Cassidy: Fix Pensions To Improve City's State

Mayor Stephen Cassidy said the city has a balanced budget now but must "stabilize" its pension costs to avoid deep deficits in the years ahead, especially when a temporary sales tax boost expires.

But not long after his remarks, the council voted 5-2 to authorize up to $443,000 in pension incentives, paid over a 20-year period, to induce four senior city employees to take early retirement.

Cassidy and City Councilwoman Pauline Cutter dissented.

The council also voted 6-1, with Cutter again dissenting, to amend the zoning code to exclude recreation and entertainment businesses from the industrial area.

the change is tied in part to the city's legal battle with the Faith Fellowship Worship Center.

State of City

Though balanced now, Cassidy said the city budget is headed for red ink. His remarks hewed closely to in February at which City Manager Chris Zapata predicted a $7 million deficit in 2018 when the Measure Z sales tax boost expires.

Monday night Cassidy cited employee pensions as a fast-growing cost that must be curbed by negotiating with city unions to require them to pay into their own retirement funds, which they do not presently do.

"San Leandro can no longer afford to pay 100 percent of the cost of employee retirement benefits," he said.

Cassidy said the city spent $4.7 million on retirement benfits in 2000. This fiscal year the city will spend $11 million and next year retirement outlays will rise to $12 million, he said.

Cassidy touched on other topics, including:

• the widespread attention given to the Lit San Leandro ;
• the growth of local companies like the privately-owned ;
• the projected opening of the new downtown garage by late summer adding 130 parking spaces;
• a CalTrans committment to resurface East 14th Street between Davis and Thornton Streets, starting this summer; and
• the return of the Downtown Farmer's Market on April 18th

The complete speech and slide presentation are posted on the mayor's web page.

Pension Sweetener For Early Retirements

Not long after Cassidy's speech, the council heard a staff presentation urging that pension-related early retirement incentives be offered to four senior employees who had been part of the now-disbanded redevelopment agency.

The council was told that the inducements could costs up to $443,000, stretched over a 20-year period, if all four eligible employees took the offer.

If the council offered no inducement and instead issued layoff notices, the four senior employees, earning about $100,000, could bump lower-paid staffers and so cost the city money to keep them on the payroll, staff said.

Councilwoman Pauline Cutter suggested that, as an alternative, the city make a one-time inducement offer that it could afford. Cassidy noted that adding long-term expenses to the city's pension obligations ran counter to his main goal. They voted in the minority as the measure got the other five council votes.

Zoning Change And Fellowship Case

The council also voted to change the city's zoning code to exclude recreation and entertainment businesses from the industrial area that runs along Interstate 880. The move is part of a legal scramble meant to bring the zoning code into compliance with court decisions, staffers told the council.

City critic Marga Lacabe noted that adult entertainment would still be allowed in the industrial area, but not church assemblies, recreational facitilities or regular entertainment forums.

"Naked dancing would be okay but not ballet," she said.

the council considered the issue, a city attorney said the changes would strengthen San Leandro's hand in its long-standing legal dispute with the Faith Fellowship -- where $4 million dollars in legal fees and settlement or damage costs could be at stake, according to a Wall Street Journal .

Fellowship pastor Gary Mortara attended the meeting but did not speak.

Cutter cast the sole vote against the changes, noting that the city's own planning commission had opposed the changes, as had the Chamber of Commerce.

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