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AB 2561
Overview
Assembly Bill 2561 (AB 2561)
Assembly Bill 2561 amended the Meyers-Milias-Brown
Act and requires local public agencies to conduct
an annual public hearing regarding workforce
vacancies prior to adoption of the final budget.
Annual Reporting Requirements
• Status of authorized and vacant positions
• Recruitment efforts
• Retention efforts
• Hiring challenges and workforce trends
• Potential changes to policies, procedures, or
recruitment activities that may impact hiring
Additional Reporting Requirement
If vacancies within a bargaining unit reach or exceed 20% of authorized fulltime positions, additional information may be required upon request of the recognized employee organization.
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Workforce Overview
The Human Resources Department continuously monitors
workforce needs to support the effective delivery of City services through:
•Workforce vacancies and vacancy management
•Recruitment and retention initiatives
•Employee development and succession planning
•Changes to hiring practices, policies, or procedures
•Labor market trends workforce conditions
This presentation fulfills the annual reporting requirements of AB 2561 while providing an overview of the City's workforce management efforts.
5 Current Workforce Status
Employee Group Authorized
Positions Vacancies Vacancy Rate
Part-Time Employees 293 44 15.0%
Mid-Management & Non-Management
FT 165 16 9.7%
Unrepresented/Confidential 5 1 20%
Executive 10 1 10%
City Totals 473 62 13.1%
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Recruitment and Retention
Efforts
Recruitment Efforts
• Recruited & filled over 135 vacancies including our YES summer hires • Processed approximately 2,500 employment applications • Advertised vacancies through the City’s website, GovernmentJobs.com, and other professional recruitment platforms
• Maintained eligibility lists to support both immediate and future hiring needs Retention Efforts
• Provided competitive salaries and a comprehensive benefits package • Supported ongoing employee training, professional development, and leadership growth opportunities • Recognized employee contributions through service awards and employee appreciation programs • Promoted career advancement pathways and succession planning initiatives • Invested in wellness programs, employee engagement efforts, and work-life balance strategies 7
Challenges & Workforce Trends
Challenges and Workforce Trends
Continue to fill
vacancies in 90
days or less.
1 Continue to
support employee
development and
retention.
2 Strengthen
succession
planning
initiatives.
3 Monitor staffing
needs across the
organization.
4 Maintain a stable
workforce to
provide quality
services to
community.
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Key Priorities & Takeaways
Key Priorities
• Fill vacancies within 90 days or less
• Strengthen employee retention and professional development • Enhance succession planning and workforce readiness
• Promote employee wellness, engagement, and workplace culture • Conduct regular policy and procedure reviews to ensure compliance and operational effectiveness
Key Takeaways
• The City remains compliant with AB 2561 requirements. • The City is committed to attracting, developing, and retaining a high performing workforce while supporting compliance, employee success, and ensuring exceptional public service.
9 FY 2026-28 Budget Overview
Proposed Budget:
• Maintains fiscal stability during a period of significant revenue uncertainty
• Addresses the anticipated impact of Attorney General regulations affecting card club revenues
• Continues funding core City services while minimizing impacts to residents
• Includes targeted expenditure reductions and vacancy eliminations • Preserves flexibility to adjust the budget once revenue conditions become clearer
Measure PC Impact
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FY 2026-28 Budget Timeline FY 2026-28 Budget Timeline – How We Got Here 12 13
FY 2026-28 Budget Timeline – How We Got Here
FY 2026-28 Budget at a Glance
14 Major Fiscal Challenges
15 Preliminary Budget Deficit
Before Budget Reductions
16 FY 26-27 FY 27-28
Preliminary
Deficit $7.0M $14.4M
Preliminary deficit total $7.0 million in FY 2026-27 and $14.4 million in FY 2027-28 before implementation of proposed budget reductions
Actions Taken
Budget Reduction Strategy
• Operating Reductions
• FY 26-27: $0.6M
• FY 27-28: $1.4M
• Labor Savings: $400K annually
• Actions Taken
• Eliminated vacant positions
• Reduced departmental budgets
• No new ongoing programs
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21 Budget Outcome
22 • Recession fears have eased; the economy remains in a relatively uncertain environment
• Inflation continues to remain elevated (CPI – US: 3.8%, LA-Long Beach-Anaheim Metropolitan area: 3.7%)
• Consumer spending has softened in certain sectors
• Interest rates remain high (3.50% to 3.75%)
• Ongoing concerns surrounding supply chain issues & labor market conditions (unemployment rate: US: 4.3%, California: 5.2%, Commerce: 2.7%) • Broader geopolitical instability
• Market Volatility – uneven performance across industries 23 • Major decreases to the two largest revenue source:
• Card Club License Fee
• Year 1: decrease of $6.5M or 21% (compared to FY 25-26) • Year 2: decrease of $13.0M or 43% (compared to FY 25-26) • Sales Tax Revenue
• Year 1: decrease of $2.3M or 8% (compared to FY 25-26) • Year 2: decrease of $1.3M or 4.5% (compared to FY 25-26) • Measure PC revenue not included in the budget; will be recognized in January 2027 • Modest increases to other revenue sources:
• Other taxes (property taxes, hotel visitors tax, franchise fees): increase of $1.1M (year 1) and $1.3M (year 2)
• Licenses & Permits (building permit fees, plan check fees, other planning fees, business licenses): increase of $1.0M (year 1) and $1.2M (year 2) • Use of Money (interest earnings & property leases): increase of $0.5M (year 1) and $0.6M (year 2) 24
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31 GENERAL FUND SUMMARY
($ MILLIONS) FY 2026-27 FY 2027-28
Total Revenues $76.6 $72.0
Total Expenditures 82.7 84.6
Operating Deficit $(6.1) $(12.6)
Key Revenue Drivers FY 2026-27 FY 2027-28
Sales Tax & Cardclub License Fees 50.3 44.8
% of Total Revenue 65.7% 62.2%
Major Expenditure Categories FY 2026-27 FY 2027-28
Public Safety, Parks & Recreation, NonDepartmental & Public Works 61.3 63.1 % of Total Expenditures 74.1% 74.5%
FY 2026-28 Budget Summary
32 Personnel Changes
33 • Personnel changes are primarily comprised of vacant position eliminations and reclassifications.
• Recommendations were developed to improve organizational effectiveness while minimizing impacts to employees and service delivery
• Changes support long-term operational needs and succession planning efforts.
• Net fiscal impact: approximately $400K in annual savings Personnel Changes
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FY 2026-28 CIP
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FY 2026-27 Other Funds
39 *Proposed transfers from the General Fund will reduce the negative ending fund balances **Does not include $24.0 million in reimbursable costs from capital projects FY 2027-28 Other Funds
40 *Proposed transfers from the General Fund will reduce the negative ending fund balances **Does not include $24.0 million in reimbursable costs from capital projects Other Funds
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January 2027 Budget Reassessment
• The proposed FY 2026-28 Budget is intended to be a temporary and conservative spending plan due to ongoing uncertainty surrounding card room litigation and the regulatory matters.
• Measure PC revenues are not included in the proposed budget. Staff estimates approx. $3.4M in Measure PC revenues will be generated during FY 2026-27 based on nine months of collections.
• Staff will return to the City Council in January 2027 with updated revenue projections and budget recommendations.
• Depending on actual revenue performance and developments related to card room operations, staff may recommend restoration of budget reductions or additional expenditure adjustments.
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Recommendation/Next Steps
• Receive and discuss the proposed FY 2026-28 Biennial Budget during today’s session.
• Provide staff direction regarding any desired modifications to the proposed budget.
• Incorporate Council direction into the final budget resolution, as appropriate.
• Adopt the FY 2026-28 Biennial Budget at the June 23, 2026 City Council meeting.
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