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The economic outlook for the City and the East Bay was positive through the third quarter of fiscal year 2019-20. However, the COVID-19 pandemic and the stay-at-home orders have profoundly affected San Leandro businesses and residents. It is challenging to predict the depth and length of the negative consequences on the economy, and significant uncertainty remains about the timing and strength of an economic recovery. The recession resulting from the global financial and credit market meltdown in late 2008 had a direct and dramatic impact on the City’s local revenues. Since then the economy has rebound, and the U.S. was in its longest economic expansion when the COVID-19 pandemic hit. Due to low housing inventory, home prices continued to appreciate even during the pandemic. The City’s median home price was $694,000, a 7% increase from prior year. San Leandro’s unemployment rate was 17.7%. This high unemployment rate was attributed to the shutdown of economic activities in the last quarter of the fiscal year, though the rate improved after June 30, 2020. The City’s General Fund supports basic municipal services, such as public safety, human services, library and parks and recreation. Revenue to this critical fund, generated largely from sales and property taxes, has grown to higher levels due to voter-approved tax measures in 2014 and 2016. Instead of a usual growth, sales tax revenues decreased by 3% from the prior fiscal year due to the COVID-19 pandemic. With the passage of Measure HH effective April 1, 2015, the half-cent sales tax added $12.0 million sales tax revenue in fiscal year 2019-20. Property tax, a stable revenue source, increased by 9% partly due to the increase in assessed value. Impacted by the rapid shutdown of economic activities, real property transfer tax decreased by 29% from the prior fiscal year. Fortunately, real property transfer tax is not one of the City’s top revenue sources and thus the financial impact of this revenue source was limited. Affected by the COVID-19 pandemic, General Fund revenues experienced a slight decrease from the prior fiscal year. City operations are also supported by other funds, including major and non-major enterprise (proprietary) funds. Major enterprise funds include the Water Pollution Control Plant and Shoreline Enterprise Funds. Both funds experienced decline in revenues over the prior fiscal year due to the COVID-19 pandemic. The Water Pollution Control Plant Enterprise fund was established to account for the City’s sewers, which protect public health and preserve water quality through collection, treatment, and disposal of the community’s wastewater. Program revenues to this fund in 2019-20 totaled $13.7 million, a 4% decrease from the prior fiscal year. The Shoreline Enterprise Fund was established in 2002-03 by combining the Marina and the Golf Course Funds. Program revenues to this fund in 2019-20 totaled $1.7 million, a 13% decrease from the prior fiscal year. Like many other cities in California, the City faces increases in operating expenses partly due to rising pension costs. The City continues to implement strategies to control costs and identify viable revenue options. The City is also committed to funding its unfunded pension and other post- employment benefits (OPEB) liabilities. Authorized by the City Council, the City continues to set aside funds in the Prioritization Unfunded Liability Liquidation (PULL) Plan to reduce its unfunded liabilities. Long-term Perspective The City adopts a biennial budget employing long-term planning as the framework for 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 vii96