Facing a hard deadline to put forth a balanced city budget by the end of the month, the San Leandro City Council closed a $7 million budget shortfall that includes the potential for later shifting more than $1.7 million from its police department to bolster various community services.

San Leandro beatMonday’s council meeting featured over three hours of public testimony inspired by the Black Lives Matter movement and outrage over the killing last April of Steven Taylor by San Leandro Police. A vast majority of the speakers urged city leaders to reallocate a portion of the police department’s budget to social and human services.

San Leandro councilmember, however, disagreed on the timing of the proposed cuts during the nearly eight-hour meeting. An amendment to the budget vote by Councilmember Benny Lee was successful in setting aside up to $1.7 million in funding that could include cutting two sworn police officers, a student resource officer, and $229,000 for new police vehicles, among other items in the budget.

“Let’s commit to doing some line items tonight,” Lee said. “We could put those line items into a bucket and start talking about how do we allocate them. We need to start talking about restructuring the budget, but I don’t think that could happen in the next two weeks,” he added.

San Leandro Mayor Pauline Russo Cutter agreed, urging the council to first pass the Fiscal Year 2020-21 budget prior to the June 30 deadline and begin discussions for amending the budget, starting at its July 6 meeting, along with creating a budget task force. “We have an unprecedented opportunity to make the changes that we need to do now in our community. I just ask for the time to do them correctly,” Cutter said.

Three councilmembers, however, believed time is of the essence and pushed for the reallocation of funds immediately. “I will be voting no on this budget,” Councilmember Corina Lopez said. “I don’t think this budget reflects what the community wants.”

The council, though, voted to approve the $120 million fiscal year budget, along with the amendments, 4-3. Councilmembers Ed Hernandez, Victor Aguilar, Jr., and Lopez voted no.

“I’m focused on reform,” Hernandez said, prior to proposing the council make a 10 percent cut to its police and fire budget, a reduction of about $7 million. Hernandez proposed shifting funding to bolster an existing $2 million set aside in the budget for human services. “This is not just a national movement, but one that continues to affect our San Leandro community,” Hernandez said.

Aguilar, Jr., meanwhile, questioned a $229,000 budget item for the purchase of four new police vehicles, an expenditure other councilmembers and the public seriously questioned.

Yet amid the immense movement nationwide and locally to defund police departments, there remains political risks down the round for cutting police budgets, some councilmembers noted.

“I want to remind the public that we have a really good police department. That doesn’t mean we don’t need to reform the police,” said Councilmember Pete Ballew, a former San Leandro police officer.

“What does it mean to cut $7 million from a budget?” Ballew asked. “Does it mean I have to wait 30 seconds for a 911 operator to answer the phone, as opposed to 8-10 seconds?” Ballew questioned if businesses will accept possible reductions in services, such as a non-response policy for security alarms. “The people that this is gong to affect need to be able to sit at that table and make these decisions,” Ballew said in urging for a public vetting of the proposed budget changes.

Monday’s debate over funding for the police department overshadowed a deeply abysmal financial future described for hopefully the short-term. Like most cities, a once positive fiscal outlook last February slammed into a horrific and abrupt economic downturn caused by covid-19.

San Leandro’s sales tax receipts are expected to drop by 15 percent due to the pandemic, with the Real Property Transfer Tax is estimated to fall by 20 percent, said Assistant City Manager Liz Warmerdam, who is also serving as interim finance director. The city, though, projects property taxes to increase by two percent over the next fiscal year.

The city’s budget shortfall for the current fiscal year amounts to $7 million. But the figure is expected to rise to $11 million in Fiscal Year 2020-21, Warmerdam said, and further draining a once robust reserve fund totaling $52 million.

“It is a healthy balance,” Warmerdam acknowledged. “Thank goodness because covid is going take a very large bite out of that fund balance.”