News and Blog – Cassidy for San Leandro

In 1941, President Franklin D. Roosevelt declared December 15th, then the one hundred and fifty years anniversary of the signing of the Bill of Rights, as Bill of Rights Day.  Less than a year later, Fred Korematsu was arrested in downtown San Leandro for being of Japanese ancestry and refusing to report to an internment camp.

Last night, December 15, 2009, the San Leandro School Board, in an unanimous decision, named the new 9th grade campus “San Leandro High School, Fred Korematsu Campus.”  By honoring Fred Korematsu, the school board will inspire students of today and tomorrow that they should cherish and, if necessary, fight for their rights under our Constitution and Bill of Rights.

Thank you School Board Trustees and everyone that wrote the board or spoke in support of naming the new school after Korematsu, including last night San Leandro Lions Leroy Smith and Ray Keden.  Fred’s wife Kathryn and daughter Karen came to the board meeting after the vote. It was a special moment. They thanked the school board for its action and the community for our support. “I hope my father’s story will be an inspiration to high school kids,” Karen said of her father, “because they need positive role models.”  I also spoke at the meeting, noting that the naming of the 9th grade campus for Korematsu offered the school board the opportunity to teach our students a civics lesson.

Steven Tavares in his blog the East Bay Citizen called it an inspired choice:

The choice of Fred Korematsu is more than honoring a man, it honors an idea in short supply these days. Too often today our heroes are manufactured. . .  Fred Korematsu is a hero because history searched for him and not the other way around. While he believed Executive Order 9066 was deeply offensive to his sense of being an American, it was not until his arrest in San Leandro did history find the man who could fight back against the injustice of Japanese internment. It must be remembered, speaking out against the government was deeply frowned upon by the very Japanese-Americans who were forced to uproot families and live in dusty squalor. These were also deeply proud Americans who held the pain and humiliation of internment deep in their psyches. It is very common for the children of those sequestered during World War II to have known nothing of their parents experience into adulthood.

He added:

Stephen Cassidy is right when he said the honoring of Fred Korematsu is a civics lesson for the youth of San Leandro. There is no better historical figure who can inspire the centuries old desire of Americans to fight against injustice to forge a better nation. The San Leandro School Board did the right thing Tuesday night. They should be proud and the city will one day soon bask in the spirit of Fred Korematsu’s accomplishments as it begins to filter into the minds of a new generations of courageous Americans next fall.

The mayor and city council have adopted a series of budgets which have set San Leandro on the path to bankruptcy.   The latest revenue numbers show San Leandro’s day of fiscal reckoning is quickly approaching.

In May 2009, I wrote in an Op Ed for the Daily Review that questioned the overly optimistic revenue assumptions upon which the city’s budget was based:

The city has covered its deficit this year, and the deficit last year, by transferring millions from emergency reserve and self-insurance funds.  The funds have been drained to dangerously low levels.  If a major disaster should occur, San Leandro could go bankrupt in a matter of weeks.  Plus, these are one-time only funds being used for ongoing expenses.

The budget planned for the new fiscal year starting on July 1, 2009, is balanced on paper only.  It continues to draw on reserves and relies on unrealistic projections that tax receipts will increase.  In the midst of the worse recession post-World War II, the city is planning on a 4% gain in sales taxes and 3% growth in property taxes.

In a May 20, 2009, article in the San Leandro Times, I again criticized the mayor and city council for failing to produce a budget based on realistic assumptions:

“You’ve got a budget that is dead on arrival because it is based on expectations that are unrealistic,” Stephen Cassidy said.  “If they pass this budget, they will be doing the same thing Sacramento does and just passing it for the sake of passing it.  They need to roll up their sleeves and make decisions based on sound fiscal sense or they will be back in July or August asking where the money is, because this revenue is not going to just appear.”

A recent report from the city finance department demonstrates how flawed the city’s budget decision making has been this year.

The budget adopted by the mayor and city council in June 2009 called for $17.2 M in property taxes.  The city now projects it will receive $16.4 M in property taxes this fiscal year. That constitutes a 5% decrease in revenues from property taxes  (compared to the amount in the adopted budget).

Similarly, the city’s anticipated increase in sales tax receipts has proven to be a mirage.  Instead of generating $20.1 M in sales tax revenue, the city now projects $18.3 M in revenue.  The projected 4% gain in sales tax is now a 6% decrease (again compared to the adopted budget).

The city also projected an increase in receipts from the utility users tax.  The latest report shows receipts from the utility users tax will actually drop by $400,000.

Together, sales, property and utility users taxes are by far the largest sources of revenue for the city.  With each of these, the city projected greater revenues this fiscal year, and in each instance the city was wrong.

Turning back to the numbers, the budget adopted in June assumed $72.6 M in revenue, and contained $78.1 M in expenditures.  The resulting $5.5 M deficit is to be covered mainly by drawing down reserves.

As noted earlier, the city is spending one-time only money on annual, reoccurring programs and positions.  If continued year after year, that’s a prescription for fiscal disaster.  With latest financial data, revenues are projected to come in at $69.5 M, creating a potential $8 M plus deficit this year.

The city’s beginning fund balance, or its reserves, at the start of this fiscal year was $15 M.  Of this amount, $5 M is kept in a fund for natural disasters and other emergencies.  That leaves $10 M in reserves.

Given that the city’s deficit this year may exceed $8 M and the city is projecting $4 to $6 million annual deficits through 2014, one can see the gravity of the city’s fiscal crisis.  The city is could be forced to declare bankruptcy in less than two years.

No one would know the city is in the middle of a serious fiscal emergency from the actions of the mayor and city council.  No hiring freeze exists at City Hall.  The mayor and city council just hired a new assistant city manager.  In January, the police officers received a 4% pay raise, on top of a 4% pay raise in 2008.  The budget actually calls for a million dollars more in spending this year than last year’s expenditures.

We have a mayor and city council focused on preserving positions and benefits at City Hall, no matter the economic reality or risk of financial calamity to the city.  Instead of working to meaningfully reduce expenditures, the mayor and city council are moving full speed ahead with another tax measure, after having placed three tax measures on the ballot in November 2008.

What will be new for June 2010 is an increase in the sales tax, taking it to at least 10%.  San Leandro would have the highest sales tax in Northern California.  Even at this amount, the city would still be running annual deficits and additional tax measures would have to be placed on future ballots.

The mayor and city council are convinced San Leandrans will support higher taxes.  The mayor and city council were also convinced California would experience a strong rebound in both the sales and property taxes this year.

I believe any sales tax hike will go down to defeat.  Seven of the nine municipal sales tax measures on the ballot in California in 2009 lost.  The mayor and city council should not be rolling the dice and placing the fiscal solvency of our city on the outcome of an election.

I am the only candidate for mayor with a specific plan on how to solve the city’s fiscal crisis that does not rely on new taxes.  Please read my plan at http://www.cassidyforsanleandro.com/plan.html

I welcome your feedback and questions.