January 27, 2026
Finance Department
DATE: January 27, 2026
TO: Mayor Martinez and Members of the City Council
FROM:
Emily Combs, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager
Antonio Banuelos, Accounting Manager
SUBJECT:
Fiscal Year 2025-26 Quarter 1 Budget Report
FINANCIAL IMPACT: There is no fiscal impact for receiving this item.
PREVIOUS COUNCIL
ACTION:
June 24, 2025
STATEMENT OF THE
ISSUE:
City staff are presenting the Fiscal Year 2025-26 Quarter 1 General Fund and Non-General Funds financial report
which covers financial activity from July 1, 2025, through September 30, 2025.
RECOMMENDED ACTION:
RECEIVE the Fiscal Year (FY) 2025-26 Quarter 1 (Q1)
report for the period of July 1, 2025, through September 30, 2025 – Finance Department (Emily Combs 510-620-
6790/Mubeen Qader 510-412-2077/Jerry Gurule 510-
620-6591).
DISCUSSION:
City staff prepare the quarterly budget report to monitor revenue and expenditures against the approved budget. The report provides City staff, the City Council, and the community with a clear view of financial performance against the approved budget. It promotes transparency, ensures accountability, and highlights variances that may require corrective action.
This report summarizes the City’s quarter 1 (Q1) operating revenue and expenditures for Fiscal Year (FY) 2025-26 which covers financial activity from July 1, 2025, through AGENDA
REPORT
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September 30, 2025. For the initial three months, the benchmark is 25 percent of the Adopted Budget, meaning revenues and expenditures are generally expected to align with this threshold. Variances can occur due to seasonal patterns in major resources.
For example, Business License Tax receipts are typically received in March and April in accordance with Measure U, while Property Tax payments are received from the County in two installments, one in December and another in April.
General Fund
General Fund Revenues
Revenue for Q1 of FY 2025-26 was $100.4 million, or 32.5 percent of the budgeted amount, exceeding the 25 percent threshold due to limited-term revenue received in July. Table 1 summarizes Q1 revenue budget to actuals. Details for major categories by department are in Attachment 1.
Table 1: General Fund Revenue, FY 2025-26, Quarter 1
GENERAL FUND
FY 2025-26
ORIGINAL
BUDGET
FY 2025-26
REVISED
BUDGET
YTD
ACTUALS
%
USED
PROPERTY TAXES 58,329,291 58,329,291 - 0.0% SALES & USE TAX 60,163,807 60,163,807 3,726,378 6.2% UTILITY USERS TAX 64,943,670 64,943,670 13,904,737 21.4% OTHER TAXES 28,399,659 28,399,659 7,923,279 27.9% LICENSES, PERMITS & FEES 17,274,036 17,274,036 1,153,542 6.7% FINES & FORFEITURES 200,000 200,000 145,761 72.9% INTEREST INCOME 3,030,545 3,030,545 761,966 25.1% CHARGES FOR SERVICES 3,724,495 3,724,495 1,343,291 36.1% OTHER REVENUE 50,167,500 50,167,500 50,043,446 99.8% RENTAL INCOME 791,157 791,157 214,194 27.1% INTERGOVERMENT STATE TAXES 150,000 150,000 177,196 118.1% STATE GRANT 180,000 180,000 251,492 139.7% OTHER GRANT 290,000 290,000 - 0.0% PROCEEDS FROM SALE PROPERTY 15,000 15,000 - 0.0% LOAN/BOND PROCEEDS 40,400 40,400 - 0.0% OPERATING TRANSFERS IN 20,853,959 20,853,959 20,774,429 99.6% TOTAL REVENUES 308,553,519 308,553,519 100,419,711 32.5%
At this early point in the fiscal year, it is too soon to determine whether adjustments to General Fund revenues will be required. City staff will continue to monitor revenues collections closely and expect to have a clearer assessment of local revenue trends by mid-year. Based on preliminary data from Q1 of FY 2025-26, most revenues sources are trending as expected or better.
Property Tax – The FY 2025-26 Adopted Budget estimated 4.1 percent growth in Assessed Valuation for Secured Property Taxes. However, Contra Costa County’s (County) 2025-2026 Assessment Roll, which was released in July 2025, indicates
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3.53 percent growth for Secured Property Taxes, representing a reduction of approximately $78,000. Other significant impacts include sale of properties and tax increment allocation. Successor Agency Surplus and Pass-through revenues to the General Fund have declined over the past two years following significant growth due to a decrease in assessed values within the former redevelopment project areas.
More accurate property tax revenue estimates will be available after the City receives the December payment from the County, which will guide any necessary mid-year adjustments. The City does not receive Property Taxes in Q1.
Sales & Use Tax – Sales & Use Tax revenues have demonstrated consistent growth over the last few years and this positive trend is projected to continue for through the remainder of the fiscal year. The updated forecast from the City’s financial consultants aligns with the FY 2025-26 Budget. Total Sales Tax collected through Q1 is $3.7 million, or 6.2 percent of the budgeted amount.
Utility Users Tax (UUT) – UUT, which applies to Cable Television, Gas and Electricity, and Telecommunications, is tracking above budgeted levels. City staff will continue to monitor UUT collections to determine if a mid-year adjustment is necessary. As of Q1, the total UUT collected is $13.9 million, or 21.4 percent of the budgeted amount.
Other Taxes - This category includes various taxes and franchise fees including the Transient Occupancy Fee (Hotel Tax) and Documentary Transfer Tax on property sales in Richmond. For Q1, total revenue received in this category is $7.9 million, or
27.9 percent of the budgeted amount. The largest component is the Documentary Transfer Tax, with $7.6 million collected in Q1. This revenue category is volatile and unpredictable, with significant month-to-month variations.
Licenses, Permits, & Fees – This category includes Business License Tax revenue.
As of Q1, total revenue received in this category is $1.2 million, or 6.7 percent of the budgeted amount. With the adoption of Measure U, all businesses have a December 31, license expiration date with due dates of March 1, for rental and April 1, for all other businesses. Most revenue will be received between January and April of 2025.
Interest Income – This category represents interest income earned on cash in the City’s bank accounts. Total interest earned through Q1 is $761,966, or 25.1 percent of the budgeted amount.
Charges for Services – This category includes various charges or fees for services to recover costs for fire prevention, Public Works, engineering, and passport services. As of Q1, total charges are $1.3 million, or 36.1 percent of the budgeted amount.
Other Revenue – This category includes limited-term revenue.
Intergovernmental State Taxes – This category includes Motor Vehicle Fees
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received from the State. Total receipts collected through Q1 are $177,196, or 118.1 percent of the budgeted amount.
State Grant – This category includes various grants received from the State. Total receipts collected through Q1 are $251,492, or 139.7 percent of the budgeted amount.
Operating Transfers In – Operating transfers are typically processed following adoption by City Council. As of Q1, total operating transfers are $20.8 million, or
99.6 percent of the budgeted amount.
General Fund Expenditures
Expenditures for Q1 of FY 2025-26 were $59.9 million, or 23.0 percent of the budgeted amount. Actuals are trending slightly below the approved budget without encumbrances; including encumbrances, the percentage utilized is 26.5 percent.
Encumbrances refer to funds reserved through purchase orders for specific operating expenditures, such as copier leases. Table 2 summarizes the Q1 expenditure budget to actuals. For details by department, see Attachment 1.
Table 2: General Fund Expenditure, FY2025-26, Quarter 1
GENERAL FUND
FY 2025-26
ORIGINAL
BUDGET
FY 2025-
26 REVISED
BUDGET
YTD
ACTUALS
ENCUMB.
% USED
W/O
ENCUMB.
% USED
W
ENCUMB.
SALARIES AND WAGES 96,762,515 96,664,929 24,125,261 - 25.0% 25.0% BENEFITs 74,157,128 74,264,514 18,408,573 - 24.8% 24.8% PROFESSIONAL & ADMINISTRATIVE 26,354,296 26,387,180 3,591,238 3,127,961 13.6% 25.5% OTHER OPERATING 9,511,051 9,474,227 1,128,780 3,235,357 11.9% 46.1% UTILITIES 7,265,830 7,274,370 1,550,807 1,390,818 21.3% 40.4% EQUIPMENT & CONTRACT SVCS 5,513,366 5,716,913 213,015 936,744 3.7% 20.1% PROVISN FOR INSURANCE 46,500 46,500 39,446 - 84.8% 84.8% COST POOL 21,145,184 21,145,184 7,877,863 - 37.3% 37.3% ASSET/CAPITAL OUTLAY 2,842,986 2,944,920 400,726 436,876 13.6% 28.4% DEBT SERVICE EXPENDITURE 775,647 775,647 - - 0.0% 0.0% A87 - COST PLAN REIMBS (3,362,171) (3,362,171) (874,738) - 26.0% 26.0% GRANT EXPENDITURES 34,497 34,497 - - 0.0% 0.0% OPERATING TRANSFERS OUT 19,006,690 19,006,690 3,439,157 - 18.1% 18.1% TOTAL EXPENSES 260,053,519 260,373,399 59,900,128 9,127,755 23.0% 26.5%
Salaries and Wages – includes base salaries for full-time and part-time staff, overtime, and other pay types. Actual expenditures total $24.1 million (25.0 percent of budget). Expenditures in this category are expected to increase in subsequent quarters due to City Council’s approval of successor Memoranda of Understanding (MOUs), which includes compensation increases for represented employees.
Benefits – includes medical, dental, workers compensation, CalPERS pension costs,
January 27, 2026
other post-employment benefits (OPEB), and other fringe benefits. Actual expenditures total $18.4 million (24.8 percent of budget).
Professional & Administrative Services – includes professional and consulting services, and contractual obligations, such as animal control and professional consulting services. Actual expenditures total $3.6 million (13.6 percent of budget) and is below the threshold. Factoring in purchase order encumbrances of $3.1 million, the total is $6.7 million (25.5 percent of budget).
Other Operating – includes copier leases, office supplies, and other items. Actual expenditures total $1.1 million (11.9 percent of budget). Factoring in purchase order encumbrances of $3.2 million, the total is $4.3 million (46.1 percent of budget).
Utilities – includes gas, electricity, water, refuse, telephone, and internet services.
Actual expenditures total $1.5 million (21.3 percent of budget). Factoring in purchase order encumbrances of $1.4 million, the total is $2.9 million (40.4 percent of budget).
Equipment & Contract Services – includes equipment and maintenance/repair services. Actual expenditures total $213,015 (3.7 percent of budget). Factoring in purchase order encumbrances of $936,744, the total is $1.1 million (20.1 percent of budget).
Provision for Insurance – includes insurance premiums for drone, fire apparatus, and fire boat Insurance. Actual expenditures total $39,446 (84.8 percent of budget).
Insurance premiums are due annually at the start of the fiscal year.
Cost Pool – includes the City’s general liability allocation, vehicle replacement program, and Civic Center allocation. Actual expenditures total $7.9 million (37.3 percent of budget). Cost Pool charges are allocated monthly through a journal entry transaction.
Asset/Capital Outlay – includes furniture replacement, computer replacement, radios and other small equipment. Actual expenditures total $400,726 (13.6 percent of budget). Factoring in purchase order encumbrances of $436,876, the total is $837,602 (28.4 percent of budget).
Debt Service – includes debt service for loans and bonds. All debt service payments are processed in the second and the fourth quarter of each fiscal year.
Cost Plan Reimbursement – reimburses departments in the General Fund for internal support services provided to other funds. Actual expenditures are shown as a credit in this category totaling $874,738 (26.0 percent of budget). Grant Expenditures – no expenditures in this category are due to timing on Office of Neighborhood Safety (ONS) Grants.
Operating Transfers Out – includes transfers out from the General Fund to non-
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general funds mostly for operating subsidies and a portion of debt service. Actual expenditures total $3.4 million (18.1 percent of budget).
Non-General Funds
Non-General Fund Revenues
Overall, 11.2 percent of non-general fund revenues have been collected and are trending as expected. The timing of receipts varies based on the source of funding. For example, grant funds are usually received after expenditures are incurred and reimbursements are requested to grantors. Table 3 summarizes the revenue budget to actuals for non-general funds. For details by individual fund, see Attachment 2.
Table 3: Non-General Fund Revenues, FY 2025-26, Quarter 1 FUND
FY 2025-26
ORIGINAL
BUDGET
FY 2025-26
REVISED
BUDGET
YTD
ACTUALS
Q1
% USED
Total Capital Improvement Fund 55,010,627 55,878,518 4,684,195 8.4% Total Debt Service Funds 19,142,975 19,142,975 5,942,056 31.0% Total Enterprise Funds 44,653,962 44,653,962 1,518,384 3.4% Total Housing Funds 2,109,250 2,109,250 766,420 36.3% Total Housing Authority Funds 4,485,250 4,485,250 394,029 8.8% Total Internal Service Funds 34,720,066 34,720,066 11,442,931 33.0% Total Other Operations Funds 19,257,210 22,612,852 1,795,350 7.9% Total Special Revenue Funds 85,698,068 92,884,814 4,448,301 4.8% Total All Funds 265,077,407 276,487,686 30,991,667 11.2%
Capital Improvement Funds – revenues are below the 25 percent budget threshold.
This variance is mainly due to grants, as the entire grant award is budgeted, but actual revenue is based on reimbursements received from grantors for actual expenditures.
Debt Service Funds – revenues are above the budget threshold due to the transfer in from General Fund and Secured Pension Override Fund for the Pension Obligation Bond debt service payment due in July.
Enterprise Funds – revenues are below the budget threshold as the sewer drain fee allocation from the County has not yet been received in the Wastewater Fund.
Housing Funds – revenues are above the budget threshold due to higher than expected Housing In-Lieu Developer fee collections.
Housing Authority Funds – revenue is below the budget threshold mainly due to the Capital Grant fund allocations for operations and administration.
Internal Service Funds – revenue is above the budget threshold due to the
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transferring of the approved budget for vehicle replacement program at the beginning of the fiscal year. Other Revenue in these funds are received monthly.
Other Operation Funds – revenue is below the budget threshold due to Transportation and Employment and Training Funds, where grant revenues are received after expenditures have occurred. Additionally, Hilltop and Marina Special District Funds contribute to this variance as property tax revenue is collected in December, April, and June. As part of the mid-year budget review, City staff will include information regarding the status of capital projects in the Marina Special District Fund.
Special Revenue Funds – revenue is below the budget threshold due to the tax assessment allocation in the Secured Pension Tax Override Fund and the timing of grant revenue in the Transformative Climate Communities Grant Fund.
Non-General Fund Expenditures
Overall, 14.0 percent of non-general fund budgeted expenditures have been spent.
Spending patterns in non-general funds are similar to those in the General Fund and are trending as expected. Most expenditures are either at or below the 25 percent threshold. Expenditures exceeding this threshold are primarily attributable to purchase order encumbrances. Table 4 summarizes the expenditure budget to actuals for non- general funds. For details by individual fund, see Attachment 2.
Table 4: Non-General Fund Expenditures, FY2025-26, Quarter 1 FUND
FY 2025-26
ORIGINAL
BUDGET
FY 2025-26
REVISED
BUDGET
YTD
ACTUALS
Q1
ENCUMB.
% USED
W/O
ENCUMB
% USED
W
ENCUMB
Total Capital Improvement Fund 109,470,186 121,130,385 1,504,565 13,840,087 1.2% 12.7% Total Debt Service Funds 19,232,511 19,232,511 4,216,124 - 21.9% 21.9% Total Enterprise Funds 72,428,398 75,563,313 13,788,605 14,138,523 18.2% 37.0% Total Housing Funds 4,368,368 4,467,609 285,913 141,822 6.4% 9.6% Total Housing Authority Funds 4,494,250 4,494,250 678,190 477,442 15.1% 25.7% Total Internal Service Funds 46,171,816 52,535,289 8,482,640 7,867,884 16.1% 31.1% Total Other Operations Funds 25,703,833 30,760,178 3,872,370 4,490,941 12.6% 27.2% Total Special Revenue Funds 101,925,131 120,100,042 27,311,801 20,897,684 22.7% 40.1% Total All Funds 383,794,493 428,283,577 60,140,208 61,854,382 14.0% 28.5%
Capital Improvement Funds – expenditures are below the budget threshold due to the timing of multi-year capital projects. See Attachment 3 for additional details on Capital Improvement Projects.
Debt Service Funds – debt service expenditures follow the City’s debt service schedules. Actuals of $4.2 million in Q1 represent the City’s debt service payment for the 2022 Pension Obligation Bonds.
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Enterprise Funds – expenditures are above the budget threshold due to the timing of several capital projects in the Wastewater Fund. See Attachment 3 for additional details on Enterprise Fund expenditures.
Housing Funds – expenditures are below the budget threshold primarily due to activity in the Community Development Block Grant (CDBG) Fund and the Successor Housing Agency Funds. Lower expenditures in the CDBG Fund are due to the timing of multi-year projects. Lower expenditures in the Successor Housing Fund are due to lower than anticipated loans being processed or issued due to program staffing constraints.
Richmond Housing Authority (RHA) Funds – expenditures are below the budget threshold due to Richmond Village One, Two, and Three being pass-through funds with no drawdown requests in Q1.
Internal Service Funds – expenditures are below the budget threshold due to the timing of purchases in the Equipment Vehicle Replacement Program. Larger vehicle purchases, like fire apparatus, take approximately 12-18 months to complete.
Other Operations Funds – expenditures are below the budget threshold primarily due to activity in the Planning and Building Fund and Employment and Training Fund. Lower expenditures in the Planning and Building Fund are due to the timing of approved grants. An administrative budget clean-up is required on certain grants due to carry forward purchase orders as part of the fiscal year end closing process.
Lower expenditures in the Employment and Training Fund are due to delays in processing financial transactions resulting from the timing of filling vacant administrative positions.
Special Revenue Funds – expenditures are below the budget threshold due to the timing on multi-year projects such as the Main Library Renovation project in the Library Fund, several projects in the Environmental and Community Investment Agreement (ECIA) Fund, and other large grants including the American rescue Plan Act (ARPA), Transformative Climate Grant, Encampment Resolution Fund Round 2 and Round 3.
Next Steps
City staff will continue to monitor revenues and expenditure trends in the current fiscal year to determine if adjustments will be needed during the mid-year budget review which will be presented to the City Council in February 2026. In addition, as part of the mid-year budget review, staff will include information regarding the status of capital projects in the Marina Special District Fund as well as the Developer Impact Fees Fund.
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DOCUMENTS ATTACHED:
Attachment 1 – General Fund – Quarter 1 Budget Report
Attachment 2 – Non - General Funds – Quarter 1 Budget Report Attachment 3 – Capital Improvement Projects Quarter 1 Report