Fremont City Council Meeting: 05/12/26 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Budget
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5719) DOC ID: 5719
Updated: 5/8/2026 2:37 PM by Dina Lewis Page 1
FY 2026/27 Proposed Operating Budget - Presentation of Fiscal Year 2026/27 Proposed Operating Budget for the City of Fremont
Contact Persons:
Name: David Persselin
Title: Finance Director
Div/Dept: Finance Department
Phone: 510-494-4631
E-Mail: [email protected]
Executive Summary: The FY 2026/27 Proposed Operating Budget has been developed and is presented for the City Council’s review and comment.
Public hearings on the proposed budget are scheduled for June 2 and June 9, 2026, with adoption anticipated at the conclusion of the second public hearing.
Background: This proposed budget incorporates the City Council’s and community’s highest priorities by maintaining funding for economic development, reducing homelessness, and ensuring public safety. Consistent with the City Council’s foundational principal of fiscal sustainability, General Fund budgeted expenditures for the coming year have been limited to fit within the projected ongoing resources without the use of the Budget Uncertainty Reserve.
Discussion/Analysis:
Fiscal Year 2026/27 Proposed Operating Budget
General Fund budgeted ongoing resources of $291.0 million will support total budgeted expenditures of $289.1 million. Reflecting anticipated modest growth in the local economy, ongoing General Fund resources are projected to increase by 3.0% in FY 2026/27.
Although projected revenue growth is sufficient to maintain staffing and services at their current levels, it does not provide capacity to restore the $3.2 million of ongoing maintenance support that was eliminated to balance the FY 2025/26 adopted budget or the $3.1 million of ongoing personnel, supplies, and services reductions that were needed to rebalance the FY 2025/26 budget after labor negotiations concluded.
Council Staff Report (ID # 5719) Meeting of May 12, 2026 Updated: 5/8/2026 2:37 PM by Dina Lewis Page 2
The proposed budget maintains the City Council’s long-time funding priorities by allocating 87% of the budget to direct costs for public safety and maintenance. Basic City services, such as police, fire, and maintenance, are labor-intensive. Consequently, the City’s budget is largely driven by labor-related costs, including salaries, retirement system contributions, and health benefits. As the City is currently engaged in a collective bargaining process with its employee groups, the FY 2026/27 proposed budget includes a placeholder salary adjustment of 2.0%.
General Fund Reserves
The FY 2026/27 Proposed Operating Budget maintains the General Fund Contingency Reserve at 16.7% of budgeted expenditures and transfers out, or $48.3 million, a level consistent with City Council policy and the recommended practice of the Government Finance Officers Association of the United States and Canada. The General Fund Budget Uncertainty Reserve is projected to end FY 2025/26 at $4.3 million.
Fiscal Impact: The City Council is not being asked to take action tonight on the FY 2026/27 Proposed Operating Budget other than to provide comments to staff. An initial public hearing will be held on June 2, 2026, with a second public hearing and adoption of the budget scheduled for June 9, 2026.
Environmental Review: This agenda item is not subject to the requirements of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15378 as it is not defined as a “project.” Link: The FY 2026/27 Proposed Operating Budget is posted on the City’s website at
https://www.fremont.gov/government/departments/finance/financial- reports.
ATTACHMENTS:
• 2026-27 Proposed Budget Presentation - 2026-05-12
Recommendation: Accept staff’s budget presentation and provide comments.