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File Number: 25-288 Recreation and Parks, Library, Human Services, and Community Development Departments. The City remains focused on providing core services to the community despite the ongoing budget challenges. While more work is needed to achieve long-term fiscal sustainability, through the leadership of the City Council and the support of City staff, the City will take meaningful and thoughtful steps toward presenting future balanced budgets while preserving essential services to the San Leandro community. While difficult conversations and policy decisions are expected as the City continues the hard work to develop a sustainable and balanced budget, the City Council and City staff remain dedicated to providing excellent public service to the community. Key Expenditures and Assumptions Salary Adjustments The budget includes funding salaries and benefits based on the terms of the current Memorandums of Understanding (MOUs) for all labor groups. Medical Insurance The budget and multi-year forecast include a 6% annual rate increase for medical and dental insurance costs. Retirement Plan Costs (CalPERS) The City contracts with CalPERS to administer its pension plans. Pension costs are made up of normal costs and unfunded accrued liability (UAL). Normal cost represents service credits earned by active employees in the current year and is calculated as a percentage of payroll. UAL is an amortized dollar amount to fund the difference between the estimated cost of pension benefits for current and future retirees when compared to current assets. Based on actuarial valuation reports provided by CalPERS, the normal cost rates for Miscellaneous and Safety plans are expected to be higher than the FY 2024-2025 rates. While benefits remain unchanged, employer contributions continue to increase due to the fluctuating performance of the investment portfolio. Pension costs are estimated at approximately $23.5 million paid for out of the General Fund. Fire Contract The FY 2025-2026 proposed budget for the fire services contract with the Alameda County Fire Department amounts to $33.6 million; this amount is expected to increase to $36.1 million in FY 2026-2027. The contract provides for both emergency and non-emergency fire services in the City. The FY 2025-2026 proposed budget reflects a one-time reduction of $1.4 million due to projected salary savings from vacant plan checker positions, a one-time reduction in retiree medical contributions for unfunded liability payments, as well as the reduction of medical equipment replacement in FY 2026-2027. This reduction in medical equipment replacement is not expected to affect the level or quality of emergency medical services provided by the Fire Department. Transfers Out Transfers out of $7.0 million in FY 2025-2026 and $4.9 million in FY 2026-2027 include General Fund contributions to Capital Improvement Program projects, the Fleet Fund, Stormwater Fund, Page 4 City of San Leandro Printed on 9/4/2025