Annual Proposed BudgetFiscal Year (FY) 2026-27
City Council
May 12, 2026
1 Budget Discussion
2 Community Priorities Survey
The City conducted a Community Budget Priorities Survey in early 2026 to consider for future planning.
Residences emphasized the importance of Hercules remaining a safe and well-maintained place to live with essential services that residence depend on.
Key Community Priorities:
Maintaining long-term financial stability and accountability Retaining and attracting local businesses
Meeting water quality health standards
Maintaining fast 911 response times
3 Council’s FY 24-26 Strategic Goals
Goal #1: Advance the development of the Hercules Hub
Goal #2: Strengthen the city's fiscal sustainability
Goal #3: Enhance transparency and communication
Goal #4: Continue investing in a skilled and dedicated team at City Hall Goal #5: Strategically plan and fund major infrastructure projects Goal #6: Develop a comprehensive land-use strategy.
Goal #7: Formulate a detailed economic development strategy 4 Overall Assumptions Used(Baseline)
5 CalPERS Funding Ratio
6 Funding Ratio: 76%
Budget Requests and Financial Impact
7 General Fund Analysis
General Fund
Revenue Estimates
Expenditures Projections
Projected Net Annual Results
Five Year Forecast
8 General FundRevenue Estimates
9 General FundExpenditure ProjectionsBy Category
Salaries and benefits – accounts for 59% of total General Fund expenses.
The General Fund expenditures are projected to increase by about a $1 million or 5% compared to the prior fiscal year budget. 10 Salaries and Benefits
(Including Pension)
59%
General FundExpenditure ProjectionsBy Department/Programs 11 General FundProjected Annual Operating Results
12 General FundFive-Year Forecast
13 Non-General FundBudget Highlights
14 Sewer Enterprise FundBudget Highlights
The Sewer Enterprise Fund pays for the sewer system’s operations, maintenance, and capital improvement FY 26-27 operating budget is estimated to be:
$4.6 million in ongoing operating expenditures;
$2.1 million in debt service obligation; and
$3.2 in capital improvements projects
The City collects approximately $6 million a year in service charges from over 8,400 connection The City Council on July 22, 2025, adopted a resolution to increase sewer rates 15 Internal Service Funds (ISF)
16 Debt Service Obligations
17 Capital Improvement Projects (CIP)FY 26-27
18 Capital Improvement Projects (CIP)FY 26-27Funding Sources 19 Questions & Comments
20