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7 <br />created by our Human Services department, because it is an excellent example of working with <br />kindness with all of our residents. <br /> <br />The Homeless Compact is now a model for public /private partnership and again, this wouldn’t <br />have been possible without the cooperation of its many partners. <br /> <br />Fiscal Sustainability <br /> <br />Probably the most important step to building a long-term, sustainable future for San Leandro is <br />making sure that we have a budget that is balanced and secure. <br /> <br />Like most cities, we face challenges in the coming years. Our local economy has been strong, <br />and our revenues have continued to grow. And yet, our costs are growing even faster. <br /> <br />When your core business is service, then employee costs are most of your budget. <br />Unfortunately, some of these costs are escalating at an alarming rate. <br /> <br />This slide shows our annual costs by year for pensions. Like most other California cities, they <br />are administered by CalPERS. <br /> <br />Decades ago, CalPERS thought the system was--quote--“super-funded,” and that cities could <br />take a few years off from making contributions. Around that time, employees were also given a <br />more generous pension package because the system was thought to be doing so well. <br />Unfortunately, the dot-com crash came shortly after that, and things quickly changed, and so <br />we’ve had to adapt. <br /> <br />A core problem is that CalPERS made some assumptions on future returns that were too <br />optimistic, so cities are being asked to make up the difference. <br /> <br />The end result is that San Leandro’s pension costs are going up significantly each year, even <br />though our benefits have not gotten any more generous. In fact, employees hired after 2013 <br />actually receive a vastly reduced pension. <br /> <br />Another related challenge is that people are living longer. In 2001, there were two active <br />employees for every retiree. Today, there are only about 1.3. <br /> <br />In response, I continue to believe that we have an obligation to uphold our promises and provide <br />secure retirements for City employees. But we also need to live within our means. <br /> <br />This means partnering with employees to find solutions. All of our labor groups have agreed to <br />fully fund their share of pension costs, which is a significant share of their paychecks. <br /> <br />We also continue to set aside funds for our liabilities. Four years ago, the City Council <br />established a goal of putting aside $5 million over 5 years. I’m pleased to share that we have