund
Reductions
5 Capital Funding
Needs
6 Pension &
OPEB
7 ARPA
8 Pg 30 Meeting Date: April 23, 2025
Fiscal Stability
Increased employee costs
Reduce discretionary budgets
to preserve service levels
Raising Pension / OPEB
Capital / Internal Service
Fund Needs
Economic Uncertainty
Key Driving
Factors
Impacting
FY26 & FY27
Budget
Pg 31 Meeting Date: April 23, 2025
Align budget to actual need
and costs
Budget Strategies
Reduce services and supplies; preserve service
levels
Discretionary Costs
Prioritize fleet replacement; defer technology
enhancements; align budget with need and
costs
Internal Service Fund
Temporarily remove all budget allocations for
fixed assets
Fixed Assets
Establish realistic onboarding of vacant
positions, including anticipation of attrition
through retirements
Pg 32 Meeting Date: April 23, 2025
Personnel Costs
What is Fund Balance?
Pg 33 Meeting Date: April 23, 2025
 What is Fund Balance?
• Represents the difference between the City’s totals assets and current/future liabilities. It essentially shows the net available resources in that fund at a given point in time. • Categories of Fund Balance:
• Non-spendable – Resources that cannot be spent.
• Restricted – Resources with external restrictions (i.e. grants). • Committed – Set aside for specific purposes by formal government action. • Assigned – Intended for specific purposes but not legally restricted (i.e. encumbrances). • Unassigned – Available for any purpose.
 What is a Targeted Fund Balance?
• A targeted fund balance percentage refers to the desired level of reserves a government or organization aims to maintain in its General Fund.
• The Government Finance Officers Association (GFOA) recommends that general-purpose governments maintain unrestricted fund balance in their General Fund of at least two months (or approximately 20%) of regular operating expenditures (excluding transfers).

What is Fund Balance? (cont.)
Pg 34 Meeting Date: April 23, 2025
 Why is a targeted 20% fund balance important?
• Ability to pivot for unexpected expenses without resulting in direct to significant service reductions or borrowing.
• Improved ability to weather economic downturns.
• Ability to remain operational during natural disasters. • May impact / improve credit ratings, leading to lower borrowing cost. • Enhanced financial stability and resilience.
 What is the City Fund Balance Policy?
• $5M for Major Emergencies
• 20% of Total Expenditures for Economic Uncertainties
• Set policy meets and exceed industry best practice
What is a Structural Deficit?
Pg 35 Meeting Date: April 23, 2025
 What is structural deficit?
• A structural deficit is a persistent imbalance where a government's spending consistently outpaces its revenue.
 What are some causes that attribute to a structural deficit? • Insufficient revenue or fluctuating revenue
• Unpredictable rate changes to pensions
• Growing infrastructure needs
• Economic instability/uncertainties
• Excessive spending
 Why is a structural deficit is bad?
• Persistent structural deficits are unsustainable.
• Eventually, all available funds are expended, which can put the City in a position of filing for bankruptcy.

General Fund 10-Year Forecast
(prior to proposed budget)
($ in millions)
Pg 36 Meeting Date: April 23, 2025
General Fund 10-Year Forecast
(Proposed)
($ in millions)
Pg 37 Meeting Date: April 23, 2025
General Fund 5-Year Forecast (Proposed)
($ in thousands)
Pg 38 Meeting Date: April 23, 2025
2025-26 2026-27 2027-28 2028-29 2029-30
1Revenue
2 Property Tax $33,776 $35,392 $36,277 $37,184 $38,114
3 Sales Tax $54,874 $56,521 $56,944 $57,547 $58,792
4 Other Tax $29,893 $30,835 $31,452 $32,081 $32,723
5 Other Revenue $31,195 $31,458 $31,868 $32,300 $32,747 6 Total Revenue $149,738 $154,206 $156,542 $159,112 $162,375 7 8Expenditures
9 Salaries & Benefits $75,812 $80,709 $83,875 $87,551 $90,823 1 0 Operating Expenses $76,293 $77,644 $77,200 $78,787 $80,454 1 1 Transfers $7,400 $6,100 $6,200 $6,300 $6,500
12 Total Expenditures $159,504 $164,453 $167,275 $172,638 $177,776 13 14 Net / Use of Fund Balance ($9,766) ($10,247) ($10,733) ($13,526) ($15,401) 15 16 Beginning Balance $54,733 $44,967 $34,720 $23,987 $10,461 17 Ending Balance $44,967 $34,720 $23,987 $10,461 ($4,940) 18 19 Ending Balance as % of Expenditure 29.6% 21.9% 14.9% 6.3% -2.9%

A B C D E F
General Fund Estimated Fund Balance
($ in thousands)
Pg 39 Meeting Date: April 23, 2025
City Fund Balance Policy
Pg 40 Meeting Date: April 23, 2025
City’s Current Fund Balance Policy:
 $5M for Major Emergencies
 20% of Total Expenditures for Economic Uncertainties
Proposed Revision to Other Policies FY 25 & FY 26
 Suspend PULL policy; and
 All unspent funds go toward rebuilding fund balance to meet City Fund Balance Policy in future years
Pg 41 Meeting Date: April 23, 2025
Service & Supplies Net Change
Pg 42 Meeting Date: April 23, 2025
Fixed Asset Net Change
Pg 43 Meeting Date: April 23, 2025
Fixed Asset Reductions
General office
furniture / redesign
(new and
replacement)
Reduction in
equipment rental for
events
Replacement of
tables and chairs at
community facilities
Replacement of park
and tree
maintenance
equipment
Deferred technology
enhancements
Pg 44 Meeting Date: April 23, 2025
General Fund Transfers
Estimated Available General Fund Allocation to CIP Funds or Other Operating Funds: $5.9M Estimated Available General Fund Allocation to Fleet: $1.5M Pg 45 Meeting Date: April 23, 2025
Fleet Replacement Needs
 Ongoing Fleet Replacement Needs
• City Fleet
• Police Fleet
• Fire Fleet
 Procurement Challenges
• Public safety fleet
• Fire Fleet - Estimated date of delivery is approximately 4-5 years from date of order  Legislative Requirements
• Transition to Electric Vehicles (EV)
• Increase costs for EV
 Continue efforts to establish sustainable fund balance for future purchases Unfunded Liabilities
Unfunded liability costs
continue climbing to
FY33
CalPERS rates
impacted by
unpredictable
economic landscape
Leverage investments
in trust to soften the
steep increase
Pension & OPEB
Costs Unpredictability Trust Fund
Pg 46 Meeting Date: April 23, 2025
Pg 47 Meeting Date: April 23, 2025
Supplemental Trust Information
 A pension trust fund established by a city, like San Leandro's, is a separate entity to manage assets for future pension payments. This trust helps stabilize pension costs, mitigate budget challenges, and ensures future financial obligations are met.
 Can only be used to:
• Reimburse City for CalPERS contributions
• Make payments directly to CalPERS
 More flexibility than paying CalPERS directly
• City decides if and when and how much money to put into the Trust • City decides if and when and how much to withdraw to pay CalPERS or reimburse the City  Current funding ratio (including supplemental trust)
• Miscellaneous Plan - 72.5% Funded
• Safety (Police) Plan – 70.9% Funded
Pg 48 Meeting Date: April 23, 2025
ARPA Projects – Funding Needs
Pg 49 Meeting Date: April 23, 2025
Long-Range Financial Forecast
 Long-range financial forecast continues to project a structural deficit.  Continue to explore budget balancing strategies, including expenditure control and revenue enhancements  Remain focused on core services
 Continued General Fund support for Infrastructure / capital needs is growing and unsustainable • Roadways
• Fleet
• Facilities
• Information Technology
 Advance toward the exploration of revenue measure to support growing infrastructure / capital needs  Council Ask: Increase FYs 26 & 27 by $500,000 for polling and campaign support in preparation of a potential revenue measure
Citywide Operating Budget
($ in millions)
Pg 50 Meeting Date: April 23, 2025
Pg 51 Meeting Date: April 23, 2025
Next Steps
Recommend Proposed Budget to
Council
Suspend
PULL Policy in
FY25 & FY26
FY25 & FY26 All Unspent Funds Go
Directly to General Fund
Fund Balance
Discussion &
Feedback
Pg 52 Meeting Date: April 23, 2025