San Leandro unveils FY 2026–27 budget with staff cuts, library hour reductions and possible revenue measure

Nicole Gonzales, San Leandro’s finance director, presented the proposed FY 2026–27 biennial budget to the City Council after a string of public comments about encampments and neighborhood safety. Gonzales said the proposal brings expenses less transfers into alignment with projected revenue for fiscal year 2026 but still projects a use of fund balance for 2027 that falls short of the city’s 20% reserve policy.

The presentation laid out the city’s long‑term forecast and a strategy to address a structural deficit. Gonzales said the city’s fiscal year 2026 revenue projection is roughly $225 million and that the proposed budget relies on reductions across departments — prioritizing elimination of vacant positions and cuts to services and supplies — to limit impacts on currently filled jobs and essential services. She noted a $5,000,000 emergency designation is retained and explained that available funding for economic uncertainties meets the 20% target in FY26 but is projected to be about 15% in FY27.

"We made additional technical reductions in fiscal year 2027 and brought the projected use of fund balance down," Gonzales said, while acknowledging FY27 remains short of the council’s policy. She identified rising personnel costs, pension and retiree medical liabilities, increasing internal service fund charges and unfilled but necessary capital needs as key drivers of the deficit.

Department directors outlined how the reductions would be implemented. Brian Simons, library director, said the library plans to eliminate just over five full‑time equivalent (FTE) in part‑time staffing, close Sunday service at Main and Manor, shorten Monday hours at some branches and reduce acquisitions and public arts funding. "We will reduce new purchases of materials by roughly 31% and reduce program supplies by about 13%," Simons said, adding that the Mulford location’s reopening plan remains in the budget if council proceeds with the project.

Human Services Director Jessica Lobedon described large reductions in professional services funding and said ARPA carryover will temporarily support the city’s alternative response unit (ARU) but that full general‑fund support would be needed in FY27. "We are seeking ongoing general fund support for the alternative response unit, which was previously funded through ARPA," Lobedon said.

Other departments detailed targeted cuts and limited, strategic increases tied to legal or operational requirements. Public Works announced elimination of multiple vacant maintenance and engineering positions and warned of longer lead times for pavement and sidewalk repairs; Parks and Recreation described 11 FTE reductions but plans to maintain high‑demand programs by contracting instructors and increasing volunteer recruitment.

Council members debated whether to earmark money — roughly $500,000 was discussed — to fund outreach for a potential revenue measure campaign to voters. Councilmember Simon and several others said the city cannot cut its way out of persistent infrastructure shortfalls and supported investing in a campaign to seek new revenue; staff cautioned that drawing down reserves could affect credit rating and borrowing costs.

Two procedural extensions of meeting time were approved while the council discussed the budget. A motion to extend to 11:00 p.m. passed unanimously earlier in the evening; later extensions to 11:15 p.m. and an additional 15 minutes were also approved. The council agreed on a schedule of follow‑up opportunities for further review: a public works CIP presentation, a city manager town hall, and a June 16 public hearing and adoption vote.

What’s next: staff will prepare the packet for the June 16 public hearing and, contingent on council direction, will return with additional detail on the revenue measure outreach request, mid‑cycle adjustments and a plan for fleet replacement timing and other capital priorities. If the council adopts the budget as proposed, staff said the FY26 numbers will meet the council’s 20% target but FY27 will require further reductions or new revenues to meet the policy.

Votes and formal motions related to the session were procedural (extensions of meeting time) and passed on recorded roll calls during the evening.