DRAFT
1 Fiscal Year 2025-26 Mid-Year Budget Review
Shasa Curl, Nickie Mastay, LaShonda White, Emily Combs, Mubeen Qader, Jerry Gurule & Antonio Banuelos
March 17, 2026
Overview
2 Recommended Action
Economic Outlook/Financial Headwinds
General Fund Revenue and Expenditure | Proposed Adjustments Non-General Fund Revenue and Expenditure | Proposed Adjustments Other Challenges
Next Steps & Questions
Recommended Action
3 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.
4 Economic Outlook: Local Impacts of Global Conflict
• Higher gas and energy prices, driven by global instability, increase household and business costs
• Supply-chain delays raise prices for goods and materials used by Richmond businesses
• Inflationary pressure affects everyday essentials, straining household budgets • Housing affordability challenges intensify as overall inflation drives up local rents • Increased costs for City services and infrastructure put pressure on Richmond’s fiscal health
• Local refineries become more strategically important, but higher regional energy costs impact residents
5 Economic Outlook: Richmond Historic Unemployment Rate
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
*Data Source: BLS Labor Statistics, Retreived on March 11, 2026 6 Economic Outlook: Historic Unemployment Rate California vs. US *Data Source: Beacon Outlook: California – Summer 2025, Published in August 2025 7 Financial Headwinds
Aging Infrastructure • CIP funding shortfalls
• Unfunded projects
Budget Constraints
• Limited growth in revenues
• Increasing expenditures due to labor costs, inflation, and other factors
Declining Federal
Support
• Federal government is no longer the reliable partner it once was in meeting the operational needs of the Richmond Housing Authority (RHA) and other federally funded programs
Global Economic
Conditions
• Emerging conflicts and geopolitical instability introduced new volatility
Unfunded Liabilities • CalPERS: $356 M
• OPEB: $53 M
Personnel Costs Growth
8 $146
$161
$173
$190
$100
$110
$120
$130
$140
$150
$160
$170
$180
$190
$200
FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Millions
Fiscal Year
Total Actual Personnel Costs - All Funds
Upcoming Policy and Operational Initiatives
9 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 – Cannabis industry regulations and direction from Council
1. Stormwater and wastewater rate study progress
2. Updates to the Tobacco Retailer License ordinance
Community Focused Initiatives – Kids First / Measure E & K
1. Community engagement for Polluters Pay Settlement funds
2. Policies supporting and protecting Richmond residents, including immigration related matters
3. Presentations on wildfire preparedness and proposals for park, public art, and community facility improvements
Upcoming Policy and Operational Initiatives
(Continued)
10 Public Hearings and Compliance Updates – Accessory Dwelling Unit (ADU) zoning amendments
1. Fire code updates
2. 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 Year-End
Financial
Performance
Unspent Funds: $8.2 million in
FY 2024-25 appropriations
remained unspent
• Represents ~1% pf the Cities total $729
million FY 2025-26 Budget
• Falls within a normal, acceptable year-end
variance
Reserves and Stability: City
maintains its required 21%
General Fund reserve target
• Year-end margin supports long-term fiscal
stability
• Helps sustain structural balance and protects
reserves
Year-End
Financial
Performance
(Continued)
Why the Margin Matters: Reduces
reliance on General Fund
reserves or one-time revenues
• Provides flexibility to absorb inflation and
revenue fluctuations
• Supports ongoing operations without
drawing down reserves
Bottom Line: A small, planned
year-end unspent balance
strengthens fiscal health
• Ensures sustained structural balance and
long-term financial resilience
General Fund Revenue Budget
13 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% 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% General Fund Expenditure Budget
14 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% General Fund – Expenditure Budget Adjustments
15 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 Bathrooms Assessment $347,595 Power Washing Facilities and Right of Way $100,000
Richmond Art and Lighting Phase 3 Funding Shortfall. Project Locations, Three I-80 Underpasses: Macdonald Ave, Barrett Ave, San Pablo Ave $700,000 General Fund Expenditure - Total $1,407,595
General Fund Net Adjustments $-
Richmond Art and Lighting Phase 3 Project
16 Overview
• Locations: Safety and lighting upgrades at three I-80 underpasses: Macdonald Ave, Barrett Ave, and San Pablo Ave.
• Public-Friendly Scope of Work:
• Better Walking Paths: New, smoother sidewalks and ADA-accessible curb ramps for all users. • Brighter Lighting: Installation of 152 new wall-mounted lights to improve visibility and safety at night. • Safety Barriers: 185 new safety posts (bollards) to better protect pedestrians from vehicle traffic. • Fresh Look: New roadway signs, bright crosswalk markings, and improved concrete slopes.
Funding Shortfall Summary
• An additional $700,000 is required to complete this project as planned:
• Construction Bid Shortfall ($300,000): Market costs for construction materials and labor came in higher than the 2025 estimates.
• Project Oversight ($350,000): Dedicated construction management to coordinate multiple contractors and state (Caltrans) permits—a requirement not funded in the original grant. • Emergency Reserve ($50,000): A standard contingency fund to cover any unexpected repairs or issues found once construction begins.
• Deadline: Work must be finished and the grant closed out by October 2026.
Non-General Fund Revenue
17 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% Non-General Fund Expenditures
18 Funds
FY 2025-26
Original
Budget
FY 2025-26
Revised
Budget
YTD
Actuals Encumb. Available
Budget
% Used
W/O
Encumb.
% 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% 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% 19 Non-General Fund – Budget 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 ($380,000)
Other Challenges
20 Public Works: Hilltop
and Marina Bay
Landscaping and
Maintenance Districts
• SCI Consulting Group
Study on operational
needs, in progress
Developer Impact Fee
(Assembly Bill 1600)
• Developing a formal
policy by 2027 to
guide prioritization
and expenditure of
Developer Impact
Fee revenues
• Next AB 1600
Findings Report due
in 2029 (required
every five years for
any unspent fees)
Public Works:
Stormwater Rate
Study Update
• Community survey:
May – June 2026
• Draft Rate Study
finalized September -
December 2026
• Prop 218 process
begins early 2027
• Ballot tabulation: July
2027
• If approved, new
revenues begin
January 2028
KCRT Fund
• Revenue from cable
subscribers declining
• General Fund
subsidy will be
needed at the end of
FY 2025-26
Next Steps
21 FY 2026-27 Final Budget Adoption June 2026
Draft FY 2026-27 Budget presentation on May 5, 2026
Quarter 3 Budget Report planned for May 2026
Measure E & K / Kids First Presentation on March 24, 2026 Staff recommend the City Council to approve the proposed mid-year budget adjustments as presented.
Recommended Action
22 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.
Thank You
&
Questions!
23 24
CalPERS: Long-Term Fiscal Risk
25 CalPERS: Long-Term Fiscal Risk (continued)
• Emily is working on a sensitivity analysis that shows how much our UAL payment can grow with one bad-normal investment year. Will be done by tomorrow morning.