8G Consent Calendar 2018 0618 - Laserfiche WebLink

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While the City has implemented considerable expenditure/service reductions to balance its budget, it continues to face increased operating costs. For example, the City’s contribution rates for employee pensions continue to rise due to prior portfolio losses and a change in actuarial assumptions by CalPERS, with additional increases projected in future years. The City has offset some of these increases with staff reductions in recent years, and will be working with employee groups over the next couple of years to address this growing cost. Partially mitigating the double digit increases in annual CalPERS funding are extra contributions to the pension from employees, which are up to 10% of salary. The State of California is forecasting a balanced budget over the next 18 months. The State’s savings and borrowings from special funds, property tax shifts, restructuring of the state-local government relationship that shifts funding responsibility to local government for certain services results in a shift of cost being transferred to cities and counties. State lawmakers’ dissolution of redevelopment agencies eliminates funding for redeveloping, improving and revitalizing project and blighted areas in the city. Passage of Prop 55 in November 2016 generates additional tax revenue for the State to mitigate recent deficits. Passage of Proposition 2 in November 2014 allocates General Fund surpluses to a rainy day fund to preserve State services during future economic downturns. Local governments remain alert about how the State will balance its budget and how it might impact local government. Long-term perspective The City adopts an annual budget, but employs long-term planning as the framework for its fiscal decisions. While San Leandro’s underlying economy is viewed as positive in the long-term, today’s economic challenges, notably in the General Fund, must be dealt with now to ensure long-term fiscal stability. The City Council has implemented various cost cutting measures after staffing peaked in 2008-09 to produce recurring budget savings to address unfunded liabilities. Passage of Measure Z in November 2010, Measure HH in 2014 and Measures OO, PP and NN in 2016 have improved revenues enough to restore selective services, such as the community care initiative and emergency preparedness. City Council unrestricted reserves total $33.8 million in the General Fund at June 30, 2017. The restricted reserve balance is $17.2 million. MAJOR INITIATIVES AND ACCOMPLISHMENTS In its role of providing policy direction and general oversight, the City Council establishes major goals for City service delivery. These goals are identified and quantified in the City’s annual budget. The City can boast of an impressive list of major initiatives and accomplishments during 2016-17 that helped achieve the City’s mission of serving the public and enhancing the quality of life in San Leandro. Some of these major initiatives and accomplishments include: 468