March 17, 2026
City Manager’s Office
Finance Department
DATE: March 17, 2026
TO: Mayor Martinez and Members of the City Council
FROM:
Shasa Curl, City Manager
Nickie Mastay, Deputy City Manager, Internal Services
LaShonda White, Deputy City Manager, Community Services Emily Combs, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager
Antonio Banuelos, Accounting Manager
SUBJECT:
Fiscal Year 2024-25 Mid-Year Budget Review
FINANCIAL IMPACT: The proposed mid-year adjustments result in an increase of $1,407,595 in General Fund revenues, an increase of
$1,407,595 in General Fund expenditures, an increase of $1,609,411 in Non-General Fund revenues and an increase of $1,989,411 in Non-General Fund expenditures.
PREVIOUS COUNCIL
ACTION:
June 24, 2025,
January 27, 2026
STATEMENT OF THE
ISSUE:
Finance staff are presenting the Fiscal Year 2025-26 Mid- Year Budget Review Report to provide an overview of the City’s operating revenue and expenditures which covers
financial activity from July 1, 2025, through December 31, 2025.
RECOMMENDED
ACTION:
RECEIVE the Fiscal Year 2025-26 Mid-Year Budget Review
presentation and report for the period of July 1, 2025, through December 31, 2025; and ADOPT a resolution approving
proposed Fiscal Year 2025-26 Mid-Year budget adjustments – Finance Department (Shasa Curl 510-620-6512/Emily
Combs 510-620-6790).
AGENDA
REPORT
March 17, 2026
DISCUSSION:
The Mid-Year Budget Review provides an opportunity to assess the implementation of the Fiscal Year (FY) 2025-26 Operating Budget and the FY 2025-30 Five-Year Capital Improvement Plan adopted by the City Council on June 24, 2025 (Resolutions No. 91- 25 and 92-25). This review monitors financial performance and ensures alignment with the City’s long-term goals.
Long-term Fiscal Stability
In addition to reviewing mid-year performance, it is essential to consider the broader economic and structural conditions that influence the City’s long-term fiscal outlook.
These external pressures, most of which are outside the City’s direct control, shape operating costs, revenue stability, and the City’s ability to preserve a structurally balanced budget.
Global Economic Conditions
Beyond local factors, City staff are closely monitoring global economic conditions.
Emerging conflicts and geopolitical instability have introduced new volatility in financial markets, contributing to fluctuations in interest rates and inflation expectations. These external pressures may affect the City’s borrowing costs, investment income, and the pricing of utilities, construction materials, equipment, and contracted services. Given this uncertainty, City staff recommend continued caution in financial planning, conservative forecasting assumptions, and sustaining the City’s reserve target to protect against potential cost increases or revenue disruptions in the second half of the fiscal year.
Labor Market Conditions: National, State, and Local Unemployment Trends
To provide additional context to the City’s mid-year fiscal position, City staff reviewed recent unemployment trends at the national, state, and local levels. Labor market conditions directly influence consumer spending, sales and use tax revenues, demand for City services, and overall economic resilience. Figure 1 below presents the most recent unemployment data for the City of Richmond, providing an overview of local labor market conditions. Figure 2 provides comparative unemployment trends for both California and the United States, offering broader context for evaluating Richmond’s position within regional and national economic conditions.
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Figure 1: City of Richmond, CA Historical Unemployment Rate
Figure 2: Unemployment Rate, California vs. US
Declining Federal Support for the Richmond Housing Authority
Long-standing structural pressures also affect the City’s fiscal responsibilities. One such pressure is the continued decline in federal support for local public housing agencies.
The federal government is no longer the reliable partner it once was in meeting the operational needs of the Richmond Housing Authority (RHA), and federal funding levels have not kept pace with the RHA’s service obligations. As a result, RHA will continue to require General Fund support to sustain essential housing services, and the City must incorporate this ongoing responsibility into its long-term fiscal strategy. In addition to RHA, City staff must continue to monitor other federally funded programs across departments, many of which face similar risks if declining or uncertain federal
12.30%
10.90%
9.30%
7.50%
6.00%
5.10%
4.10% 3.30%3.30% 2.90%
9.50%
4.80%
3.10%
4.20% 4.40%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Unemployment Rate
Year
December Unemployment Rate of Each Year
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appropriations materialize. Ongoing monitoring is necessary to ensure the City can plan for potential funding gaps and maintain continuity of core services.
CalPERS Investment Volatility
Another key long-term fiscal risk is the investment performance of the California Public Employees’ Retirement System (CalPERS), which continues to play a major role in shaping the City’s overall ongoing operating costs. In recent years, CalPERS’ investment results have been strong enough to help the City avoid unanticipated increases in required pension contributions. However, there have also been years when investment earnings were significantly lower than expected. In FY 2021–22, for example, CalPERS experienced a net investment loss of 6.1 percent, which increased the City’s unfunded pension liability by more than 10 percent and drove higher annual payments that will continue for many years.
When CalPERS investment losses occur, the City must pay higher pension contributions to make up the difference. These increases directly raise ongoing operating costs and reduce funding available for essential services, maintenance, and City Council priority projects. These cost pressures can arise quickly and are outside of the City’s control. As such, volatility in CalPERS investment performance remains an important long-term fiscal risk. Continued monitoring, conservative financial planning, and maintaining adequate reserves are critical to ensure the City can manage potential future increases and protect overall budget stability.
Upcoming Citywide Policy and Operational Initiatives
City staff continue to advance a substantial body of policy, regulatory, and operational work in addition to delivering core municipal services. In the coming months, City staff will bring forward several policy updates, public hearings, and strategic planning items across financial management, public safety, community programming, regulatory compliance, etc.
Advanced Life Support (ALS) Services – Revenue enhancement recommendations
1. Long-term operational sustainability
2. Capital planning tied to future fire station improvements
Regulatory and Policy Updates
1. Cannabis industry regulations and direction from City Council
2. Stormwater and wastewater rate study progress, including coordination with regional wastewater operations and the Veolia wastewater treatment partnership
3. Additional updates to the Tobacco Retailer License ordinance
4. Additional regulatory and policy direction related to immigration services, including an update on the implementation of a $1 million program providing direct legal assistance, consultations, and representation for Richmond residents
5. Public awareness and outreach efforts focused on culturally responsive education regarding immigrant rights and available services
March 17, 2026
Community Focused Initiatives
1. Presentation and policy direction on the Richmond Fund for Children and Youth (e.g. renewal as-is, with modifications, or proceeding as directed)
2. Community engagement for Richmond General Fund settlement funds, including exploration of long-term investment, endowment approaches to support sustainable community benefits, etc.
3. Continued implementation of the Black Resiliency Fund and related community health, wellness, and economic equity initiatives
4. Community Crisis Response Program (ROCK – Reach Out with Compassion and Kindness), supporting community-based responses to behavioral health and social service needs
5. Policies supporting and protecting Richmond residents, including immigration related matters
6. Community events and meetings on wildfire preparation and proposals for park, public art, and community facility improvements, including the development of new soccer fields, the Art Corridor initiative, and planning efforts associated with the Martin Luther King Jr. Community Center rebuild, etc.
Public Hearings and Compliance Updates
1. Accessory Dwelling Unit (ADU) zoning amendments
2. Fire code updates
3. Additional mandatory regulatory updates
Operational and Public Safety Items – Procurement actions and training related items
1. Public safety equipment approvals
2. Continued emergency service efforts supporting unhoused residents in coordination with Contra Costa County, ROCK, CORE, CARE Court, etc.
3. Citywide staff training initiatives aligned with specific classifications to support the efficient and effective delivery of services
4. Implementation of improved internal management systems (iMS) to strengthen operational effectiveness
5. Ongoing technology modernization and continuous improvement initiatives to enhance service delivery and internal coordination
Economic Development and Capital Projects
1. Implementation of a City-wide economic sectoral development strategy to support job growth and investment
2. Planning and redevelopment efforts associated with key sites, including Point Molate, the Craneway waterfront area, Nystrom Village redevelopment initiative, Macdonald Avenue, etc.
3. Continued coordination on public-private development opportunities, cultural assets, and waterfront revitalization projects
March 17, 2026
Collectively, these efforts reflect the City’s commitment to fiscal stewardship, regulatory compliance, community investment, economic vitality, and long-term strategic planning.
Year-End Financial Performance
On March 3, 2026, as part of the FY 2024-25 Audited Unspent Funds report, City staff reported that $8.2 million in FY 2024-25 appropriations remained unspent and available for allocation to capital and other priority projects. For FY 2025-26, the revised total budget for all funds, including both General Fund and Non-General Fund appropriations, exceeds $729 million. This $8.2 million in unspent funds represents approximately 1 percent of the City’s overall budget, a variance that falls within a normal and acceptable range for year-end budget performance. This positive fiscal result is further supported by the City’s continued maintenance of its minimum reserve target, 21 percent of the upcoming year’s budgeted General Fund expenditures, as required by the City’s General Fund Reserve Policy.
This year-end margin is an essential part of the City’s fiscal stability. It plays a critical role in sustaining structural balance and protecting reserves. Maintaining a modest year-end unspent balance is a fundamental component of sustaining a structurally balanced General Fund.
In years when this operating margin does not occur, the City would need to rely on General Fund reserves or one-time limited-term revenues to close the budget gap. Such reliance would compromise the City’s ability to maintain its 21 percent reserve target and undermine flexibility to respond to cost increases from inflation or revenue changes in future years. Maintaining a small year-end balance of unspent funds or surplus helps support long-term fiscal stability and reduces the likelihood of drawing down reserves for ongoing operations.
Mid-Year Fiscal Framework: Adopted Budget, Capital Investments, and Strategic Initiatives
The Fiscal Year 2025-26 Adopted Budget reflects a structurally balanced General Fund with:
Revenues: $308.6 million
Expenditures: $260.1 million
Limited-term funding: $48.5 million reserved for strategic allocation
Key amendments during adoption included targeted investments in equity and community health, such as:
$1.5 million for the Black Resiliency Project
$100,000 for gender-based violence prevention
$145,000 for community engagement events
$3.0 million in the General Capital Fund was reallocated from other projects to advance the Harbour-8 Center and Park Expansion project, which brought its total
March 17, 2026
project budget to $3.4 million for the budget year.
The Capital Improvement Plan for FY 2025-26 totals $170 million, addressing critical infrastructure needs and acknowledging approximately $900 million in unfunded projects over the next decade. City Council directives emphasized transparency and accountability, including quarterly vacancy reporting and strategic use of limited-term revenue.
The Mid-Year Budget Review focuses on monitoring revenue and expenditure trends, assessing progress on adopted initiatives, and recommending adjustments to maintain fiscal stability. Key priorities include evaluating the performance of the General Fund and Non-General Funds, addressing timing variances in major revenue sources, and implementing proposed mid-year budget adjustments totaling $994,878 in additional Non-General Fund revenues and $4.6 million in Non-General Fund expenditures. City staff are also advancing capital improvement projects and managing operational needs across departments. These actions reinforce the City’s commitment to transparency, fiscal responsibility, and sustainable investment in community priorities.
This report presents an overview of the City’s mid-year operating revenue and expenditures for Fiscal Year (FY) 2025-26, which covers financial activity from July 1, 2025, through December 31, 2025. The threshold for the first six months of the fiscal year is 50 percent, meaning approximately half of the Adopted Budget is expected to have been expended and half of the revenue received. However, the timing of certain revenues, such as property taxes received in December, April, and June, can cause actual figures to differ from this benchmark.
General Fund
General Fund Revenues
Through December 2025, General Fund revenues totaled $162.3 million, representing
52.6 percent of the Adopted Budget. This is slightly above the mid-year benchmark of 50 percent and the variance is primarily due to the timing of certain revenue sources.
For example, the City receives its first secured property tax installment (55 percent) in December. Table 1 below summarizes year-to-date budget-to-actual revenue performance. Additional details are provided in Attachment 1: General Fund Revenue and Expenditure Summary.
Table 1: General Fund Revenue, FY 2025-26, Mid-Year
General Fund
FY 2025-26
Original
Budget
FY 2025-26
Revised
Budget
YTD
Actuals
Available
Budget % Used
Property Taxes 58,329,291 58,329,291 25,344,741 32,984,550 43.5% Sales & Use Tax 60,163,807 60,163,807 16,640,663 43,523,144 27.7% Utility Users Tax 64,943,670 64,943,670 29,712,471 35,231,199 45.8% Other Taxes 28,399,659 28,399,659 10,199,294 18,200,365 35.9% Licenses, Permits & Fees 17,274,036 17,274,036 4,616,324 12,657,712 26.7% Fines & Forfeitures 200,000 200,000 382,637 (182,637) 191.3% Interest Income 3,030,545 3,030,545 2,060,114 970,431 68.0%
March 17, 2026
Charges For Services 3,724,495 3,724,495 1,455,133 2,269,362 39.1% Other Revenue 50,167,500 50,167,500 50,102,273 65,227 99.9% Rental Income 791,157 791,157 326,711 464,446 41.3% Intergovernmental State Taxes 150,000 150,000 177,196 (27,196) 118.1% Intergovernmental State Grant 180,000 180,000 277,379 (97,379) 154.1% Intergovernmental Other Grant 290,000 290,000 226,024 63,976 77.9% Proceeds From Sale of Property 15,000 15,000 133 14,867 0.9% Loan/Bond Proceeds 40,400 40,400 - 40,400 0.0% Operating Transfers In 20,853,959 20,853,959 20,810,586 43,373 99.8% Total Revenues 308,553,519 308,553,519 162,331,679 146,221,840 52.6%
Property Tax – The FY 2025-26 Adopted Budget projected a 4.1 percent increase in Assessed Valuation for Secured Property Taxes. However, Contra Costa County’s (County) 2025-2026 Assessment Roll, released in July 2025, reflects 3.53 percent growth, resulting in an estimated $78,000 reduction. Other factors impacting property tax revenue include property sales and tax increment allocation. Successor Agency Surplus and Pass-Through revenues to the General Fund have declined over the past two years following earlier growth, due to decreases in assessed values within the former redevelopment project areas. The City received its December payment from the County, which accounts for 55 percent of the annual secured property taxes, and this payment received aligns with budgeted projections.
Total Property Tax collected through mid-year is $25.3 million, or 43.5 percent of the budgeted amount.
Sales & Use Tax – Sales & Use Tax revenues have shown steady growth in recent years, and this positive trend is expected to continue through the remainder of the fiscal year. Total Sales Tax collected through mid-year is $16.6 million, or 27.7 percent of the budgeted amount.
Utility Users Tax (UUT) – UUT applies to cable television, gas and electricity, and telecommunications. Overall, UUT is tracking above budgeted levels, primarily due to the Maximum Tax Payable Provision which increased by 11 percent compared to the original forecast of 7 percent. Other revenue streams within UUT remain flat or are declining. Mid-year collections total $29.7 million, or 45.8 percent of the budgeted amount.
Other Taxes – This category includes various taxes and franchise fees, such as Transient Occupancy Tax (Hotel Tax) and Documentary Transfer Tax on property sales in Richmond. The Documentary Transfer Tax is highly volatile and difficult to predict as one or two large, unpredicted property sales can significantly impact revenues. Mid-year collections total $10.2 million, or 35.9 percent of the budgeted amounts.
Licenses, Permits, & Fees – This category includes business license tax revenue and various departmental permits and fees. Mid-year collections total $4.6 million, or
26.7 percent of the budgeted amount. With the adoption of Measure U, all business licenses expire on December 31, with renewal deadlines of March 1 for rentals and April 1 for all other businesses. Most revenue will be received between February and
March 17, 2026
April 2026.
Fines & Forfeitures – This category includes citations and fines. Mid-year collections total $382,000, which is 191.3 percent of the budgeted amount. Interest Income – Interest income earned on the City’s bank accounts totals $2.1 million, or 68.0 percent of the budgeted amount.
Charges for Services – This category includes fees for services to recover costs for fire prevention, public works, engineering, and passport services. Mid-year collections total $1.5 million, or 39.1 percent of the budgeted amount.
Other Revenue – This category includes donations, contributions, reimbursements, refunds as well as limited-term revenue. Mid-year collections total $50.1 million, or
99.9% of the budgeted amount.
Rental Income – This category includes the various rents and leases managed by City departments. Mid-year collections total $327,000, or 41.3 percent of the budgeted amount.
Intergovernmental State Taxes – This category includes State Motor Vehicle Fees.
Mid-year total $177,000 or 118.1 percent of the budgeted amount.
Intergovernmental State Grant – This revenue category includes State Mandated Cost Reimbursements and Police Officer Standards and Training (POST) reimbursements. Mid-year collections total $277,000 or 154.1 percent of the budgeted amount.
Intergovernmental Other Grant – Mid-year collections for other grants total $226,000 or 77.9 percent of the budgeted amount.
Loans and Bond Proceeds – No revenues related to these types of proceeds have been collected through mid-year.
Operating Transfers-In – Operating transfers are typically processed following adoption by City Council. Mid-year collections total $20.8 million, or 99.6 percent of the budgeted amount.
General Fund Expenditures
Through December, General Fund expenditures totaled $122.3 million. This is within the mid-year benchmark, with actuals at 46.0 percent excluding encumbrances and 50.1 percent with encumbrances. Encumbrances are funds that have been committed through purchase orders for specific purposes (e.g., copier leases) but not yet fully spent.
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Table 2 below summarizes the year-to-date budget-to-actual expenditure performance.
Additional details are provided in Attachment 1: General Fund Revenue and Expenditure Summary.
Table 2: General Fund Expenditure, FY2025-26, Mid-Year
General Fund
FY 2025-26
Original
Budget
FY 2025-26
Revised
Budget
YTD
Actuals Encumb. Available
Budget
% Used
W/O
Encumb.
% Used
W.
Encumb.
Salaries & Wages 96,762,515 96,563,400 49,121,958 - 47,441,442 50.9% 50.9% Fringe Benefits 74,157,128 74,264,514 36,962,800 - 37,301,714 49.8% 49.8% Professional &
Administrative 26,354,296 26,965,556 8,463,915 5,246,410 13,255,230 31.4% 50.8% Other Operating 9,511,051 9,258,182 3,212,969 2,195,607 3,849,607 34.7% 58.4% Utilities 7,265,830 7,764,670 2,646,825 1,658,910 3,458,934 34.1% 55.5% Equipment & Contract
Services 5,513,366 5,710,199 887,689 942,791 3,879,718 15.5% 32.1% Provision for Insurance Loss 46,500 46,500 39,446 - 7,054 84.8% 84.8% Cost Pool 21,145,184 21,145,184 12,300,305 - 8,844,879 58.2% 58.2% Asset/Capital Outlay 2,842,986 2,993,938 734,335 752,373 1,507,230 24.5% 49.7% Debt Service Expenditure 775,647 775,647 428,682 - 346,965 55.3% 55.3% Cost Plan Reimbursement (3,362,171) (3,362,171) (1,749,474) - (1,612,697) 52.0% 52.0% Grant Expenditures 34,497 34,497 - - 34,497 0.0% 0.0% Transfers Out 19,006,690 23,579,390 9,242,044 - 14,337,346 39.2% 39.2% Total Expenditures 260,053,519 265,739,506 122,291,494 10,796,092 132,651,920 46.0% 50.1%
Salaries & Wages – Includes base salaries for full-time and part-time staff, overtime, and other compensation types. Mid-year expenditures total $49.1 million, or 50.9 percent of budget.
Fringe Benefits – Includes medical, dental, workers' compensation, CalPERS pension costs, other post-employment benefits (OPEB), and other fringe benefits.
Mid-year expenditures total $36.9 million, or 49.8 percent of budget.
Professional & Administrative Services – Includes professional and consulting services and contractual obligations (e.g., animal control). Mid-year expenditures total $8.4 million, or 31.4 percent of the budget, and with purchase order encumbrances of $5.2 million, the total is $13.6 million, or 50.8 percent of the budget.
Other Operating – Includes copier leases, office supplies, and other items. Mid-year expenditures total $3.2 million, or 34.7 percent of budget and with purchase order encumbrances of $2.1 million, the total is $5.4 million or, 58.4 percent of the budget.
Utilities – Includes gas, electricity, water, refuse, telephone, and internet services for City facilities. Mid-year expenditures total $2.6 million or 34.1 percent of budget, and with purchase order encumbrances of $1.6 million, the total is $4.2 million, or 55.5 percent of the budget.
Equipment & Contract Services – Includes equipment and maintenance/repair services. Mid-year expenditures total $887,689 or 15.5 percent of the budget and with purchase order encumbrances of $942,791, the total is $1.8 million, or 32.1 percent of the budget.
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Provision for Insurance Loss – Includes insurance premiums for various items including drone insurance, fire apparatus insurance, and fire boat insurance. Mid- year expenditures total $39,446, or 84.8 percent of budget. Insurance premiums are due annually at the start of the fiscal year.
Cost Pool – Includes General Liability Allocation, Vehicle Replacement Program, and Civic Center Allocation. Mid-year expenditures total $12.3 million or 58.2 percent of budget. Cost Pool charges are allocated monthly by the Finance Department.
Asset/Capital Outlay – Includes major capital purchases, maintenance projects, and other assets with a value greater than $5,000. Mid-year expenditures total $734,335 or 24.5 percent of budget and with purchase order encumbrances of $752,373, the total is $1.5 million, or 49.7 percent of the budget.
Debt Service Expenditure – Includes debt service for loans and bonds. Mid-year expenditures total $428,682, or 55.3 percent of budget. Debt service payments were made for various loans and bonds related to streetlight upgrades.
Cost Plan Reimbursement – Reflects reimbursements to the General Fund for internal City services (e.g., Human Resources, Information Technology, Finance) provided to other City funds. These expenditures are shown as a negative amount to reflect the reimbursement of the General Fund, totaling $1.7 million, or 52.0 percent of the budget.
Grant Expenditures – No expenditures have occurred in this category. The grants that were previously budgeted in this category were correctly moved to Outside Grants Fund within the Non-General Fund category.
Transfers Out – Includes operating transfers from the General Fund to non-General Funds primarily for operating subsidies and for debt service payments. Mid-year expenditures total $9.2 million, or 39.2 percent of budget.
Non-General Funds
Non-General Fund Revenues
Through December 2025, $97.3 million or 31.6 percent of the budgeted amount has been collected for Non-General Funds, and overall performance is trending as expected.
The timing of receipts varies by fund and revenue sources. For example, grant funds are typically received after expenditures are incurred and reimbursement requests are submitted to grantors.
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To ensure future funding for the City’s Advanced Life Support (ALS) Program and City staff may need to evaluate additional General Fund subsidies for certain non-general funds. These funds are not projected to generate sufficient revenue to meet rising operational costs, increased General Fund support for ALS may reduce the City’s ability to subsidize other Non-General Fund programs described in this section.
Table 3 below summarizes year-to-date budget-to-actuals revenue for non-general funds by fund group. Additional details are included in Attachment 2: Non-General Fund Revenue and Expenditures by Fund.
Table 3: Non-General Fund Revenues, FY 2025-26, Mid-Year Funds
FY 2025-26
Original
Budget
FY 2025-26
Revised
Budget
YTD
Actuals
Available
Budget % Used
Capital Improvement Funds 55,010,627 75,820,190 8,749,880 67,070,310 11.5% Debt Service Funds 19,142,975 19,142,975 8,169,251 10,973,723 42.7% Enterprise Funds 44,653,962 54,903,962 23,145,858 31,758,104 42.2% Housing Funds 2,109,250 2,109,250 918,069 1,191,182 43.5% Housing Authority Funds 4,485,250 4,485,250 1,733,988 2,751,262 38.7% Internal Service Funds 34,720,066 34,720,066 19,951,786 14,768,280 57.5% Other Operations Funds 19,257,210 24,259,335 8,685,257 15,574,078 35.8% Special Revenue Funds 85,698,068 92,874,664 26,013,261 66,861,403 28.0% Total All Funds 265,077,407 308,315,691 97,367,349 210,948,342 31.6%
Capital Improvement Funds – Includes various funds including grants for Capital Projects, Developer Impact Fees, Measure J, and State Gas Tax. Actual revenues total $8.7 million, or 11.5 percent of the budget. The low percentage is expected because capital revenues, such as grants, impact fees, and interfund transfers, are tied to project starts, bid awards, and reimbursement cycles. Debt Service Funds – Includes the Pension Obligation Bond (POB) and Civic Center Bonds. Midyear revenues total $8.2 million, or 42.7 percent of the budget. Revenue timing aligns with the debt service schedules, and remaining receipts follow the amortization calendar.
Enterprise Funds – Includes the Port, Wastewater, Stormwater, Marina and KCRT funds. Mid-year revenues total $23.1 million, or 42.2 percent of the budget. The Wastewater Fund accounts for $19.1 million of this amount. Other funds are trending as expected, except for the KCRT Fund, where cable fee revenues continue to decline as consumers shift to streaming services. A long-term revenue strategy is needed to support KCRT operations that would otherwise be subsidized by the General Fund.
Housing Funds – Includes City Housing Programs, Community Development Block Grant (CDBG), and Housing in Lieu Fee funds. Mid-year revenues total $918,069, or
43.5 percent of the budget. The Housing Administration Fund is the primary contributor in this category with $718,448 revenues received, primarily from the repayment of Housing and Urban Development Section 108 Ford Point and North Richmond Iron Triangle Loans, which have received the final payment in August 2025. Housing in Lieu Fees are tied to development progress which is trending
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below the target with only receiving $12,925 from July – December 2025. Richmond Housing Authority (RHA) Funds – Mid-year revenues total $1.7 million, or
38.7 percent of the budget. Revenues are trending as expected, except for pending pass-through federal grant reimbursements for Richmond Village I, II, and III related to their July – December 2025 operating subsidy period. Internal Service Funds – Includes the Insurance Reserves, Equipment Services and Compensated Absences funds. Mid-year revenues total $19.9 million, or 57.5 percent of the budget. These revenues are generally received monthly, except for Equipment Replacement revenues, which are recorded at the start of the fiscal year to facilitate procurement.
Other Operation Funds – Includes the Transportation, Hilltop Landscape Maintenance District, Marina Bay Landscape and Lighting District, Planning and Building, and Employment and Training funds. Mid-year revenues total $8.7 million, or 35.8 percent of the budget. Revenues are trending as expected. Planning and Building includes grants that are reimbursed following project milestones. Special Revenue Funds – Includes Pension Override, Library, Public Art, Rent Program, Kids First Initiative (Richmond Fund for Children and Youth), and various large grants. Mid-year revenues total $26.0 million, or 28.0 percent of the budget.
Revenues are trending as expected. Grants in these funds are reimbursed following project milestones.
Non-General Fund Expenditures
Through December 2025, 22.4 percent of Non-General Fund budget appropriations have been expended. Spending patterns in these funds vary due to the timing and nature of capital projects, debt service, and grant-funded programs. Most expenditures are at or below the mid-year benchmark of 50 percent. Amounts above the threshold are primarily due to purchase order encumbrances and scheduled debt service payments.
Table 4 below summarizes year-to-date budget-to-actual expenditures for Non-General Funds expenditures. Additional details are provided in Attachment 2: Non-General Fund Revenue and Expenditures by Fund.
Table 4: Non-General Fund Expenditures, FY 2025-26, Mid-Year Funds
FY 2025-26
Original
Budget
FY 2025-26
Revised
Budget
YTD Actuals Encumb. Available
Budget
% Used
W/O
Encum
b.
% Used
W.
Encumb.
Capital Improvement
Funds 109,470,186 141,011,306 9,133,328 23,993,951 107,884,027 6.5% 23.5% Debt Service Funds 19,232,511 19,232,511 10,348,119 0 8,884,392 53.8% 53.8% Enterprise Funds 72,428,398 86,463,313 19,991,107 19,156,767 47,315,439 23.1% 45.3% Housing Funds 4,368,368 4,467,609 1,013,655 271,859 3,182,095 22.7% 28.8% Housing Authority
Funds 4,494,250 4,494,250 1,889,128 333,142 2,271,980 42.0% 49.4%
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Internal Service
Funds 46,171,816 52,935,289 16,944,642 7,750,515 28,240,132 32.0% 46.7% Other Operations
Funds 25,703,833 31,626,415 9,459,870 3,849,143 18,317,402 29.9% 42.1% Special Revenue
Funds 101,925,131 122,947,715 34,780,769 23,440,295 64,726,651 28.3% 47.4% Total All Funds 383,794,493 463,178,407 103,560,617 78,795,672 280,822,117 22.4% 39.4%
Capital Improvement Funds – Mid-year expenditures are below budget as project phases span multiple years, while budgets are appropriated in a single year. Debt Service Funds – Mid-year expenditures exceed the 50 percent threshold as payments follow debt service payment schedules, which are front-loaded according to the amortization timelines.
Enterprise Funds – Mid-year expenditures are 23.1 percent of the budget without encumbrances and 45.3 percent with encumbrances. Variances are primarily in the Port of Richmond and Wastewater Funds, which include several multi-year capital projects.
Housing Funds – Mid-year expenditures are 22.7 percent of budget without encumbrances and 28.8 percent with encumbrances, mainly due to lower-than- expected spending in the Housing In-Lieu Developer Fee Fund. Housing Authority Funds – Mid-year expenditures without encumbrances are 42.0 percent of budget and 49.4 percent with encumbrances. The variance is mainly due to low capital project spending pending completion of negotiations for Nystrom Village. Developers have been selected and approved by the City Council, and the City is finalizing the Exclusive Right to Negotiate Agreement (ERNA). Most capital funds will be spent once Nystrom Village renovations begin. Internal Service Funds – Mid-year expenditures without encumbrances are 32.0 percent of the budget and 46.7 percent with encumbrances. The Equipment Replacement Fund accounts for most encumbrances due to vehicle replacement purchase orders. The Equipment Replacement fund is currently being reviewed for potential funding needs. Should there be any funding shortfall, City staff will bring it to the City Council for approval in Quarter 3 or Quarter 4 Budget Review. Other Operations Funds – Mid-year expenditures without encumbrances are 29.9 percent of the budget and 42.1 percent with encumbrances. Special Revenue Funds – Mid-year expenditures without encumbrances are 28.3 percent of the budget and 47.4 percent with encumbrances.
Mid-Year Budget Adjustments
Proposed adjustments to the General Fund include increases of $1,407,595 to the revenue and expenditure budgets. Proposed adjustments to the General Fund are listed below in Table 5 and Attachment 3.
March 17, 2026
Table 5: FY 2025-26 Mid-Year Budget General Fund Adjustments Description
Proposed
Mid-Year
Adjustment
General Fund Revenue Adjustment
Operation Utility Users Tax updated based on actuals paid $1,407,595 Less General Fund Expenditure Adjustments
Corporation Yard Fence $210,000
Key Policy Initiatives $50,000
Parks: Play Structure Replacements and Bathroom Assessments $347,595 Power Washing Facilities and Right-of-Ways $100,000
Richmond Art and Lighting Phase 3 Funding Shortfall (CalTrans Project) $700,000 General Fund Expenditure - Total $1,407,595
General Fund Net Adjustments $-
For the Non-General Fund, proposed adjustments include an increase to the Non- General Funds revenue budget totaling $1,746,285 million and an increase to Non- General Funds expenditure budget totaling $2,040,240 across multiple funds. Proposed adjustments to the Non-General Fund are listed below in Table 6 and Attachment 3.
Table 6: FY 2025-26 Mid-Year Budget Non-General Funds Adjustments Description
Proposed
Mid-Year
Adjustment
Non-General Funds Revenue Adjustments
General Capital Fund – Transfer-in from General Fund for Capital Projects $1,257,595 General Capital Fund – Fair share contribution revenue received $334,565 Public Art Fund – 1.5 percent Public Art Contribution on Santa Rita Stabilization Project $17,251
Non-General Funds Revenue Adjustments – Total $1,609,411
Non-General Funds Expenditure Adjustments
General Capital Fund – Various Capital Projects $1,257,595 General Capital Fund – Appropriate budget from Fair share contribution $334,565 General Capital Fund – 1.5 percent Public Art Contribution on Santa Rita Stabilization Project
$17,251
Impact Fee - Fire – Appropriate from fund balance for Personal Protective Equipment/Self-Contained Breathing Apparatus
$65,000
Wastewater – Appropriate from fund balance to cover projected shortfall in PG&E Cost
$315,000
Non-General Funds Expenditure Adjustments – Total $1,989,411
Non-General Funds Net Adjustments ($380,00)
Hilltop and Marina Bay Landscape Maintenance District Update
The Public Works has contracted with SCI Consulting Group to evaluate the operational and financial needs of the Hilltop and Marina Bay Landscape Maintenance Districts.
City staff plan to present the study’s findings and recommendations to the City Council as part of the FY 2025-26 Quarter 3 Budget Report.
March 17, 2026
Developer Impact Fee Fund Update - Assembly Bill (AB) 1600
The City completed a comprehensive update of its Development Impact Fee program as part of the Master Fee Schedule adopted in May/June 2025. This update is supported by the 2024 Development Impact Fee Nexus Study Update, which recalculates maximum justified fees for sewer, parks, community center and aquatic facilities, police, fire, library, and storm drain infrastructure based on updated facility inventories, growth forecasts, and capital needs through 2040. The updated fee schedule maintains compliance with the Mitigation Fee Act (AB 1600) and AB 602 and continues the phased implementation approach approved by City Council.
In addition, City staff will develop a formal policy by 2027 to guide the prioritization and expenditure of Development Impact Fee revenues, ensuring transparent alignment between new development and the capital projects required to serve it. The next five-year AB 1600 findings report will be due in 2029.
Stormwater Rate Study Update
The City of Richmond is progressing on its Stormwater Fee Report and Rate Study. SCI Consulting Group is conducting data gathering and City staff interviews through April 2026, with financial options to be presented in late April 2026. A community survey will be conducted from May to June 2026, followed by presentation of results to the City Council in July 2026. Outreach will occur through late 2026, and a Draft Rate Study is scheduled for completion between September and December 2026. The Proposition 218 process is expected to begin in early 2027, with ballot tabulation in July 2027, and if approved, the first stormwater fee revenues anticipated in January 2028.
KCRT Fund Update
The City’s KCRT programming broadcast consists of City Council meetings and several other public boards and commissions meetings, along with other community programming. The operations and staffing are covered through Cable Franchise Fees.
The fees are collected from cable TV subscribers under the City’s cable franchise agreements.
Revenue has been declining for several years due to a decline in traditional cable TV subscriptions, and it is no longer sufficient to support operations. The Fund will need significant General Fund Subsidy at the year end to prevent a negative fund balance. As of December 2025, expenditures in the fund exceeded the revenue by $416,897. City staff will continue to monitor the fund and will present a recommendation on the required General Fund subsidy to the City Council as part of the Quarter 4 Financial Report.
Next Steps
March 17, 2026
City staff recommends that the City Council approve the proposed FY 2025-26 Mid- Year budget adjustments. City staff will continue to monitor revenue and expenditure trends in the current fiscal year to determine whether adjustments are needed for the Quarter 3 Budget Report, planned for May 2026. The draft FY 2026-27 Budget presentation to the City Council is planned for May 5, 2026, with the FY 2026-27 final budget adoption planned in June 2026.
City staff will continue to closely monitor budget performance throughout the remainder of the fiscal year and bring forward any necessary adjustments for City Council consideration. City staff remain focused on maintaining prudent fiscal management, supporting the delivery of essential services, and sustaining the City’s policy reserve target of at least 21 percent. Achieving an end-of-year unspent fund margin of error between 1 and 3 percent is considered an optimal and fiscally responsible outcome.
DOCUMENTS ATTACHED:
Attachment 1 – General Fund Revenue and Expenditure Summary Attachment 2 – Non-General Fund Revenue and Expenditure by Fund Attachment 3 – Mid-Year Budget Adjustments
Attachment 4 – Fiscal Year 2025-26 Mid-Year Proposed Position Listing Attachment 5 – Capital Improvement Projects Budget Report by Department Attachment 6 – Resolution - Mid-Year Budget Review FY 2025-26 Attachment 7 – DRAFT: List of City Ad Hoc, Boards, Commissions, Committees, Corporations, Regional Bodies, and Taskforce
Attachment 8 – City of Richmond Events/Festivals List
Attachment 9 – DRAFT Mid-Year Presentation