Agenda Item No: O.4
AGENDA REPORT
DATE: May 26, 2026
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: FN Budget Update
Budget Update for Fiscal Years 2025-2026 and 2026-2027
Funding Source: Various
Contact: John Furtado, (707) 428-7629
RECOMMENDED ACTION
Receive report, open discussion, and provide direction to staff.
STATEMENT OF ISSUE
Resolution 2025-103 was adopted on June 17, 2025, appropriating the fiscal year (FY) 2025-2026 and 2026-2027 budget. This update is not a full rebudgeting but to provide updates requiring adjustment for FY 2025-2026 and 2026-2027.
DISCUSSION
General Fund
At this time, General Fund revenues are estimated to increase by $1.7M over what was originally budgeted for FY 2027. That is driven primarily by adjustments to property taxes. As Solano County continues to make progress on corrections to property taxes as a result of their new property tax software implementation , the City along with HDL property tax consultants have increased confidence on the property tax value and projections going into FY 2027.
Base General Fund expenses are estimated to increase by $2.6M at this time. Primarily driven by support needed for the Housing Services Department, MOU impacts and net impact of the energy conservation project financing costs.
Landscape and Lighting Maintenance Districts ( LLMDs) impacts are currently estimated to be $2.8M, final numbers will be presented in the final budget adoption.
Although many expense impacts have been absorbed by departments through realignment within their department budget, not all costs could be absorbed. Below is a summary of proposed increases for FY 2026-2027.
Ongoing Amount
LAFCO Countywide Commission 35,000
Legal Services - City Attorney 37,000
SACA JPA Animal Control 20,000
Solano Animal Care Services SHELTER 35,000
Downtown Theatre Contract Management 185,000
Fire Investigator Contract 15,000
Fire Fuel Cost Increases 37,433
Fire Stations 35 & 36 Utility Cost Increases 65,300 Janitorial Labor and Materials for Fire Station 37 6,000 Citywide Additional Water Costs 25,000
PG&E Streetlights 300,000
PG&E Traffic Signals 75,000
Landscape Maintenance Cost Increase 65,000
Total 900,733
One-time Amount
Fire Consolidation Study 30,000
Relief Staffing
The Fire Department’s overtime continues to add pressure to the general fund deficit with FY 2025-2026 estimated to exceed budget by over $1M for the sixth straight year. The primary driver is the combination of increased occupational injuries and the need to maintain minimum staffing levels. This combination negatively impacts our personnel and our budget through the mandatory overtime required to fill vacancies. To reduce mandated overtime and decrease the associated burden on the Fire Department’s staff and budget, the City is recommending the addition of nine relief staffing firefighters. Although there will be one-time costs of approximately $1.3M in year one, this model is expected to generate direct cost savings of approximately $100,000 annually. There are expected secon dary impacts of reduced injuries, increased health and well-being of staff, and potentially reduced costs as a result of decreased injuries.
What is Being Requested?
Nine additional firefighter/paramedic positions which equate to three per shift The additional three will not become part of minimum staffing Referred to as over hires, additional staffing is intended to cover up to three vacancies per day without requiring overtime to backfill
Key Operational Impacts:
1) Relieve Unsustainable Overtime and Reduce Costs
Current staffing relies heavily on mandatory overtime to meet minimum daily staffing.
Adding nine firefighters will significantly reduce overtime, creating a more sustainable staffing model.
2) Improve Firefighter Health, Safety, and Retention
Firefighters working 48-hour shifts are frequently held over, contributing to fatigue, burnout, and injury. Increased staffing will reduce injury-on-duty hours, improve recovery time (mental & physical), and help prevent further medical retirements.
3) Improve Community Safety and Response Times
Well-rested, fully staffed crews respond faster and operate more effectively
Injury on Duty (IOD) & Vacancy Stats
4.5 – average number of vacancies per day 2025 and 2026 year to date (YTD) Sharp and sustained increase in IODs beginning in 2021 o 2021 – 7th company deployed and minimum staffing jumped to 21
As workload has increased, so has the toll on personnel. IOD hours have grown tenfold—from an average of fewer than 1,000 hours annually prior to 2020, to an average of nearly 10,000 hours per year over the past five years. In 2023 alone, the Fire Department recorded 12,895 injury hours—the equivalent of 4.4 full-time firefighters lost for the year. Each absence triggers backfill overtime, fueling a self-perpetuating cycle of fatigue, increased injury risk, and higher costs.
2018 2019 2020 2021 2022 2023 2024 2025
IOD Hours 943 458 3,517 10,466 10,169 12,895 9,059 6,701
Staffing Adjustments
Multiple staffing realignments are being proposed during this update to better align staffing with workload and ensure departments have the appropriate staffing structure. These adjustments improve organizational efficiency, ensure appropriate classificati on based on workload and responsibilities, and support service delivery without increasing overall budgetary costs. The totality of the recommended staffing changes has been analyzed for financial impact, and the overall effect is net -neutral. Any reclassification costs are offset by corresponding downgrades or reductions, resulting in no increase to the FY 2027 budget. Please refer to the table below for summary of changes.
Action Department Description
Downgrade Police Police Department Records Assistant II to Records Assistant I ($7,361) Upgrade Police Police Property Specialist I to Property Specialist II $8,120 Extend Police Extend Limited Term Sergeant – Hold 2 Police Officer Vacant - Change Police Crime Prevention Specialist to RTIC Operator - Downgrade HR Admin Tech Lead to Office Specialist ($15,357) Downgrade HR HR Analyst I to HR Tech III ($23,692)
Upgrade HR HR Analyst I to HR Analyst II $8,559
Upgrade HR HR Tech I to HR Tech II $6,067
Upgrade HR (2) HR Tech II to HR Tech III $14,628
Upgrade
Public
Works
Management Analyst Senior to Administrative Division
Manager
$10,295
Upgrade
Finance Budget Officer to Deputy Finance Director – Financial Services Manager held at Accountant II
($1,907)
Total Savings ($648)
In addition to the realignments above, the Fire Department is requesting the extension of the limited term battalion chief through December 31, 2026, due to the delays of the Solano County Request for Proposals ( RFP) process related to the medical transport rights in the County. The estimated additional cost is $178,000 ($115,500 General Fund, $62,500 Opioid Settlement Funds).
Other Funds
Other major funds will also be addressed in this session including Housing Fun ds, Transit, Golf and Water. Highlighting each fund’s challenges and FY 2027 impacts.
FINANCIAL IMPACT
Based on feedback will be presented at budget adoption.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
N/A
ALTERNATIVE ACTION
N/A
COORDINATED WITH
N/A
STAFF CONTACT
John Furtado, Director of Finance
(707) 428-7629
[email protected]
ATTACHMENTS
N/A