City Council Work Session
April 13, 2026
Proposed
FY 2027 Mid-Cycle
Update
Background
➢ April 23, 2025 – FY 2026 & FY 2027 Biennial Budget (Proposed) Finance Committee • FYs 2026 & 2027 – Expenses (less transfers) should be equal to projected revenue • Beginning in FY 2028 – All expenses should be equal to projected revenue ➢ May 12, 2025 – FY 2026 & FY 2027 Biennial Budget (Proposed) Finance Committee ➢ June 2, 2025 – FY 2026 & FY 2027 Biennial Budget (Proposed) City Council ➢ June 16, 2025 – FY 2026 & FY 2027 Biennial Budget (Adopted) City Council • FY 2026 Adopted Budget – Balanced
• FY 2027 Adopted Budget – Projected Use of Fund Balance/Reserves ✓ Council granted staff more time to identify ways to close the structural deficit in a meaningful way with clear understanding of the impacts on the organization and community ✓ Council directed staff to present FY 2027 Mid-Cycle Update with a Balanced Budget and no projected use of fund balance/reserve in future years
April 13, 2026 2
Sept - Jan
FY 2027
Mid-Cycle Review
and Update
March April
May
July
Council Retreat
Community Engagement (2)
Finance Committee
FY 2027
Mid-Cycle Update
City Council
Work Session
FY 2027
Mid-Cycle Update
City Council
Adoption
Commencement of
FY 2027
Mid-Cycle Update
Where We’ve Been...And Where
We’re Headed
1 2
3 4
5 April 13, 2026 3
Council’s Principles for Balancing the Budget
(use as guidelines to develop and evaluate budget choices)
1. Prioritize core services; no department is immune to reductions
2. Pursue efficiencies
3. Retain City reserves at 20% for economic uncertainty + $5M for major emergencies (define what triggers the $5M) – no increase or decrease
4. Refrain from adding net new projects or programs unless there is an identified revenue source
5. Commit to minimize service reductions that impact the community and avoid layoffs
6. Preserve the health and safety of City employees
7. Retain the ability to train employees and maintain a positive work environment
8. Focus management and administrative staff time on core service delivery and approved major projects – “first things first”
9. Communicate impacts and be transparent about reductions April 13, 2026 4
Understanding the Importance of
City Reserve / Fund Balance
What is Fund Balance?
➢ What is Fund Balance?
• Represents the difference between the City’s total 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:
• Nonspendable – 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.
April 13, 2026 6
What is Fund Balance? (cont.)
➢ 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 16.7%) of regular operating expenditures (excluding transfers). ➢ 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.
April 13, 2026 7
General Fund Reserve Policy - Current
➢The current reserve policy meets the following
objectives of the City:
• Ensure financial stability
• Maintain operations in times of economic uncertainty
➢The City’s current reserve policy sets the following
targeted reserve levels:
• Economic Uncertainty – 20% of budgeted General Fund
expenditures, excluding any transfers; and
• Major Emergency – Establish a goal of maintaining a
target balance of $5,000,000; and
• Undesignated Fund Balance – The Undesignated Fund
Balance remains in the General Fund until allocation by the City Council to another designated reserve or fund
April 13, 2026 8
General Fund Reserve Policy
Major Emergency Designation
What can the $5M be used for?
Major emergencies Recovery from an earthquake, firestorm, and other disasters
What is the Major Emergency designation in the Reserve Policy? Established goal of maintaining a target balance of $5M to response to major emergencies April 13, 2026 9
Best Practices & Comparable Policy Levels
Agency Reserve Fund Level
Dublin N/A
Oakland 7.5%
Berkeley 16.7%
Fremont* 16.7%
Pleasanton 16.7%-25.0%
Emeryville 20.0%
Hayward 20.0%
Piedmont 20.0%
San Leandro** 20.0% + $5M
Union City 20.0%
Alameda*** 20.0% + 5%
Albany 25.0%
Livermore 30.0%
Newark 30.0%
GFOA (Recommendation) 16.7%
Notes:
*City of Fremont – Policy also includes a Budget Uncertainty Reserve with no set reserve level **City of San Leandro – Policy also includes $5M for Major Emergencies ***City of Alameda – Policy also includes 5% for Economic Uncertainty April 13, 2026 10
Proposed
General Fund
Reductions
City Manager’s Office
Finance
Human Resources
Information Technology
Administrative &
General
Government
City Manager’s Office & Legislative
Baseline Budget FY 2027:
$7,997,060
Proposed Cumulative
Net Change:
$376,210 or 4%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
1 Eliminate City Support
for School Crossing
Guard Program
($90,000) ($90,000)
School Districts will assume funding for its
school crossing guard program • Unanimously Agree
2 Reduce Community
Sponsorships for
Events and Community
Investment Grants
($60,000) ($60,000)
Reduced sponsorships for events, and grant
opportunities for investment in the Community • Unanimously Agree 3 Reduce General
Operating Expenses ($84,160) ($84,160)
Minimal operational impact on reduced
expense for travel, training, memberships,
supplies, and consultant services
• Unanimously Agree
4 Reduce Election Costs ($232,050) ($232,050) No impact • Unanimously Agree Total ($376,210) ($90,000) ($0) ($376,210)
April 13, 2026 13
Finance
Baseline Budget FY 2027:
$5,134,613
Proposed Cumulative
Net Change:
$439,322 or 9%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
5 Business License
Administration ($255,000) ($255,000)
This will allow for the transition to the new ERP
system and evaluation of existing City
resources to bring business license
administration in-house
• Unanimously Agree
6 Reduce Contract
Services ($163,000) ($163,000)
Alignment for new investment management
services, and reduction in contract accounting
services
• Unanimously Agree
7 Reduce General
Operating Expenses ($21,322) ($21,322) Reduce expense for travel and training, memberships, supplies • Unanimously Agree Total ($184,322) ($255,000) ($0) ($439,322)
April 13, 2026 14
Human Resources
Baseline Budget FY 2027:
$2,904,209
Proposed Cumulative
Net Change:
$156,447 or 5%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulativ
e
Reduction
Impact Finance Committee
8 Eliminate Part-Time
Administrative Assistant
II
($29,447) ($29,447)
Through attrition, eliminate part-time
Administrative Assistant II. Tasks will be
absorbed by existing staff.
• Unanimously Agree
9 Reimagine Employee
Recognition Events ($24,250) ($12,000) ($10,000) ($46,250) Reimagine employee recognition and
appreciation initiatives, such as service and
retirement awards. Eliminate employee events,
such as recognition breakfast and appreciation
picnic. Impacts morale.
• Unanimously Agree
10 Reduce Contract
Services ($20,000) ($5,000) ($40,000) ($65,000) Reduce funds for external investigations or other employee relations services • Unanimously Agree 11 Reduce General
Operating Expenses ($15,750) ($15,750)
Reduce expenses for training, memberships,
supplies, wellness services, and City-wide
employee development/tuition reimbursement
• Unanimously Agree
Total ($60,000) ($46,447) ($50,000) ($156,447)
April 13, 2026 15
Information Technology
Baseline Budget FY 2027:
$9,830,715
Proposed Cumulative
Net Change:
$739,970 or 8%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
12 Eliminate Vacant Business
Systems Analyst ($221,489) ($221,489)
Reduction of 25-30% in business application support
capacity across the organization. Affected applications include Accela, SeeClickFix and GIS
• Unanimously Agree
13 Reduce Consulting Services
& Eliminate Year-Up Interns ($212,430) ($212,430)
IT estimates that response times for technology
incidents and service requests reduced up to 20%.
Reduced project management support
• Unanimously Agree
14 Eliminate Public Wi-Fi
Access ($108,131) ($108,131) Eliminate public Wi-Fi in downtown and parks • Majority Agree 15 Reduce General Operating
Expenses ($124,968) ($124,968) Minimal impact • Unanimously Agree 16 Reduce Central Services
Printing/Paper for
Efficiencies
($35,084) ($35,084) Minimal impact • Unanimously Agree
17 Reduce redundant internet
providers ($45,000) ($45,000) Minimal potential impact. Redundant internet providers reduced from 3 to 2 • Unanimously Agree
18 Eliminate Eden
Maintenance & Support ($88,757) ($88,757) No impact. Eliminate maintenance and support with current ERP solution through transition to Workday • Unanimously Agree
19 Citywide Software & New
Cyber Security Tools $95,889 $95,889 These increases are needed to continue cybersecurity roadmap improvements • Unanimously Agree Total ($543,082) ($196,888) ($0) ($739,970)
April 13, 2026 16
Library
Recreation & Parks
Human Services
Culture
&
Services
Library
Baseline Budget FY 2027:
$9,768,577
Proposed Cumulative
Net Change:
$863,404 or 9%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
20 Reallocation of Weekly Library
Hours ($649,357) ($649,357)
Eliminate vacant staffing; Main and Manor
newly closed on Mondays, resulting in 7 less
hours per week each; Mulford increase from 12
to 28 hours/week. Change will result in 2
additional hours per week in the library system.
• Unanimously Agree
21 Eliminate Library Public Arts
Fund ($50,000) ($50,000)
Alterative funding needed to continue Citysponsored Comedy Festival beyond 2027; eliminate Arts Grants Program.
• Unanimously Agree
22 Reduce Digital & Physical
Collection Allocation ($81,711) ($81,711)
Inability to acquire requested materials; need
to prioritize popular materials; LINK+ utilized
more often, which will require more staff
intervention and longer public wait times;
longer holds lists due to discontinuation of
lease program.
• Unanimously Agree
23 Reimagine Library Program
Offerings ($11,822) ($11,822) Continue to offer programming. Reimagination of program delivery through efficiencies • Unanimously Agree 24 Reduce General Operating
Expenses ($70,514) ($70,514)
Eliminate training, social media boosts, and
public magazine subscriptions. Reduce travel,
translations, memberships, and supplies.
• Unanimously Agree
Total ($863,404) ($863,404)
April 13, 2026 18
Recreation & Parks Baseline Budget FY 2027:
$11,772,008
Proposed Cumulative
Net Change:
$1,200,385 or 10%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
25 Increase in
Programmatic/Rental (Revenue) ($566,000) ($140,500) ($10,000) ($716,500) Increase in programmatic offerings, more rental
space available, updated revenue projections based
on actuals. Reducing reliance on General Fund
• Unanimously Agree
26 Increase Independent
Contractor Expenses $134,000 $134,000 More programmatic offerings, offset by increased revenue • Unanimously Agree
27 Increase Boys & Girls Lease
Payments $98,232 $98,232
New lease terms. Increase in expense is partially
offset by more programmatic offerings resulting in
increased revenue
• Unanimously Agree
28 Reduce Contract Services ($40,000) ($35,000) ($14,000) ($89,000) Security service reduced to large events/rentals,
and eliminate coverage at pools; reduce contract
landscape services at City Facilities to 1x per week
or less starting in FY29
• Unanimously Agree
29 Personnel Cost Shift Away from
General Fund ($203,401) ($203,401) Accounting Update: align costs with work performed at Shoreline • Unanimously Agree 30 Eliminate Two Maintenance
Worker I ($352,668) ($352,668) Eliminate two Maintenance Worker I. Elimination may result in less proactive maintenance efforts • Unanimously Agree 31 Reduce General Operating
Expenses ($25,048) ($25,048)
Reduce expense for travel and training,
memberships, supplies, uniforms, translations, and
marketing
• Unanimously Agree
32 Reimagine program delivery
through efficiencies ($46,000) ($46,000)
Reimagination of program delivery through
efficiencies related to field trip transportation,
entertainment, and other supplies
• Unanimously Agree
Total ($648,217) ($175,500) (376,668) ($1,200,385)
April 13, 2026 19
Human Services Baseline Budget FY 2027:
$3,820,981
Proposed Cumulative
Net Change:
$550,009 or 14%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
33 Department Restructuring for
Efficiencies ($541,685) ($541,685) Restructure of department to facilitate operating efficiencies • Unanimously Agree 34 Eliminate Funding for Congregate
Winter Shelter ($50,000) ($50,000)
Program was discontinued in FY26 due to a lack
of a qualified provider. Staff recommends
eliminating funding for this program
permanently
• Unanimously Agree
35 Reduce Community Agency
Program Grant Funding ($20,000) ($20,000) FY26 funding is $170,000. Change will result in funding of $150,000 starting in FY28 • Unanimously Agree 36 Reduce Security Services at
Senior Community Center ($33,792) ($20,000) ($53,792)
FY26 funding is $67,584. Change will result in
gradual reduction of on-site security presence at
the Senior Community Center
• Unanimously Agree
37 Eliminate Domestic Violence Case
Management Funding ($50,000) ($50,000)
Ongoing case management services following
domestic violence crisis intervention may be
reduced or eliminated for San Leandro residents
• Unanimously Agree
38 Eliminate Shelter Subsidy to
Building Futures ($50,000) ($50,000) Potential funding gap for Building Futures to provide shelter for unhoused individuals • Unanimously Agree 39 Reduce General Operating
Expenses ($22,980) ($22,980) Reduce expense for travel, training, supplies, subscriptions, postage • Unanimously Agree 40 Increase in Independent
Contractor Expenses $75,000 $75,000 Continuation of senior program offerings through independent contractors • Unanimously Agree
41 Restoration of Part-time
Personnel $163,448 $163,448 Restoration of funding for 3 current part-time employees at the Senior Center • Unanimously Agree Total ($387,029) ($90,000) ($72,980) ($550,009)
April 13, 2026 20
Public Works
Community Development
Public
Infrastructure
Public Works
Baseline Budget FY 2027:
$10,027,130
Proposed Cumulative
Net Change:
$823,250 or 8%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
42 Reduce Third-Party
Encampment Cleanup ($219,800) ($94,022) ($82,728) ($219,800) In FY 2025, 20 encampment cleanups were
performed (16 performed by vendor, and 4
performed by City). To date in FY 2026 - 19
encampment cleanups have been
performed (15 performed by vendor
assistance, and 4 performed by City).
Overall reduction may result in slower
response to encampment cleanup.
• Unanimously Agree
• Recommend no reduction in FY 2028 and
FY 2029
43 Personnel Cost Shift
Away from General
Fund
($100,200) ($184,000) ($96,000) ($380,200)
Accounting Update: align costs with work
performed on road maintenance and repair
each fiscal year.
• Unanimously Agree
44 Consultant Cost Shift
Away from General
Fund
($180,000) ($180,000)
No impact to service delivery. Consultant
services will be charged to permit applicant
and/or construction project.
• Unanimously Agree
45 Reduce General
Operating Expenses ($21,978) ($21,272) ($43,250) Reduced expense for travel, training, memberships, supplies, subscriptions, etc. • Unanimously Agree Total ($500,000) ($205,978) ($117,272) ($823,250)
April 13, 2026 22
Community Development (1 of 3)
Baseline Budget FY 2027:
$11,052,628
Proposed Cumulative
Net Change:
$1,564,630 or 14%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
46 Eliminate Vacant Permit
Center Position ($181,832) ($181,832)
Internal recruitment of a vacant Permit Center
Supervisor role with no backfill. No direct impact to
residents or service delivery.
• Unanimously Agree
47 Eliminate On-Call
Planning Consultant ($75,000) ($75,000)
Limits the City's ability to engage subject matter experts for complex policy projects, respond to changes in state law, and fulfill Housing Element commitments.
• Unanimously Agree
48 Reduce Third-Party Plan
Checking Services for
Building Permits
($25,000) ($25,000) ($50,000) Permit review times may be increased by approximately 10%
• Unanimously Agree
49 Reduce General
Operating Expenses ($54,822) ($3,500) ($33,005) ($91,327) Reduce expense for travel, training, memberships, supplies, subscriptions, postage • Unanimously Agree
50 Reallocation of Rent
Registry Program ($648,000) ($648,000) No impact to community or operations. Funding will be approved with creation of new Special Revenue Fund. • Unanimously Agree April 13, 2026 23
Community Development (2 of 3)
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
51 Reduce Housing
Consultants
($40,000)
($30,000)
($40,000)
($30,000)
Core third-party Tenant / Landlord Services and
Housing Assistance Services retained at reduced
level;
Discontinue Multi-Family Rental Assistance
Program Needs Analysis and Seminars / Outreach
to Enhance Housing Mobility (Housing Element)
• Unanimously Agree
• Recommend a $30,000 Reduction in FY
2027
• Retain funding of $10,000 for Core
Third-Party Tenant/Landlord Services
52 Reduce First Time
Home Buyer Program ($25,000) ($25,000) ($50,000)
Reduced capacity to manage & monitor the City's
Below Market Rate (BMR) Program;
Proposed FY 29 reductions will result in loss of
third-party contract - Significant increase in
City staff time to manually administer the BMR
Program;
Reductions & delays in application processing,
compliance reviews & annual reporting
• Unanimously Agree
53 Reduce Downtown
Ambassador Program
Funding
($51,021) ($20,000) ($71,021)
Maintaining base funding level with no escalation
factors in FY 2027 will result in reduction in service
hours for Downtown Safety Ambassadors.
Increased calls for PD service; Reduced outreach
and de-escalation services downtown; Businesses
may see increased impacts from unhoused
individuals and the downtown environment may
feel less safe and welcoming.
• No Recommendation Either Way (For or
Against)
April 13, 2026 24
Community Development (3 of 3)
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
54 Reduce Event Sponsorship ($32,000) ($1,000) ($33,000) Elimination of monetary sponsorship for SLIA Downtown
Events for enhanced music and programming. Increased inkind assistance from the City - partnerships and equipment, including new city-owned stage.
Reduction of Downtown Farmers Market Support;
• Unanimously Agree
55 Reduce Chamber of
Commerce Support ($12,450) ($12,450) Reduction in joint City-Chamber of Commerce activities • Unanimously Agree 56 Reduce Branding &
Marketing Funds ($70,000) ($85,000) ($10,000) ($165,000) Reduction of City Brand Assessment & Marketing Study
& Brand Implementation;
Reduced funds to develop new Economic Development
marketing
Elimination of San Francisco Business Times advertising / spotlight on San Leandro;
Reduced recruitment of new businesses
• Unanimously Agree
57 Eliminate Business
Incentive Program ($157,000) ($157,000)
Reduced ability to recruit and assist unique small
businesses;
Eliminates assistances to shopping centers for upgrades • Unanimously Agree
58 Eliminate Economic
Development Studies ($50,000) ($50,000) ($100,000)
Discontinue Arts District Evaluation & Placemaking/Plaza Planning;
Eliminate budget for new Economic Development studies
• Majority Recommend No
Reductions
Total ($1,198,654) ($164,521) ($201,455) ($1,564,630)
April 13, 2026 25
Fire
Police
Public
Safety
Fire
Baseline Budget FY 2027:
$36,901,973
Proposed Cumulative
Net Change:
$973,137 or 3%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
59 Eliminate City’s Retiree
Medical Contribution ($681,298) ($19,076) ($19,610) ($719,984) 90% Reduction in City’s contribution to retiree medical payment to ACFD. • No direction provided; additional staff
work required
60 Reduce Alternative
Response Unit (ARU)
Program
($253,153) ($253,153)
Reduce respite beds from 3.83 to 2.
Cost Per Bed = $138,335
Reduction = 1.83 Beds * $138,335 = $253,153
• Unanimously agree
Total ($681,298) ($19,076) ($272,763) ($973,137)
April 13, 2026 27
Police
Baseline Budget FY 2027:
$51,729,464
Proposed Cumulative
Net Change:
$810,161 or 2%
# Description FY 2027
Reduction
FY 2028
Reduction
FY 2029
Reduction
Cumulative
Reduction Impact Finance Committee
61 Revise Personnel Budget
for New Recruits and
Vacancy Rates
($554,332) ($554,332) Administrative alignment of personnel costs with retirements, new recruits, and vacancy rates • Unanimously Agree 62 Eliminate Vacant
Management Analyst II
(Crime Analyst)
($161,629) ($161,629) Limits transparency and delays in data and intelligence collection • Unanimously Agree
63 Reduce Consulting
Services ($57,500) ($57,500) Potential delay in public messaging, delays in hiring of police officers, and recruitment website impact • Unanimously Agree 64 Eliminate Fleet
Management Contract
Services
($145,500) ($145,500) Utilize in-house services for efficiencies • Unanimously Agree 65 Reduce General
Operating Expenses ($72,200) ($72,200)
Reduce expense for POST training, wellness
application, laundry, outreach materials, general
supplies,
• Unanimously Agree
66 Increase for Full Cost of
Animal Control Contact
Services
$181,000 $181,000 Animal control services is a legally mandated core service, in which the City must provide this service. • Unanimously Agree Total ($664,661) ($145,500) ($810,161)
April 13, 2026 28
MAYOR & COUNCILMEMBERS COMPENSATION
COUNCIL HANDBOOK
• State law limits City Council salaries. All provisions of the Government Code of the State of California relating to compensation, benefits, and reimbursement for expenses applicable to members of a City Council of a general law city shall apply to Councilmembers in San Leandro. (Section 255, City Charter; Gov. Code § 36516)
• Councilmember compensation is subject to review and re-evaluation in even years, to coincide with new Councilmembers being seated.
April 13, 2026 29
Old Monthly
Compensation
Current Monthly
Compensation
% Change
Councilmembers $1,323 $1,900 43.6%
Mayor $2,646 $3,800 43.6%
MAYOR & COUNCILMEMBERS COMPENSATION
PRIOR COMPENSATION ADJUSTMENT
• The following adjustments became effective January 1, 2025:
April 13, 2026 30
MAYOR & COUNCILMEMBERS COMPENSATION
POSSIBLE COMPENSATION ADJUSTMENT
• Government Code § 36516 allows for adjustment for each calendar year of:
⚬ 5% for each calendar year since last adjustment
⚬ Equivalent to CA CPI (but not to exceed 10%) for each year since last adjustment • Adjustment would be effective January 1, 2027
• Finance Committee: Not Unanimous
April 13, 2026 31
Summary of Proposed Staffing Changes in FY 2027
Department FY 2027
Adopted FTE
FY 2027
Proposed FTE Change
City Manager’s Office 17.4
Finance 17.0
Human Resources 11.3
Information Technology 15.0 (1.0)
Library 36.9 (4.1)
Recreation & Parks 50.2
Human Services 10.9 (2.0)
Public Works 72.4
Community Development 34.5 (1.0)
Fire 40.4
Police 138.4 (1.0)
City Council 7.0
TOTAL 455.1 (9.1)
April 13, 2026 32
Interfund Transfer
➢What is an Interfund Transfer?
• An interfund transfer occurs money is sent from one fund to another fund within the same government
➢Why are Interfund Transfers Used?
• To Fund Large Projects
• Subsidization of Budgets
• Comply with legal or policy requirements
➢Ongoing vs. One-Time Interfund Transfers
• Ongoing: Occurs regularly (i.e. annual support for a program) • One-time: Often to address shortfall or fund a capital project ➢Interfund transfers in San Leandro
• Transfers to Capital Infrastructure to Subsidize Funding Needs • Transfer to Pension Trust
33 April 13, 2026
General Fund Transfers
A B C D E F
1 General Fund Transfers FY 2025
Actuals
FY 2026
Budget
FY 2027
Budget
FY 2028
Budget
FY 2029
Budget
2 Capital Funds
3 ADA Transition Plan $150,000 $150,000 $150,000 $154,500 $159,135 4 Capital Projects Fund $15,700
5 City Building Major Maintenance $3,185,750 $600,000 $600,000 $618,000 $636,540 6 City Park Major Maintenance $475,000 $475,000 $475,000 $489,250 $503,928 7 Fleet Fund $1,500,000 $1,500,000 $1,500,000
8 Street Rehabilitation $3,874,781 $3,600,000 $3,600,000 $3,708,000 $3,819,240 9 IT Fund - Capital $73,699
10 Capital Funds Total $7,774,930 $6,325,000 $4,825,000 $6,469,750 $6,618,843 11 Operating Funds
12 Fleet Fund $4,943
13 Insurance Fund $3,819
14 Links Shuttle Service $50,000 $50,000 $50,000 $51,500 $53,045 15 Parking Fund Subsidy $376,718
16 Pension Trust $457,968
17 Stormwater Fund $225,000
18 Street Maintenance $635,826
19 Operating Funds Total $1,529,274 $275,000 $50,000 $51,500 $53,045 20 Total General Fund Transfers $9,304,204 $6,600,000 $4,875,000 $6,521,250 $6,671,888 April 13, 2026 34
General Fund Transfer
Recommended Reduction (FY 2027)
A B C D
1 General Fund Transfers FY 2027
Budget
FY 2027
Reduction
FY 2027
Proposed
2 Capital Funds
3 ADA Transition Plan $150,000 $150,000
4 City Building Major Maintenance $600,000 ($300,000) $300,000 5 City Park Major Maintenance $475,000 ($200,000) $275,000 6 Street Rehabilitation $3,600,000 ($500,000) $3,100,000 7 Capital Funds Total $4,825,000 ($1,000,000) $3,825,000 8 Operating Funds
9 Links Shuttle Service $50,000 $50,000
10 Operating Funds Total $50,000 $50,000
11 Total General Fund Transfers $4,875,000 ($1,000,000) $3,875,000 • Finance Committee made no recommendation on reductions of General Fund transfers April 13, 2026 35
General Fund Transfer
Recommended Reduction (FY 2028)
A B C D
1 General Fund Transfers FY 2028
New Baseline
FY 2028
Reduction
FY 2028
Proposed
2 Capital Funds
3 ADA Transition Plan $154,500 $154,500
4 City Building Major Maintenance $318,000 ($150,000) $168,000 5 City Park Major Maintenance $289,250 ($100,000) $189,250 6 Fleet Fund $1,500,000 $1,500,000
7 Street Rehabilitation $3,208,000 ($750,000) $2,458,000 8 Capital Funds Total $5,469,750 ($1,000,000) $4,469,750 9 Operating Funds
10 Links Shuttle Service $51,500 $51,500
11 Operating Funds Total $51,500 $51,500
12 Total General Fund Transfers $5,521,250 ($1,000,000) $4,521,250 • Finance Committee made no recommendation on reductions of General Fund transfers April 13, 2026 36
General Fund Transfer
Recommended Reduction (FY 2029)
A B C D
1 General Fund Transfers FY 2029
New Baseline
FY 2029
Reduction
FY 2029
Proposed
2 Capital Funds
3 ADA Transition Plan $159,135 $159,135
4 City Building Major Maintenance $186,540 ($86,540) $100,000 5 City Park Major Maintenance $203,928 ($103,928) $100,000 6 Fleet Fund $1,500,000 $1,500,000
7 Street Rehabilitation $2,569,240 ($809,532) $1,759,708 8 Capital Funds Total $4,618,843 ($1,000,000) $3,618,843 9 Operating Funds
10 Links Shuttle Service $53,045 $53,045
11 Operating Funds Total $53,045 $53,045
12 Total General Fund Transfers $4,671,888 ($1,000,000) $3,671,888 • Finance Committee made no recommendation on reductions of General Fund transfers April 13, 2026 37
Establishing Sustainable Fleet Fund
➢ Ongoing Fleet Replacement Needs
• City Fleet
• Police Fleet
• Fire Fleet
➢ Ongoing operational needs to provide core services
• Procurement Challenges
• Public safety fleet
• Fire Fleet - Estimated date of delivery is approximately 4-5 years from date of order ➢ Establishing a Sustainable Fund Balance for Future Purchases • Engaged a consultant to assist with finalizing an in-depth review of the City’s fleet fund, including the development of a robust fleet fund policy and comprehensive 10-year forecasting tool to better understand ongoing funding needs, and Geneal Fund impacts • Vital for the continuation of providing core services, and avoid critical failure • Return to Finance Committee with an update on Fleet Policy, Forecasting Tool, and Funding Plan in May/June
April 13, 2026 38
American Rescue
Plan Act
American Rescue Plan Act (ARPA)
➢What is ARPA?
› Signed into law on March 11, 2021, to provide a $1.9 trillion economic stimulus package to address impacts due to the COVID-19 crisis › $65 billion in direct federal relief to cities to address economic and fiscal impacts
› ARPA dollars intended to assist Cities and communities recover from the impacts of the COVID-19 crisis
➢How did it impact San Leandro?
› San Leandro received $18.6 million in local relief
› All ARPA dollars were obligated by December 2024, and currently on target to be fully expended by December 2026
40 April 13, 2026
Summary of ARPA Appropriations
41 Project Category Initial ARPA Appropriation
Public Health $4,556,532
Negative Economic Impacts $2,847,528
Public Health – Negative Impact $303,398
Revenue Replacement $9,238,562
Emergency Relief $93,464
Surface Transportation $1,600,000
Total $18,639,484
April 13, 2026
ARPA Projects/Programs – Ongoing General Fund Costs
A B C D E F
Program/Project
Initial ARPA
Appropriation
Ongoing
Baseline
Costs
FY 2027 FY 2028 FY 2029
1 Alternative Response Unit $1,189,598 $877,530 $877,530 $877,530 $624,377 2 Housing Counseling/Fair Housing Support $40,000 $79,304 $70,000 $70,000 $70,000 3 Downtown Safety Ambassadors $70,000 $351,021 $351,021 $300,000 $280,000 4 Add 1 Project Mgr. Position (Human Services) $232,480 $277,193 $277,193 $277,193 $277,193 5 Citywide Beautification and Community
Preservation $1,381,897 $430,000 $210,200 $116,178 $33,450 6 Expanded Homeless Outreach Team Services $382,224 $123,450 $123,450 $123,450 $123,450 7 Long-term Navigation Center* $750,000 $1,780,000 $1,784,086 $1,943,090 $1,950,250 8 TOTAL $4,046,199 $3,918,498 $3,693,480 $3,707,441 $3,358,720 42 *Three-year funding obligation
April 13, 2026
Critical Failure Funding
Needs
Proactive Investment to Avoid Critical Failure
City Hall
Painting
$500k
Marina
Community
Center
Painting
$500k
Fire Station
#10 Roof
Replacement
$625k
CAD-RMS
Replacement
$3M
April 13, 2026 44
Finance Committee Recommendation
for Funding Critical Needs
1. City Hall Painting
‒ Unanimously Agree
2. Marina Community Center Painting
‒ Unanimously Agree
3. Fire Station #10 Roof Replacement
‒ Unanimously Agree
4. CAD-RMS Replacement
‒ Unanimously Agree
‒ Use Major Emergency Reserve Fund
45 April 13, 2026
April 13, 2026 46
During FY 2026 & FY 2027 Biennial Budget Process – Budget Directive
1. FYs 2026 & 2027 – Expenses (less transfers)
should be equal to projected revenue
2. Beginning in FY 2028 – All expenses should be
equal to projected revenue
Long-term fiscal stability
Avoid reoccurring structural deficits
What is the Budget Objective for FY 2027 and Beyond?
General Fund 10-Year Forecast
(Update as of April 2026 )
*Reflects mid-year adjustments and encumbrance carryovers of previously authorized budget appropriations (FY 2025). ($ in millions)
$7.9M - $3M + 0.7M
April 13, 2026 47
General Fund 10-Year Forecast WITHOUT Reductions
(Updated as of March 2026)
($ in millions)
*Reflects mid-year adjustments and encumbrance carryovers of previously authorized budget appropriations (FY 2025).
April 13, 2026 48
Recommendation to
For Adoption
Provide Feedback & Input on
Proposed Budget Reductions
Discussion &
Feedback
April 13, 2026 50
Staff Is Seeking Council Direction…
Does Council Support Proposed Expenditure Reductions?
Does Council Support Proposed General Fund Transfer Reductions? Does Council Support the Funding Plan to Avoid Critical Failure? Does Council Recommend Moving FY 2027 Mid-Cycle Update for Adoption? Exhibit to Presentation
Proposed Reductions by
Program Area
Homelessness & Housing
Homelessness Response
Description (Dept)
Cumulative
Ongoing
Reduction
Percent
Reduction of
FY 2027 Baseline
Impact
Decrease Alternative Response Unit
(ARU) Staffing and Beds
(ACFD)
($253,153) 28%
• Reduce respite beds from 3.83 to 2.
• Cost Per Bed = $138,335
• Reduction = 1.83 Beds * $138,335 = $253,153
Eliminate Shelter Subsidy for Building
Futures
(HS)
($50,000) 100% • Unhoused individuals will not have access to emergency winter shelter • FY27 Remaining Funding for Building Futures Shelters $192,822 Eliminate
Third-Party Encampment Cleanup
(PW)
($396,550)
($219,800)
90%
50%
• In FY 2025, 20 encampment cleanups were performed (16 performed by vendor, and 4 performed by City).
• To date in FY 2026 - 19 encampment cleanups have been performed (15 performed by vendor assistance, and 4 performed by City). • Overall reduction may result in slower response to encampment cleanup.
Eliminate Winter Shelter Funding
(HS) ($50,000) 100% • No City-sponsored emergency winter shelter for unhoused individuals • Program was not offered in FY 2026
Total Reduction ($572,953)
Proposed Reductions:
$572,953
April 13, 2026 52
Homelessness & Housing
Housing Program
Description (Dept)
Cumulative
Ongoing
Reduction
Percent
Reduction of
FY 2027
Baseline
Impact
Reallocate Rent Registry
Program to New Special
Revenue Fund
(CD)
($648,000) N/A • General Fund Loan necessary to cover startup program costs • Eliminate FY 2027 General Fund allocation
Reduce Housing Division
Consulting Budget
(CD)
($40,000)
($30,000)
31%
23%
• Reduced budget for third-party Tenant/Landlord Services and Housing Assistance Services
• Discontinue Multi-Family Rental Assistance Program Needs Analysis and Seminars/Outreach to Enhance Housing Mobility (Housing Element) Reduce First Time Home Buyer
Program
(CD)
($50,000) 61%
• Reduced capacity to manage & monitor the Below Market Rate (BMR) Program • Likely loss of third-party contract due to FY29 reductions • Significant increase in City staff time to manually administer the BMR Program • Reductions & delays in application processing, compliance reviews & annual reporting Total Reduction ($728,000)
Proposed Reductions:
$728,000
April 13, 2026 53
Homelessness & Housing Services
FY 2027 Funding FY 2028 Funding FY 2029 Funding
Lewelling Interim Housing & Drop-in Center $1,927,714 $1,943,090 $1,950,249 Homelessness Prevention Rental Assistance $1,368,952 $0 $0 Alternative Response Unit $877,530 $877,530 $624,377
San Leandro Shelter/Sister Me Home $192,822 *$200,446 *$201,724 Homelessness Mobile Outreach $123,450 $123,450 $123,450 Tenant Landlord Services $70,000 $70,000 $70,000
Housing Assistance Services $11,000 $11,000 $11,000
Downtown Safety Ambassadors $351,021 $300,000 $28,000
Prohousing Incentive Program – Affordable housing support $666,667 $333,333 $0 Total $5,589,156 $3,658,403 $2,807,076
*Estimated
All Funding (General and Grant) for Homelessness and Housing Services FY 2027 – FY 2029
April 13, 2026 54
Description (Dept)
Cumulative
Ongoing
Reduction
Percent
Reduction of
FY 2027 Baseline
Impact
Eliminate Business
Incentive Program (CD) ($157,000) 100% • No ability to financially assist restaurants, shopping centers and small businesses (childcare, retail) in making strategic & impactful upgrades Eliminate Economic
Development Studies
(CD)
($100,000) 100%
• No Arts District Evaluation & Placemaking/Plaza Planning • Loss of near-term opportunities to enhance cultural identity & vibrancy through placemaking & arts-related improvements
• Eliminated budget for Economic Development studies going forward Reduce Event Sponsorship
(CD/CMO) ($43,000) 71%
• Elimination of monetary sponsorship for SLIA Downtown Events for enhanced music and programming. Increased in-kind assistance from the City - partnerships and equipment, including new city-owned stage.
• Reduction of Downtown Farmers Market Support
• Reduction in City Manager’s Office table sponsorships at galas & events Reduce Chamber of
Commerce Support (CD) ($12,450) 20% • Reduction in Chamber of Commerce activities – likely elimination of Small Business Week or Restaurant Week
Reduce Branding &
Marketing Funds (CD) ($165,000) 92%
• Reduction of City Brand Assessment & Marketing Study & Brand Implementation • Reduced funds to develop new Economic Development marketing • Elimination of San Francisco Business Times advertising/stories • Reduced recruitment of new businesses
Total Reduction ($377,450)
Economic Development
Economic Development Programs
Proposed Reductions:
$377,450
April 13, 2026 55
Description (Dept)
Cumulative
Ongoing
Reduction
Percent
Reduction of
FY 2027 Baseline
Impact
Change Weekly Library
Hours
(LIB)
($649,357) 11%
• Elimination of vacant staffing
• Main and Manor newly closed on Mondays, resulting in 7 less hours per week each. • Mulford increase from 12 to 28 hours/week
• Resulting in 2 additional hours of operation in the library system Reduce Digital & Physical
Collection Allocation (LIB) ($81,711) 24%
• Inability to acquire requested materials; need to prioritize popular materials • Use LINK+ more often, requires more staff intervention and longer public wait times • Longer holds lists due to discontinuation of lease program • Specialized popular collections like Lucky Day, Library of Things, and World Languages will be reduced or unable to expand or replace items
Eliminate Library Public
Arts Fund (LIB) ($50,000) 100% • Alterative funding needed to continue City-sponsored Comedy Festival beyond 2027 • Eliminate Arts Grants Program.
Reduced Community
Investment Grants
(CMO)
($60,000) 60% • Reduce table sponsorships at events
• Reduce community investment grants
Reduced Contract Services
for City Facility
Maintenance
(REC)
($14,000) 9%
• Contract Services to City Facilities will reduce to 1x per week or less, including o Plant trimming
o Litter and leaf removal
o Irrigation repairs
• Negative impact on public perception of City facilities • Higher long-term costs for plant replacement and repairs Total Reduction ($855,068)
Quality of Life Proposed Reductions:
$855,068
April 13, 2026 56
Public Safety Proposed Reductions:
$161,021
Description (Dept)
Cumulative
Ongoing
Reduction
Percent
Reduction of
FY 2027 Baseline
Impact
Eliminate Crossing Guard
Subsidy
(CMO)
($90,000) 100% • School District will assuming funding of its crossing guard program Reduce Downtown Safety
Ambassador Program
(CD)
($71,021) 20%
• Reduction will result in decreased service hours, including the likely elimination of the morning shift and reduced days of service
• Increased calls for PD service
• Reduced outreach and de-escalation services downtown
• Businesses may see increased impacts from unhoused individuals, and the downtown environment may feel less safe and welcoming
Total Reduction ($161,021)
April 13, 2026 57