Councilmember Makes Budget Ultimatum
In Which: A long-serving Fire Chief retires, Financialized housing plan is further explained, and Council is split between panic and calm on the budget.
Wrongful Death Suit Settled
During the City Attorney’s report, in between the refrain of “took no reportable action,” a rare action was reported. The wrongful death suit we pointed out on Tuesday was resolved to the tune of $337,000—of which the City paid $150,000. It’s unclear, without going into the Court documents, whether this was an admission of guilt on the City’s part or merely a settlement to end the court battle that had been going on for almost a year.
Regardless, we hope the family of Oscar Macias has been able to find peace.
Long-Time Fire Chief Retires
After a 28-year-long career in Hayward, Fire Chief Garrett Contreras held a retirement ceremony with City Council on Tuesday night. Before getting to the long line of people looking to commend Contreras, Mayor Mark Salinas expressed his fondness for the Fire Chief. “I felt real pleased and quite proud to be the signature on your commendation tonight, sir.”
The Contreras then received recognition from the following local agencies:
The Eden Health District
Alameda County Supervisor Elisa Marquez
Assemblymember Liz Ortega’s Office
State Senator Aisha Wahab’s Office
Former City Councilmember Al Mendall
Representative Eric Swalwell’s Office
The City Council also took the time to address the bittersweet feeling of seeing off a well-respected and important figure who deserves retirement. One of the highlights of Contreras’s career, doubtless among many, was starting the HEART Program and engaging with community organizers on the subject—something the then-Chief of Police was seemingly unwilling to do.
It will be up to the Acting City Manager to appoint a new Fire Chief.
Wrong Agency, Who Dis?
A member of the public took aim at the Hayward Unified School District at the City Council meeting. After opening with the assertion that “the schools are horrible” and bemoaning the poor test scores—which are largely due to external factors like poverty, hunger, and immigration as opposed to the curriculum or teachers—the speaker then veered into conservative dog-whistling.
He alleged that the schools were promoting “harmful ideologies” that are “rejected by people of all faiths.” The United States was founded on the separation of church and state—something many Christian Nationalists are working to actively undermine. This may, ultimately, be the result of confusion around the Education City lens promoted by the Mayor.
The speaker insisted that the City Council “do something about it” because he was “tired of having my money forcefully taken to support an institution that’s failing.” Not only is this anti-democratic, it’s not even the correct agency to complain to. But if any readers ever do want to complain about HUSD schools, feel free to attend the next HUSD Board of Trustees Meeting on June 22nd.
Affordable Housing Plan Explained
Councilmember Syrop asked for the down payment assistance program to be discussed in a little more detail. He asked for confirmation that the $2,000,000 was being transferred to the Hayward Housing Authority to get around some Federal time-limits and also asked for more explanation on the program.
City Staff explained that the idea is for a non-profit partner to purchase properties with, if memory serves, investor/donor funds as a part of a Social Impact Bond. The non-profit would then refurbish the house and sell it to low-income first-time homebuyers at below-market rates, though it won’t be deed-restricted—meaning that the home owner could then re-sell it later at full market rate. The $2,000,000 would provide down payment assistance—up to $300,000—to the home-buyer.
Councilmember Syrop expressed skepticism around the final mortgage payments—an $800,000 home with 20% down payment will still cost over $5,000/month—but his concerns were assuaged some by the assurance that the homes would be sold below market rate. However, he did request updates on the program as housing is one of his areas of interest and a high priority for the community.
City Budget Causes Tension
The City Council approved the City’s Fiscal Year 2025 budget, but not without concerns. The divide seemed to be between the newest members of Council—those elected/appointed in/after 2022—and those who have been around a bit longer. The new councilmembers expressed serious concern over the $1,000,000 budget shortfall.
City Staff attempted to temper the strong reactions by explaining that San Leandro approved a budget with a $5,600,000 deficit and San Mateo approved a budget with a $10,500,000 deficit. They noted that this is a statewide trend and explained, yet again, that Staff always brings conservative budgets to the table—meaning they guess low on income and high on expenditures. In the past, just about every budget expected a deficit and wound up being a surplus.
New Councilmembers Nervous About Budget
But some Councilmembers were not convinced. “It does make me nervous,” said Councilmember Julie Roche, “that our reserves are going down.” Though she did recognize that “in this economic climate, people are having to dig deeper.” In an effort to be more active on the budget, Councilmember Roche suggested having a meeting on the budget in September to strategize how to replenish the reserves. “It might be too late,” she said, “to do anything for that next budget” at the mid-year review.
She attempted to get some kind of temperature check from City Staff and the Acting City Manager said, “the City’s been in this position before” and “as an organization, we’ll do what we need to do.” However, Councilmember Roche was still hesitant, saying that the dwindling reserves are “very nerve-racking for me.”
Councilmember Bonilla said, “I, too, am concerned at the use of reserves.” He had previously expressed a desire to see City Staff outline what may happen as a result of cutting to balance the budget—for example, freezing the 74 currently vacant positions. “If I’m a member of the community,” he said, “how do I feel that impact?”
Referencing unnamed residents who have expressed concern around the budget, Councilmember Bonilla went all in on balancing the budget. “We need to be comfortable making these [cuts] because we’re gonna have to make these hard decisions in order to get a better financial trajectory,” he said, “Everything needs to be on the table.”
And despite recognizing City Staff’s conservative projections, he issued an ultimatum to City Staff: “I, personally, won’t support future budgets with this kind of projection of using reserves,” Councilmember Bonilla said, “We’ll have to have other discussions.” He also asked Staff if the use of reserves would cause an issue with the City’s credit or bond ratings, impacting the City’s ability to borrow money for big projects. Staff responded, “I don’t think it’s a significant concern right now.” She cited multiple other factors that go into determining the City’s financial health, all of which the City is on top of.
Councilmember Bonilla closed by explaining his views on Council priorities. “I think all of us [on Council] agree that making sure our city is in a strong financial position is our #1 priority for all of us.”
Councilmember Syrop, who sits on the Budget and Finance sub-committee, also wanted the City to think about “how we deliver a budget that replenishes itself and is regenerative in the long run.” But his comments were mostly about highlighting the issues that community service providers face when using City funds, “I encourage us, as a City, to look through the burden we place on our community partners.”
He explained that, in some cases, significant money goes toward administrative reporting instead of providing services—a significant criticism of means-testing that accompanies government funding for services. Councilmember Syrop said that he wanted to make sure “how our budget interfaces with our service providers and our partners isn’t forgotten.”
Councilmember Goldstein also expressed a desire for corrective budget action, but fell far short of Councilmember Bonilla’s fervor. He expressed a desire to “plan for a variety of possible changes. It’s the fiscally responsible thing to do.” Councilmember Goldstein said he wanted to use the “levers and dials” available, but to make changes “with minimum impact.”
Long-Timers Urge Calm
Councilmember Angela Andrews, a veteran of a few budgets, supported having a September update—as Councilmember Roche had suggested—but primarily focused on the administrative burden brought up by Councilmember Syrop. While recognizing that much of the administrative burden was due to Federal mandates, she said, “The Community Services Commission (CSC) can also look at some of the administrative burden that they are requesting from agencies.”
Of the approximately $1,870,000 that the CSC allocated to outside agencies this year, only about $700,000 of it was City money without any strings attached. And as much as $200,000 of that is also being taken away from their control in favor of Councilmember Andrews’s Arts Department in the City. So there’s only control over as little as 1/3 of the money that the CSC allocates.
Councilmember Francisco Zermeño, who had previously expressed relief at how low the expected use of reserves was this fiscal year, asked what measures were available to increase the reserves. City Staff explained that the options were mostly to cut spending, like freezing staff positions or reducing supplies and services spending.
But Councilmember Zermeño also encouraged Staff to explore increasing the Transit Occupancy Tax, also known as the Hotel Tax, to the fully approved amount, if needed. Staff has been reluctant to do that, fearing pushback from hotel customers who have only just started to return after the pandemic. Overall, however, he seemed unconcerned about the budget.
Mayor Mark Salinas closed with a reflection on his time looking at Hayward budgets. When he was elected “the entire economy was collapsing,” he said, “the City was hemorrhaging money money… We were funding social services unlike any other time.” Mayor Salinas was initially elected to City Council in 2010, during recovery from the Great Recession of 2008. “One of the biggest takeaways… in addition to all the expert tactical work,” he said, “is stay steady, stay on course.”
He stressed that the budget was still important and that “it doesn’t mean we don’t pay attention to this,” however Mayor Salinas pushed for calm. “Economies go up, they go down,” he said, “We will certainly get through this. I call upon my colleagues to stay steady and stay on course.”
The Last Bits
City Council had to approve a few last things, but the comments were pretty limited.
Still Nowhere Near The Legal Limit, Officer
The City Council approved the Gann Limit, which is the limit—by state law—on how much the City can collect in tax revenue. The approved limit is $413,000,000 while the actual tax revenue is only $167,000,000. For context, the total revenue collected by the City—even those funds exempt from this limit—is only around $200,000,000.
Imagine living in a world where this limit was more than a formality.
Shiny Dashboard for Strategic Roadmap Incoming
A new dashboard will be released for the Strategic Roadmap projects sometime in July, according to City Staff. It will include pages for most, if not all, of the City projects, with Gannt charts to track progress and other relevant metrics that need to be recorded. Staff also said that data updates should happen at least quarterly.
Council was excited about the dashboard, not the least because, as Councilmember Roche said, “When we get questions, we can defer them to this. [sic]” Councilmember Bonilla tied the strategic roadmap, which was the actual item up for approval, to the budget. “[Residents can] see why the needs of the City are greater than what budget we have available to support all of those [projects].” He also expressed a desire to see the Strategic Roadmap included in the September budget discussion, to tie budget changes to “potential implications” to the projects.
Councilmember Syrop also spoke in favor of the dashboard, saying that it “communicates our vision as a City.” He also encouraged City Staff to be flexible with the data they gather and be open to changing what’s tracked if it’s not proving useful. Staff assured him that the software was flexible enough to change metrics if needed.