San Leandro Council splits $915,936 year-end surplus: half to pension trust, remainder to roads and CDBG reserve

SAN LEANDRO, Calif. — The San Leandro City Council voted unanimously on March 17 to appropriate the city's fiscal year 2023-24 unallocated surplus of $915,936, splitting the funds between the pension trust and local priorities.

Mayor Juan Gonzales moved the amended allocation and said, "I would move that we spent half the money as recommended by staff for the pension trust, and we spend 30% of the money on roads and 20% of the money be set aside" for potential community services shortfalls. The motion passed 7-0.

Why it matters: Council members and speakers said they wanted to both address long-term obligations and preserve one-time money for pressing capital needs and nonprofit services if federal funding drops. Staff told the council one half of the surplus is already covered by city policy that directs money to an unfunded pension trust; the council's action confirmed that and identified a specific distribution for the remainder.

Details of the appropriation: The council recorded the unallocated fund balance at $915,936. Under the adopted split, $457,968 (50%) will go to the city's pension trust; $274,781 (30%) will be appropriated for street repairs and related surfacing or ADA ramp work; and $183,187 (20%) will be held as a one-year restricted reserve to offset any unexpected reduction in Community Development Block Grant (CDBG) funding. Finance staff and the city manager described the 20% reserve as time-limited: if the city receives its anticipated CDBG allocation, the set-aside would be released to roads after the FY25-26 budget year (proposed window 07/01/2025'06/30/2026).

What staff told the council: Assistant Finance Director Felicia Silva walked council through the year-end audited numbers and the mechanics of the fund balance. She said revenues exceeded expenditures overall but that $4.3 million of carryover was already budgeted for ongoing items, leaving the $915,936 unallocated balance. The city manager reminded council that the general fund faces a structural deficit and that reserves are frequently used to balance near-term budgets.

Council debate and public input: Council members pressed staff on trade-offs. Councilmember Bolt and others said they favored roads because of visible local deterioration; Councilmember Vivero Walton and others urged holding some funds to protect social services, particularly programs funded by CDBG. Councilmember Azaveda asked what $457,968 would actually buy for streets; staff explained resurfacing and ADA ramp costs used to estimate impact.

Public commenters recommended a range of options: some urged using the funds for roads, others to shore up nonprofit services and tenant protections if federal funds fall. Human services and community development staff told council the city typically receives about $800,000'$850,000 in annual CDBG allocation, most of which funds capital housing efforts; a smaller portion funds direct public-service grants (staff listed current public-service awards of roughly $22,000 to Calico, $30,000 to Davis Street, $39,000 to Meals on Wheels and $30,000 to Spectrum).

Official action and next steps: The council voted 7-0 to adopt the amended appropriation. Staff will implement the transfers and set up a restricted reserve account for the 20% CDBG insurance pot. Finance staff said they will return to council with any recommended release of the set-aside after the FY25-26 funding picture becomes clear and as part of the upcoming biannual budget process.

Context and limits: Council and staff repeatedly emphasized restraint: half the surplus must go to the pension trust under existing city policy unless council takes a separate, noticed action to suspend that policy. The city manager and finance staff said the one-time allocation does not change the city's structural budget issues and that larger, recurring revenue or expenditure decisions will be addressed during the formal budget cycle.

What to watch: City staff will report on FY25-26 budget proposals in April and May as part of the biennial budget review; councilmembers signaled they expect to consider additional adjustments to reserves and program funding once that broader fiscal picture is presented.