Here’s an excerpt from San Leandro Mayor Tony Santos’ interview May 26:

Q: On the budget, it seems the reserves are dwindling. What’s the outlook?

A: Budgets for local government have always been a test any way. Cities just don’t have the wherewithal to raise revenues as can the state or the Federal government….If there is one thing [Gov. Arnold Schwarzenegger] did that was absolutely ridiculous, in my opinion, was cutting the vehicle license fee. If that fee had still been in place during the last five or six years the state would probably not have been as seriously impacted as it now is. As a result the state took approximately $4.1 million from the city. Our reserves are pretty well gone. In the past three years, we’ve used approximately $16 million to balance our budget and to keep services at a fairly decent level. If the economy does not pick up, we’re going to be further constrained.

Q: Most economists say the economy won’t pick up until, maybe, the end of 2010. How worried are you the budget will become even more problematic in the future?
A: I will say that we have an excellent interim finance director in Perry Carter and a knowledgeable city manager. By the way, the staff has been a lot more stronger on budget cuts than has the city council. The staff has recommended cuts that we have restored.

Q: Is it surprising that the city council would buckle under over a budget staff that is faceless and not accountable to voters?

A: The staff doesn’t respond to the political will of the people. We do. We have to consider our constituents and their feelings.

Q: Like Farrelly Pool?
A: Yes, we just restored partial operations of the pool. We were going to cut it. Well, people came and said they wanted to restore it. So, we’re going to do that, but, in order to do that we’re going to have to almost double the fees for swimming in town. Other pools such as the Boy’s and Girl’s Club and the Aquatics Center will need to contribute to keep Farrelly open. And we’ll see too, because the public out there that wants to keep Farelly open said they will go and hold fundraisers keep it open. We’ll see if that occurs.

Q: As a matter of precedent, how do you feel about raising fees on city services in the short term that will likely never be reduced.
A: Just yesterday at the Shoreline Marina committee, we were talking about charging a fee for berthing. You know, this is the problem when you have a financial situation. We’re in a crisis, not only nationally, but locally. Last Sunday, I noticed there were a lot of cars parked at Walmart. So obviously, they’re looking for discounts and for the cheapest place to spend money, but what they don’t understand, in my view, what you are doing is subsidizing China, Vietnam, the Philippines or wherever because the goods are not manufactured in the United States, but offshore.

Q: Let’s talk about the hospital. Some people are saying there’s no leadership from the city about saving San Leandro Hospital.
A: I’ve been involved in the issues before it was even before the public. I was elected mayor in 2006 and February of 2007, the head of the physician’s association sat in the same chair you’re sitting and asked, “Can the city take over operation of the hospital? Would the city be interested in a hospital tax and how can the city get involved?” Over the period of over two years I’ve had all of these discussions with two county supervisors, chiefs of staff, hospital district presidents, board members.

I’ve been telling these people for two years they need to work on saving this hospital. I have not been behind the curve, but in front of the curve, but my frustration is that people don’t understand the city and the mayor has made every effort to keep this hospital going. I’m as concerned as anybody else that 20,000-30,000 people use the ER yearly. I’ve asked Sutter and the Township District to do what is necessary to keep the ER open. This has happened before the public has organized.

Here’s what is missing. Neither the city or the county has jurisdiction over the hospital. It rest with the Eden Township District Board of Directors and I’ve been involved with them for the past year. I have told them repeatedly, look, you folks need to come up with some alternative plan to keep this facility operating. It’s up to you. They’ve asked us to take it over. In my view, we don’t have the means to do that. They’re talking about startup costs of $35-$40 million. You’ve got this deficit, where are we going get $40 million? And we don’t have the expertise or the license to operate a hospital.

Q: But, this loss of control wasn’t always like that in the past? Right?
A: Well, like everything there is a history. Sutter reached an agreement with the hospital district and there is no question Sutter stacked the board for awhile there. Somehow, Sutter put six non-elected members on the board and created an 11-member board. In that arrangement, Sutter oblviously controlled any action for operating both hospitals…Then Sutter decides to put all of their eggs in the Castro Valley basket and build a new hospital there. With that Sutter now looks at extricating itself from San Leandro because the operation is a drain on their finances to $15 million a year and they didn’t want to pay for that subsidy even though a lot of people in the public want them to do it. There’s nothing that forcing them to do that.

Q: Do you agree with opponents charging Sutter is red-lining affluent patients from low-income, possibly non-paying, patients?

A: In all honesty, I’m not here to speak from anybody’s perspective. Somebody else will have to look into that. The thing I want to do is speak from a realistic position. I will add that only 33 percent of the ER patients come from San Leandro.

Q: What do you think may happen with this hospital?
A: The options are [Sutter] can purchase the building or the property or extend the lease. Sutter has an option to do those things. I’ve heard on the grapevine, not from Sutter, that they are not going to do that. They want out of there.

Q: But, what are the odds of keeping this hospital open?
A: I understand from the district that they may have two possible vendor who may be interested in operating the facility.

Q: Do you know the names of those two vendors?
A: I heard that one is Kaiser and they don’t know who the second one is .

Q: Do you think the addition of Kaiser in this equation is plausible?
A: I’ve had discussions with Kaiser and they suggest that they need to move their acute care unit out of Ashland. So they have made a cursory inquiry to whether it is possible to move that over to San Leandro. What it means to me is that the district has many options.

Q: Alameda County Supervisor Scott Haggerty said the city should put forth a city-only ballot measure on the hospital during a recent board meeting. Do you think he was just passing the buck to you and the city council? A few of them were a bit harsh.
A: I heard they were very harsh on the city, but myself, I’m not into getting in a fight with the Board of Supervisors. I’m here to be the mayor of San Leandro. I just think there is so much misinformation that is out there. Nobody, not the board, maybe, not even us, really have come to grips with what the true issues are. Look, go back to what I just said, neither the board nor the city have jurisdiction over the hospital which happens to be within the borders of San Leandro. We just don’t. Any possible options should come from the [Eden Township District] not from us.

Q: This issue is not within your jurisdiction, therefore, politically nothing could happen to you or the council if they rattle the cages. Little could happen politically if it fails and the possibilities are boundless if there’s success. Why do councilmen like Jim Prola and Michael Gregory only speak on the record as citizens and not as elected officials?
A: Because, number one, we have a charter and the political spokesperson for the city is the mayor. So, the mayor has the right to speak on the behalf of the city. Those two individuals don’t speak for the city council, Technically, the council does not have a position.

Q: But, the council passed a non-binding resolution in favor of keeping the hospital open, right?
A: And what did it say? It said the same thing, I think, I’m telling you. Save the ER, Save the hospital. Personally I don’t think it’s a good idea to go to another body and tell them what to do and how to do it. I believe it becomes counter-productive to have this discussion go back-and-forth. They’re blaming us, we’re blaming them. I’m not for that. I wouldn’t want them to come to us and tell us to do something. I wasn’t there.

I don’t have anything to base this on, just an opinion. What’s going to happen is someone is going to come into San Leandro and operate it as a rehab unit. I understand the need is there throughout the county and that will happen. I think the county board of supervisors are in a bind. I cannot see them rejecting Sutter’s EIR to build a new hospital. I think if they do, they are placing that hospital in jeopardy. I think right now, Sutter holds the cards.

Q: If the hospital closes, though, the public perception is going to be you and others dropped the ball. How do you think voters are going to react to that premise?
A: I represent 85,880 people. I represent the city of San Leandro. I have to do what is right for the city. I can’t force the hospital board to take the action I would like to see them take. What am I going to do? People can blame me all they want, but my only defense is that I did my best to keep this hospital open. I couldn’t stop it.

Q: You mentioned that you once worked for AIG. When was that?
A: Back in 1985. I only worked for them two years.

Q: So, we shouldn’t expect to hear the mayor being indicted or anything?
A: [laughing] no.