City Council
Budget Work Session
May 12, 2026
Work Session Agenda
1. Budget Context
2. Recap and Updates since February 28th Budget Work
Session
3. Recommended FY27 Budget
4. Future Budget Considerations
5. Departmental Considerations, Service Impacts and Goals
6. Next Steps
Welcome and
Public Comment
(4:30 - 4:40 PM)
Budget Context
(4:40 - 5:00 PM)
Strategic
Roadmap
Priorities
Highly Ranked FY26 Strategic Projects
Create a citywide tree inventory and database
Enhance Community Safety
Update and train on the City’s Community Resilience Plan, with the goal of being a model of resiliency Using the organizational assessment of the Police Department, analyze police beats to optimize service levels Grow the Economy
Activate Cinema Place and continue the property management strategy Bring zoning amendments to remove barriers for businesses, allow popups, and allow appropriate commercial uses in residential districts Invest in Infrastructure
Begin construction of La Vista Park
Evaluate safety enhancements for the Downtown Loop
Continue implementation of “A Bench for Every Stop” project Preserve, Protect & Produce Housing for All
Engage with Alameda County stakeholder to secure Measure W dollars to support the response to homelessness in Hayward Support development of and ensure safe community integration of St. Regis Behavioral Health Campus Strengthen Organizational Health
Bring a revised budget in the fall and mid-year budget review, with strategies to advance fiscal solvency Implement the interdepartmental assessment of Access Hayward to enhance effectiveness and increase transparency Champion Climate Resilience
Implement bike distribution program with the goal of increasing bike access and usage
Resident Satisfaction Survey
• Who: Random sample of 1,320 residents 18+ between March 29 and April 9, 2025, interviewed in English and Spanish by phone and online. • Trend: Overall satisfaction with quality of life was at highest point in more than a decade.
• Greatest concerns: (1) Cost of housing, (2) Homelessness, (3) Crime, (4) Traffic congestion on local streets, (5) Potholes and street maintenance, and (6) Litter and graffiti.
• Service priorities: (1) Fast emergency response, (2) Safe neighborhoods, (3) Safe and well-maintained streets and sidewalks, (4) Healthy local businesses that stay in Hayward (5) A clean and well-maintained city, and (6) Adequate preparation for disasters such as wildfires and earthquakes. • Declining Real Estate Market – caused a decline in market related tax revenues which stagnated at <1% on average per year over the last three years and failed to match increasing salary and benefit costs
• Rising Personnel Costs – CalPERS pension rates, retiree health obligations, and negotiated COLAs continue to outpace revenue growth; entered into labor contracts misaligned with market and fiscal realities.
• ARPA Expiration - Increased staffing and programs dependent on one-time ARPA and grant funding
• Did NOT
Adhere to Financial Best Practices - maintaining realistic financial projections; budgeting accurately for overtime, contract increases, and leave payouts; using salary savings as a “crutch, ” and purchasing a risky real estate asset budgeted as a non-liquid reserve • Experienced leadership transitions and dilution of authority and responsibility RESULT: Exceeded FY24-25 General Fund budget by $30 million (15% of revenues) and depleted all General Fund cash reserves and continued structural deficits in excess of $30 million
What Is Causing Hayward’s Fiscal Challenges?
Costs Significantly Outpaced Revenue Growth
Reference Line 80% Ongoing Revenue
-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
Forecasted YearsAll General Fund Expenses
Ongoing Revenues (excludes short-term and one-time sources) Salary and Benefit Costs (net staffing charge outs)
Reference Line 80% Ongoing Revenue
For reference: Same chart with hypothetical 4% annual revenue growth from FY24 – FY30, which is the average growth of the previous 10 years -
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30
Forecasted YearsAll General Fund Expenses
Ongoing Revenues (excludes short-term and one-time sources) Salary and Benefit Costs (net staffing charge outs)
Property &
Sales Tax
Growth
Rates
City of Hayward · FY2018–FY2026
PROP TAX RANGE
+3.4% to +8.6%
SALES TAX RANGE
-11.0% to +20.4%
FY26* SALES TAX
-11.0%
Largest single-year decline
in the 10-year record
* FY26 is the adopted budget.
All prior years are actuals.
Property tax growth is stagnate, while sales tax growth is volatile -14
-9
-4
1 6
11 16
21 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26*
Property Tax Sales Tax
Year-over-year growth
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26*
Prop
Tax
+8.6% +6.3% +7.3% +4.7% +3.8% +7.8% +7.2% +3.4% +4.1%
Sales
Tax
-4.2% +7.9% +10.2% +1.0% +9.9% +0.1% +20.4% +0.8% -11.0% Growth shading: ≥8% 4–8% 0–4% Neg.
Regional Bay
Area Budget
Crisis
BAY AREA CITIES
REPORTING DEFICITS
6+
ROOT CAUSE
Structural
Costs outpace revenue growth
across the entire region
Sources: City adopted budgets &
council reports (FY2025-26).
Oakland: General Purpose Fund.
San Jose: City Manager mid-year
report (Feb 2026). Palo Alto: Proposed Budget (May 2026).
Hayward: before budget actions.
FY2025-26 General Fund deficit as % of GF expenditures
5.1%
5.5%
9.4%
11.4%
11.8%
16.4%
0 2 4 6 8 10 12 14 16 18 20
Palo Alto (~$17M)
San Jose (~$60M)
Berkeley (~$29M)
Hayward ($26.4M)
Antioch (~$12.7M)
Oakland (~$129M)
Deficit figures represent structural gaps before budget actions. Oakland uses General Purpose Fund (equivalent to GF). Antioch from FY2025-26 Adopted Budget. San Jose from City Manager mid-year report (Feb 2026). Berkeley from City of Berkeley budget proposal (Apr 2026).
Key
Budget
Lessons
Learned
01. 02.
Adhere to Financial Best Practices
• Accurate baseline financial projections grounded in market and financial realities
• Appropriate use of one-time and ongoing funds
• Appropriate budgeting of over-time, salary savings, and realistic revenue estimates
• Appropriate accounting of restricted funds and reserves (i.e., cinema place)
• Strengthen internal monitoring and controls
Improve Transparency and Accountability
• Regularly share and analyze updated projections and actuals internally and externally
• Establish and adhere to financial policies grounded in financial best practices
• Hold each other and our colleagues accountable at all levels of the organization
• Create a culture of collaboration, transparency and “see something, say something”
Key
Budget
Lessons
Learned
(cont.)
03. Practice Strong Leadership at All Levels
• Raise and vocalize issues and concerns with Council, staff, labor partners and community
• Attract, retain and train qualified staff
• Be prepared to make difficult or
unpopular recommendations grounded in financial realities
04. Financially Constrain Labor Negotiations and
Contracts
• Educate Council, negotiators and labor partners on current and future market and financial realities
• Institute an iterative process with Council
and Finance Department regarding cost of proposals
from the beginning to end of negotiations
• Establish consistent salary survey and equity adjustment methodologies grounded in market realities and Hayward ‘s financial situation that are equitable among bargaining groups • Consider risk sharing measures
• Workforce Reductions – overall reduction of approx. 15% • Strong vacancy management
• Voluntary separation program
• Layoffs and other terminations
• Use of Fund Balances – used balances established for
capital, rainy day, and longer-term liabilities
• OPEB Trust
• Measure C
• Worker's Compensation Fund
• Concession Bargaining – Successful concessions with
public safety, Council, and unrepresented groups
• Temporary reductions in HFD minimum staffing; shift changes for HPD; and furloughs and pay reductions for Council and unrepresented groups How Did We Close the Gap this Year?
Ongoing
One-Time
Ongoing
One-Time
&
• Other Cost Saving Measures – employed numerous other cost saving measures
• Limiting non-essential travel
• Unspent fund balances from CIP and Internal Service funds • Review and cancellation of non-essential contracts
• Reductions of service and supply budgets
• Business license tax audit
• Actively partnering with HARD for community events and discontinued event spending
How Did We Close the Gap this Year? (cont.)
Ongoing
One-Time
&
Recap and Updates since
February 28th
Budget Work Session
(5:00 - 5:15 PM)
February 28th Budget Work Session:
Base Financial Forecast
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Property Tax $77,458,791 $79,474,678 $82,198,193 $85,031,671 $87,979,643 Sales Tax $47,559,300 $46,474,500 $46,621,319 $47,715,154 $48,718,210 Utility Users Tax $25,000,000 $27,654,080 $28,466,428 $29,666,401 $30,947,188 Other Revenue $59,996,909 $59,803,400 $60,401,928 $61,011,224 $61,631,505 Transfers In $23,237,000 $4,490,959 $4,564,778 $4,640,073 $4,716,875 Revenue Total $233,252,024 $ 217,897,617 $222,252,646 $228,064,523 $233,790,273 Salaries & Benefits $184,505,500 $197,349,821 $217,390,307 $223,662,767 $228,774,500 Other Expenses $48,746,500 $53,136,048 $54,890,631 $56,705,577 $58,583,035 Expenses Total $233,252,000 $250,485,868 $263,956,988 $271,954,592 $278,856,982 Surplus/(Shortfall) $0 ($32,588,251) ($41,632,211) ($43,739,817) ($44,628,831) Why Does there Continue to Be a
Structural Deficit?
• Slowed growth in property and other tax revenue and reductions in sales tax and property transfer tax revenues
• Baseline revenue excludes temporary or one-time funds used last fiscal year, including Measure C and OPEB Trust transfers • Cost of living adjustments in closed employee contracts • Significant increases in CalPERS retirement costs and continued payment of unfunded liability associated with previous, larger workforce
• Increases in health care, maintenance and utility costs • Leave payout and special pay expenses previously covered through salary savings
• Include revenue items that are likely, conservative and not dependent on voter approval, plus proactively pursue a “match neighbor” business license tax measure in November 2026, implement enforcement of short-term rental ban on a pilot basis, and do not implement an EMS fee at this point • Use short-term funding again next fiscal year (i.e., Measure C and OPEB Trust, etc.) until there is greater clarity on the success of the business license modernization tax measure, recovery of real estate market and associated property tax growth trend, and extent of revenue from data centers • Assume cost saving measures that are likely to occur and minimize severe service impacts; avoid across-the-board cuts for now; and pursue concession bargaining to help close the fiscal cap
• Allow cost-neutral departmental restructuring of personnel for operational effectiveness to account for new reality of reduced staffing Approach to Recommended FY26/27 General Fund Budget
Budget Updates Since February 28th
• Business License Tax Modernization Measure - Actively pursuing a business license tax modernization measure in November 2026 with Council approval targeted for June 2, anticipated to increase General Fund revenues by $11 million annually, if approved by voters • Concession Bargaining - Engaged in concession bargaining with all labor groups, which led to Council approving concessions with six groups, unrepresented and Council appointed officers on April 21 for COLA deferrals, reductions and other overtime cost saving measures, resulting in $7.5 million in additional savings
• Salary and Benefit Projections for FY26 and FY27 - Monitored actual payrolls associated with new reduced workforce this FY , which led to revising budget projections for this FY and next with significantly increased salary and benefit estimates to account for continued payment of unfunded liabilities for the previous larger workforce and unbudgeted special pays, education incentives and leave payouts previously covered by salary savings, resulting in implementing immediate cost saving for this FY and increased expense projections of approximately $10 million for next FY
Budget Updates Since February 28th (cont.)
• Updated Fee Schedule – Council adopted an updated Master Fee Schedule on April 21, which will help offset the cost of increased employee compensation • Streaming and Other Revenue Measures – Council adopted Utility User Tax (UUT) ordinance changes to strengthen collection of streaming revenues, outstanding litigation resolved in favor of cities, and letters sent to all streaming providers; increased cannabis revenue from new dispensary is on hold due to ongoing CEQA litigation • Sale of City Property - Actively marketing the sale of key City properties to restore reserves and reduce expenses with negotiation updates planned for closed session in June and August Recommended
FY27 Budget
(5:15 - 5:30 PM)
Recommended FY27 General Fund Budget
• Overall, proposed $249 million General Fund budget is balanced, but stretched and still heavily reliant on short-term funding and transfers from Measure C, OPEB Trust, Worker’s Compensation and eligible Grant Funds • Structural deficit of approximately $30 million remains until new revenues are approved, revenue growth recovers, and other cost control measures are implemented
• Includes updated salary and benefits based on actuals from this fiscal year and concessions from labor partners (i.e., COLA deferrals and overtime reductions)
• Excludes potential revenue from the proposed business license tax measure since it is dependent on voter approval
Recommended FY27 General Fund Budget
* Salaries & Benefits are 96% of all ongoing revenues excluding short-term/one-time revenue (in 1,000s) FY 2027 Proposed Percent of Total
Property Tax $81,090 32.6%
Sales Tax $46,539 18.7%
Utility Users Tax $26,072 10.5%
Other Revenue $64,083 25.8%
Subtotal 217,785 87.6%
Transfers In - Ongoing $4,010 1.6%
Transfers In - Onetime $26,788 10.8%
Total Revenue 248,583 100.0%
Salaries 121,791 49.1%
Benefits 89,102 35.8%
Staffing Charge Outs (8,560)
Subtotal 202,333 81.4%
Other Expenses 46,250 18.6%
Total Expenses 248,583 100.0%
Recommended FY27 General Fund Revenues
Recommended FY27 General Fund Expenses
by Department
Future Budget
Considerations
(5:30 - 6:00 PM)
• After the election, propose holding an early December 2026 Budget Work Session to discuss results of business license tax (BLT) modernization measure and year-to-date monitoring of actuals • If passes, the new BLT revenue would replace some one-time funding sources with a permanent, ongoing revenue stream — directly reducing the structural gap in FY28 by approximately $11 million • Recommend using new BLT revenue in FY27 to replenish the General Fund reserve to a 4.5% level that can be used as a contingency throughout fiscal year and beyond
Approach to Business License Tax
Modernization Measure Revenue in FY27
• Revenues:
• Business license tax modernization revenue increase of $11 million • Utility user tax revenue increase related to data centers and streaming of $4.7 million • Continued use of Measure C and OPEB Trust of $13 million through FY30 and the end of the current public safety contracts
• Expenses:
• Assumes some level of fire and police overtime reductions continue • Includes contractual COLAs and 2% increases if there is no contractually specified COLA • Continue all current vacancy savings
• Contribute $6.1 million to worker’s compensation in FY28 with modest annual growth • Annual increases in other expenses categories varies from 2-4% Updated Budget Forecast FY28 and
Beyond: Revenue & Expense Assumptions
UPDATED Financial Forecast
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Property Tax 79,500,000 81,090,000 82,711,800 84,366,036 86,053,357 Sales Tax 47,599,300 46,539,200 47,469,984 48,419,384 49,387,771 Utility Users Tax 24,844,001 26,072,478 26,577,656 27,922,809 29,294,865 Other Revenue 59,413,297 61,083,657 75,504,137 75,447,475 76,417,048 Subtotal 211,356,598 214,785,335 232,263,577 236,155,704 241,153,041 Transfers In - Ongoing 4,418,587 4,010,277 4,010,297 4,010,297 4,010,297 Short-Term or One-Time 25,487,036 29,787,735 13,000,000 13,000,000 13,000,000 Total Revenue 241,262,221 248,583,347 249,273,874 253,166,001 258,163,338 Salaries & Benefits 205,280,514 210,892,594 219,449,104 226,156,094 232,359,989 Other Expenses 35,981,707 37,690,753 36,867,606 37,970,967 38,951,885 Expenses Total 241,262,221 248,583,347 256,316,710 264,127,061 271,311,875 Surplus/(Shortfall) $0 $0 (7,042,836) (10,961,060) (13,148,536) • Revenues likely to increase by $16 million in FY28, assuming revenues from a successful business license tax modernization measure, estimated UUT increases from data centers and streaming companies, and increased cannabis revenue from a new dispensary
• In FY28, deficit is reduced to approximately $7 million, but assumes continued use of $13 million in short-term revenue from Measure C and OPEB Trust
• Reduction of future deficits depend on maintaining Measure C funding, economic recovery and related growth in tax revenues, and/or additional cost saving measures (i.e., concessions, contract negotiations, and/or deeper cuts) that result in structural, ongoing changes to the budget Considerations for Future Budgets
Future Budget Priorities
• Building Reserves: As the City depleted all of its General Fund reserves last fiscal year, there is a need to restore reserves to the recommended 20% of its annual operating budget (or approximately $45 million), including in part from the sale of City properties and other one-time measures or windfall revenues. • Measure C Funded Priority Capital Projects: The recently approved Measure K1 extended the Measure C sales tax measure with the goal of building a new modern police building, corporation yard, Fire Station 9, Weekes Branch and other capital needs, which requires that sufficient Measure C/K1 funding is available to fund ongoing debt service and not just used to balance the City’s General Fund deficit. • Restoring Negative Cash Fund Balances: There are several funds that are currently running negative cash balances in the range of $1 million to over $16 million, such as General Liability and Facilities funds that need to be restored, most likely with one-time funding.
• Homelessness. Applying for a Pro-Housing grant for up to $1.2 million to help provide ongoing support for homelessness services and relevant County funding opportunities. • Tree Planting. Exploring an Urban Greening grant to help off-set costs for planting trees in underserved areas; the program has $46M available in round 1. • Fireworks and Flavored Tobacco Enforcement. Obtained a State grant for flavored tobacco enforcement for $153K over three years and pursuing a State grant to bolster seasonal fireworks enforcement efforts with $3.6M in annual funding available. • Fire Suppression. Exploring a FEMA SAFER Grant to restore Engine 11 staffing: 75% of firefighter costs in Years 1–2 and 35% in Year 3 with matching funds potentially impacting General Fund, depending on concessions.
• State and Federal Earmarks and Other Grants: Partnership with lobbyists to secure grants to enhance core services from State and federal earmarks, potentially, including LINK, drones as first responders, safe routes to school, The Stack Center Phase II, literacy/ESL programs, cultural programming, and new book purchases at the Library.
Pursuing Additional Funding
• Property Transfer Tax Reductions (#25-0006A1) — November 2026 initiative would reduce local real estate transfer taxes to the City to $0.55/$1,000 (currently $8.50/$1,000), threatening Hayward's $11 million annual Real Property Transfer Tax revenue. (A competing legislative amendment (ACA 13) would require the initiative to pass by two-thirds.) • Pension Legislation (AB 1383) – Bill currently in the State Senate would allow negotiated enhanced CalPERS retirement formulas for public safety employees, including lower retirement age and higher benefit multipliers – potentially increasing pension costs. • Senior Property Tax Exemption (#25-0035) — potential November 2026 initiative would fully exempt primary residences from property taxes for homeowners age 60+, with estimated local revenue losses of $10-16M annually. (Signature deadline for November is June 25, 2026.) • “Fix Prop 19” (#25-0017) – potential November 2026 would reinstate inherited property transfer rules without reassessment to market value, reducing local government revenue by an estimated $1-2B annually statewide and gradually eroding Hayward's property tax base.
Future Budget Risks
Dinner
We will return at 6:30 pm
Departmental Impacts
& Considerations
(6:30 - 8:30 PM: 15 Mins per Department)
Impact to Core Services
• Over the past two years, the
City has eliminated general-
fund supported special
initiatives and reduced or
currently held vacant 90
FTEs
• Over the past year, the City
has begun to reduce core
services to address fiscal
challenges
• Departments will present
on service models and
impacts in more detail
Examples of Impacted Services To Date
• Reduced library hours and programs
• Elimination of community grants
• Reduction of two fire companies
• Longer response time for illegal dumping removal
• Longer response time for permit review and
inspections
Police
Department
• Staffing adjustments and overtime reductions: While changes to staff deployment, shift schedules, and overtime have resulted in financial savings, capacity for conducting follow-up investigations, community engagement, and training sworn and professional staff have been reduced.
• Recruitment pipeline is open, but vacancies remain: Recruitment for sworn and critical dispatcher positions continue; however, anticipated staff separations could quickly widen the vacancy gap, impacting service levels and response times. • Vacancy management could delay promotions: There is a critical need to promote for succession planning based on anticipated retirements, which could be delayed by vacancy management. • Organizational need to leverage technology solutions: Strategic technologies help maintain and improve operational efficiency, safety, and crime reduction outcomes. • Crime reduced despite financial and operational challenges:There has been a 10.46% reduction in crime in the past 365 days (data pulled May 4th).
• 23% reduction in homicides, 20% reduction in burglaries, 35% reduction in stolen vehicles, and 28% reduction in robberies
Considerations and Service Impacts
• Achieve annual CALEA accreditation: Ensures HPD continues to meet national standards and best practices in the delivery of services.
• Realign Jail operations: The realignment of jail operations, including a partial closure during non-peak hours, will allow for the repurposing of Community Service Officers (CSOs) to other necessary programs without overall workforce reductions. • Implement a parking enforcement program: Allows HPD to repurpose CSOs from the Jail and respond to chronic community concerns regarding parking, including in the downtown and Tennyson corridors. The program is estimated to generate $800,000 in annual revenue and will offset associated staff costs.
• Supplement existing UAS program with a Drone as First Responder (DFR) concept: While adhering to established policies and guidelines around UAS usage and community privacy, this program will allow HPD to repurpose CSOs from the Jail and maintain or improve operational efficiency, including response times, situational awareness, and community and officer safety. Also, acts as an operational resource for other City departments.
Key Goals for FY 2027
Public Works
& Utilities
• Cost Recovery: Approximately 90 to 95% of PW&U’s funding sources are from various Enterprise Funds or Special Revenue Funds, which are non-General Fund. • Federal WIFIA Loan Delay: Significant delay in securing a $244 million Water Infrastructure Finance and Innovation Act (WIFIA) loan which has caused a delay in proceeding with the required construction of Water Resource Recovery Facility (WRRF) Improvements Phase 2; now also pursuing a $50 million loan from the State Revolving Fund (SRF).
• La Vista Park Value-Engineering: Value-engineering associated with La Vista Park construction will allow the City to reallocate approximately $5 million in Measure C funding back to the City for additional fund balance.
• Rapid Response to Pedestrian Fatalities: Recent pedestrian fatalities spurred a concerted staff focus and targeted approach to implementing immediate safety enhancements, including near-term quick-build improvements at the top 10 High-Injury Network intersections.
Considerations and Service Impacts
• Appropriate Tracking: Track charges to ensure activities are appropriately charged to special revenue, CIP , or development projects to minimize fiscal impacts to General Fund. • Public Safety Center: Initiate the design, land use entitlement and possibly the developer solicitation process for Public Safety Center Project.
• Skywest: Proceed with transferring the western portion of Skywest property to HARD for development of park and open space.
• Safe Street Planning: Advance the Safe Streets Hayward (A St., B St., & Tennyson Rd.) and Safe Streets Downtown (Downtown Loop) Projects, including prioritizing design and construction funding for Phase 1 of the Tennyson Corridor safety improvements. • Compost Hub: Complete the design and construction of the Compost Hub at the Hayward Community Garden.
• WRRF Project: Pending WIFIA funding, begin construction of WRRF Improvements Ph 2. • Pavement Condition Index (PCI): Strive towards achieving Council goal of a PCI of 80.
Key Goals for FY 2027
Fire
Department
• Reduced response capacity from staffing reductions: Maintaining response times through strategic response adjustments, training schedule changes, and streetlight pre-emption repairs, while monitoring reduced redundancy and simultaneous-call demand.
• Reduced costs with impacts to training: Payroll was reduced by $6.8M and overtime by $2.6M; however, training cuts affect specialized training in wildland, technical rescue, and succession planning.
• Fire Prevention capacity was initially reduced, but core work is on schedule:
Staff reorganized workflows, updated fees, closed process gaps, and increased outside plan check to keep inspections and plan reviews current. • Community outreach and public education have been reduced: To preserve Emergency Management capacity, the Public Education Officer position was reassigned to that function, reducing prevention education, community engagement, and public outreach.
Considerations and Service Impacts:
• Modernize technology to improve efficiency and data quality: Adopt new technologies to improve regional interoperability, analytics, and rapid disaster damage assessment (i.e., Tablet Command, ImageTrend, and Quick Capture). • Complete accreditation, audits, and department assessments: Priorities include the HazMat audit, State Fire Training academy accreditation, ISO assessment, Standards of Cover and Community Risk Assessment. • Strengthen training, succession planning, and operational readiness:
More than 30 potential retirements over the next few years could affect key operational and leadership positions, making leadership development and readiness planning a priority.
Key Goals for FY 2027:
Maintenance
Services
• Cleanup Timelines: Streets Division's response time for illegal dumping, graffiti removal, and encampment cleanup requests extended from within 24-48 hours to up to 72-96 hours.
• Tree Planting Goal: Landscape Division will continue expanding the City's urban forest but requires decreasing annual planting goal from 1,500 to 1,000 trees.
• Facility Response Times: Facilities Division's response time for facility maintenance requests will be extended from 72-96 hours to up to 120 hours. • Preventative Maintenance Schedules: Fleet Division will prioritize preventative maintenance schedules for Public Safety fleet, "white" fleet will require a longer turnaround time.
Considerations and Service Impacts:
• Bike Lane Sweeping Program: Launch a citywide protected bike lane sweeping program utilizing a compact street sweeper.
• Tree Management Software: Implement the City's first tree management software, which will be the backbone of the tree maintenance program.
• Energy Conservation Project: Complete the Energy Conservation Project and implement a facilities work order software solution. • Fleet Lift Replacement Plan: Begin the Fleet Lift Replacement Plan, a multi-year plan to replace six (6) vehicle/equipment lifts that are out of compliance and at the end of their useful life.
Key Goals for FY 2027
Development
Services
• Supplies and Service Reductions: Supplies and Services budget reduced by 40% over last few FY impacting nimble response.
• Strategic Deployment of Limited Staff Resources: Vacancies and impending retirements in key positions, requires strategic prioritization of workload.
• Filling Key Cost-Recovered Positions: Propose filling State-mandated Building Official position and vacant Code Enforcement Manager plus adding a new Code Enforcement Inspector based on revenue analysis that revealed high percentage of cost recovery in both Code Enforcement and Building Divisions, ranging from 75% to 100%.
• Implementing Efficiency Measures: Public service efficiency measures explored for various processes including Permit Center, Rental Unit Invoicing, and Code Enforcement Violation Notices.
Considerations and Service Impacts:
• Focus on Core Services and Functions: In part, by building-out DSD activity dashboards with IT to gain key data to strategically target resources and identify opportunities for improvement.
• Rent Registry: Exploration of initial phase of Rental Registry implementation. • BART TOD Partnership: Ongoing collaboration with BART related to TOD development at the downtown BART station.
• Hayward Business Friendly Ordinance Follow-Up: Items include Accessory Commercial Units and definitions for last mile delivery and truck terminal uses. • Smoke Free Multi-Family Housing Ordinance: Recommend adoption of a new ordinance with partnership from Alameda County Health for initial education and low-level enforcement.
Key Goals for FY 2027:
Public
Library
• Loss of Funding and Workforce Reductions: Impact of General Fund budget cuts, compounded by loss of Hayward Promise Neighborhood funds, and English as a Second Language (ESL) funds from the State Library, and reduced funding from The Friends of the Library Group and Hayward Literacy Plus Council, has resulted in a significant loss of funding for the Library of approximately $585,000 annually, as well as full-time and part-time workforce reductions.
• Service Impacts: Loss of funding has resulted in a number of service impacts:
• Reduced open hours from 6 to 5 days a week (48 hrs to 39 hrs/wk) • Bookmobile services and outreach discontinued
• Repeated unscheduled closures of the Makerspace due to staff shortages • Most public services staff are working three Saturdays a month on a regular basis • Loss of highly used and popular databases/streaming services like Hoopla and Kanopy
Considerations and Service Impacts:
• Weekes Library Branch Utilization: Increase library use at the Weekes branch.
• Literacy Programs: Maintain ESL and Adult Literacy Services at the current level.
• Community Programs: Maintain community programs
(storytimes, special events, etc.) at current levels (except Trunk or Treat).
• Private Fundraising: Support the Friends of the Library and Hayward Literacy Plus Council to strengthen their fundraising.
Key Goals for FY 2027:
Information Technology,
Finance, &
Human Resources
• Information Technology (IT): Loss of Support Technician has resulted in elimination of Friday in-person TechTeam support at City Hall and higher ticket resolution times.
• Finance: Loss of Deputy Director and Senior Accountant have resulted in ongoing delays in completing FY 2024-25 Annual Financial Report (ACFR), although created an opportunity to provide stretch assignments to staff and build future staff capacity.
• Human Resources: Loss of Deputy Director, one Human Resources Manager, and two Human Resource Analysts have resulted in delayed special projects and response times.
Considerations and Service Impacts:
• Information Technology: Build and promote IT’s new Innovation Assistance Program to City departments to improve efficiencies and effectiveness via technological enhancements.
• Finance: Develop improved budget, payroll, and accounting processes potentially using IT Innovation Assistance Program. • Human Resources: Reevaluate service offerings to streamline workflows and processes, and improve customer service.
Key Goals for FY 2027:
City Manager,
City Attorney &
City Clerk
• City Manager: Restructuring of community services division and administrative functions due to workforce reductions and loss of community agency funding.
• City Attorney: Minimizing insurance premium increases through effective risk management strategies in key exposure areas; and mobilizing human resources across department lines (i.e., 0.5 FTE shared position with Finance) to offset reductions in force and loss of positions.
• City Clerk: Sustain Passport Program operations and revenue generation with limited staffing by leveraging 0.20 FTE shared position with City Manager’s Office to support operational efficiencies.
Considerations and Service Impacts:
• City Manager: Manage placement of the Business License Tax Modernization measure on the November 2026 ballot, if approved by Council, and oversee implementation, if approved by voters. • City Attorney: Maximize staff attorney ability to defend claims/lawsuits while reducing reliance on outside counsel. • City Clerk: Deliver a compliant by-district municipal election by executing voter outreach, coordination, and administration aligned with election laws and state requirements.
Key Goals for FY 2027:
Next Steps
Next Steps
• June 2026 – Recommend City Council approval of: (1) the City’s Operating and Capital Improvement Program budgets, and (2) placement of a business license tax modernization measure on the ballot
• November 2026 – Election held on City’s business license tax modernization measure
• December 2026 – Hold a Council budget work session based on results of the election and year-to-date monitoring of actual expenditures
• February/March 2027 – Hold a Council work session on updating the City’s Strategic Roadmap in order to calibrate workload with most recent budget and workforce projections
Background Slide
FY24 – FY27 Comparison: City reduced expenses and used short- term funding to address stagnate revenues
Dollars in 1,000s FY 2024
Actual
FY 2025
Actual
FY 2026
Estimated
FY 2027
Proposed
% Change
FY24 to FY27
% Change
FY25 to FY27
Property Tax 73,406 75,907 $79,500 $81,090 10% 7%
Sales Tax 53,034 53,476 $47,599 $46,539 (12%) (13%)
Utility Users Tax 24,453 23,101 $24,844 $26,072 7% 13%
Other Revenue 57,359 55,956 59,413 61,083 6% 9%
Subtotal 208,253 208,542 211,356 214,785 3% 3%
Transfers In - Ongoing 3,973 4,681 $4,418 $4,010 1% (14%) Short-Term or One-Time* 5,135 34,415 $25,487 $29,787 480% (13%) Total Revenue 217,361 247,773 241,262 248,583 14% 0%
Salaries 106,001 130,111 122,719 121,791 15% (6%)
Benefits 63,677 75,529 82,561 89,102 40% 17%
Other Expenses 47,683 42,093 35,981 37,690 (21%) (11%)
Total Expenses 217,361 247,773 241,261 248,583 14% 0%
*Includes use of reserves in FY24 and FY25