May 26, 2026
Finance Department
DATE: May 26, 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
Antonio Banuelos, Accounting Manager
Jerry Gurule, Accounting Manager
Subject:
Budget Study Session on Proposed Fiscal Year 2026 -27
Operating Budget and Fiscal Year 2026 -31 Five -Year
Capital Improvement Plan and Department Presentations
FINANCIAL IMPACT: There is no financial impact to receiving this report.
PREVIOUS COUNCIL
ACTION:
On May 5, 2026, the City Council received the first draft of the Fiscal Year 2026-27 Annual Operating Budget and
Fiscal Year 2026-31 Five-Year Capital Improvement Plan, including departmental presentations from Community
Development, Police, and Public Works. On May 19, 2026, the City Council received an update on global market
conditions and presentations from Community Services
and Economic Development. Due to time constraints, the
Fire Department presentation was continued to the May
26, 2026 meeting.
STATEMENT OF THE
ISSUE:
City Staff are providing an update on financial and
operational considerations and departmental
presentations to the City Council as part of the ongoing development and review of the Fiscal Year 2026-27
Annual Operating Budget and Fiscal Year 2026-31 Five-
Year Capital Improvement Plan.
AGENDA
REPORT
May 26, 2026
RECOMMENDED ACTION:
RECEIVE the draft Fiscal Year 2026-27 Annual
Operating Budget and Fiscal Year 2026-31 Five-Year
Capital Improvement Plan Budget presentation;
RECEIVE updates on departmental operations and
services from the following departments: City Attorney’s Office, City Clerk’s Office, City Manager’s Office, Fire and Internal Services; and upon completion of departmental
presentations PROVIDE DIRECTION to staff prior to final budget adoption – City Manager’s Office/Finance
Department (Shasa Curl/Emily Combs/Mubeen Qader
510-412-2077).
DISCUSSION:
As is standard in local government and supported by the Richmond Charter and Richmond Municipal Code Section 2.61.010, the City Manager is required to submit a proposed budget to the City Council no later than the first Tuesday of May each year.
Richmond Municipal Code Section 2.61.010 states:
“Deadline for Submitting Proposed Budget to City Council No later than the first Tuesday of May of each year, the City Manager shall submit a proposed budget to the City Council for the succeeding fiscal year. The proposed budget shall set forth in detail an estimate of revenues, proposed expenditures and such other information as the City Manager concludes will enhance the budget process. The proposed budget shall be set forth in a format that allows for the widest possible public understanding of the City's resources, operations and programs.”
On May 5, 2026, the City Council received the first draft of the Fiscal Year (FY) 2026-27 Operating Budget and FY 2026-31 Capital Improvement Plan. The draft provided a balanced, baseline budget, with an approximate 12 percent vacancy rate. In addition, an initial overview of major cost drivers, long-term fiscal pressures, the City’s overall financial outlook, and $29.3 million in unfunded departmental requests.
In addition, City departments – Community Development, Police, and Public Works began providing in depth Study Session presentations with key performance indicators to ensure the City Council, respective City departments, residents, community-based organizations, businesses, and philanthropic partners are aware of the amazing direct services, projects, policies, grants, etc. that are being delivered on a daily basis to support and improve health outcomes in the Richmond community. The goal of these Study Session presentations is to highlight the incredible work and transformation that is taking place – Moving Richmond Forward.
May 26, 2026
City staff continues to present a balanced budget for the City Council’s consideration.
As such, any new requests will require a corresponding decrease in expenditure. Since FY 20-21, the City of Richmond has hired a net increase of 92 personnel to improve City services. Concurrently, interdepartmental collaboration has increased exponentially, as evidenced by the City of Richmond retaining over 155 grants, valued at over $328 million. This is exceptional work that is changing the trajectory of Richmond. It is with immense gratitude that we celebrate retaining grants that exceed the City’s annual general fund budget.
On May 19, 2026, City staff presented additional information on global economic conditions and departmental operations for Community Services and Economic Development, continuing the structured review of organizational capacity and service delivery impacts. Building upon those prior discussions, this Study Session presentation expands the analysis to include updated financial and economic context, including Richmond-specific economic trends, and year-end financial performance. The Study Session presentation also provides an overview of the City’s procurement requirements and compliance framework, the General Fund Five-Year Forecast, the full Capital Improvement Plan, and departmental updates for the remaining internal service and governance functions.
To support continuity and maintain visibility into the full budget development timeline, the Proposed FY 2026-27 Budget Schedule is repeated below. The schedule outlines the remaining steps in the review and adoption process, including the May 26 Budget Study Session, development of the Budget Checklist, and final budget adoption.
Figure 1: Key Budget Development Dates
Action/Activity Date
Receive Draft FY 2026-27 Operating Budget and FY 2026-31 Five-Year Capital Improvement Plan; Department Presentations (Community Development, Police, Public Works)
May 5, 2026
Master Fee Schedule; Department Presentations (Community Services and Economic Development) May 19, 2026
Budget Study Session on Proposed FY 2026-27 Operating Budget, FY 2026- 31 Five-Year Capital Improvement Plan and Five-Year Forecast; Department Presentations (City Attorney’s Office, City Manager’s Office, City Clerk’s Office, Fire, and Internal Services) and Develop Budget Checklist May 26, 2026
Budget Checklist Follow-up June 16, 2026
City Council to Adopt FY 2026-27 Operating Budget, FY 2026-31 Five-Year Capital Improvement Plan, and GANN Limit June 23, 2026
The May 26 Study Session continues the City Council’s review of the draft FY 2026-27 Operating Budget and FY 2026-31 Capital Improvement Plan (CIP) by focusing on the remaining components of the budget that have not yet been presented in detail. This includes the full CIP, which identifies major infrastructure needs over the next five years, as well as the General Fund Five-Year Forecast, which provides long-range fiscal projections based on known cost drivers, labor agreements, and economic conditions.
These materials support a more complete understanding of the City’s financial position
May 26, 2026
and help inform policy and resource allocation decisions as the budget development process advances.
City staff have also prepared updated summary materials to support the City Council’s review of the draft FY 2026-27 Operating Budget and FY 2026-31 CIP. These materials include revised revenue and expenditure summaries (Attachment 1 and Attachment 2), department level expenditure summaries (Attachment 3), detailed capital project and funding information (Attachment 4), updated multi-year position listings (Attachment 5), and the General Fund Five-Year Forecast (Attachment 6). Together, these attachments provide the City Council with the most current financial data and organizational information available at this stage of the budget development process.
In addition, City staff are presenting departmental updates from the City Attorney’s Office, City Manager’s Office, City Clerk’s Office, and Internal Services (Finance, Information Technology and Human Resources). These updates continue the structured departmental overview format introduced earlier in the budget cycle, highlighting each department’s core operations, key workload drivers, and service delivery impacts. This information is intended to provide the City Council and community with additional context regarding core service delivery and organizational capacity as budget deliberations continue.
City staff have also developed a set of analytical updates intended to frame the broader economic and fiscal environment in which the FY 2026-27 Operating Budget and the FY 2026-31 CIP are being prepared. The following section presents this contextual information, which is necessary to support a comprehensive and well-informed evaluation of the draft budget.
Economic and Fiscal Conditions Influencing the FY 2026–27 Budget
The economic and fiscal conditions outlined in this section provide essential context for understanding the external trends, internal financial dynamics, and structural factors influencing the development of the City’s budget.
Richmond, CA Unemployment Trends
Understanding recent labor market conditions is an important component of the City’s fiscal planning process. Shifts in employment levels influence consumer spending, sales and use tax collections, demand for municipal services, and the City’s broader economic resilience. To support the FY 2026-27 budget analysis, City staff reviewed recent unemployment data specific to Richmond, California, and compared local trends with statewide and national averages, as shown in Figure 2. These data, obtained from the U.S. Bureau of Labor Statistics and retrieved on May 19, 2026, provide context for evaluating the City’s near-term fiscal outlook and assist in forecasting revenue performance and service demand trends.
May 26, 2026
Figure 2: Unemployment Rates, Richmond vs. U.S.
Richmond, CA Median Home Sale Price Trends
Richmond’s median home sale prices have increased substantially over the past decade, rising from roughly $185,000 in 2011 to a peak of about $715,000 in 2024. In 2025 and 2026, prices levelled at approximately $650,000, remaining above pre-2020 values and supporting a stable long-term property tax base.
Recent price patterns align with broader Bay Area trends: exceptional growth through 2021–2022 followed by a shift toward steadier valuations as higher mortgage rates influenced buyer capacity. Even with this shift, current prices reflect continued regional demand and constrained supply.
Future housing activity will be influenced by key economic drivers such as federal interest rate policy, inflation trends, and global financial conditions. Changes in borrowing costs will play a central role in shaping buyer activity, investor confidence, and overall transaction volume. A lower rate environment could stimulate sales and support additional price growth, while persistently high rates or broader economic uncertainty may reinforce current, more stable price levels.
These dynamics have meaningful fiscal implications for the City:
Property tax revenues remain supported by elevated assessed values. Documentary transfer tax revenues may vary with changes in sales activity. Development feasibility depends on construction costs, financing conditions, and investor sentiment.
Affordability pressures continue to influence household spending and demand for City services.
Overall, Richmond enters the upcoming budget cycle with a housing market characterized by historically high values and sensitivity to national and global economic conditions that may affect sales activity and related City revenues.
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Richmond 10.9% 9.3% 7.5% 6.0% 5.1% 4.1% 3.3% 3.3% 2.9% 9.5% 4.8% 3.1% 4.2% 4.4% 4.6% U.S. 8.5% 7.9% 6.7% 5.6% 5.0% 4.7% 4.1% 3.9% 3.6% 6.7% 3.9% 3.5% 3.7% 3.7% 4.4%
2.0%
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6.0%
8.0%
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12.0%
Unemployment Rate
Calendar Year
May 26, 2026
Figure 3: Median Home Sale Price by Calendar Year, Richmond, CA
Year
Source: City staff compilation of publicly available housing market data, including Redfin, Zillow Research, and California A ssociation of Realtors historical trend data. Values are approximate.
Year-End Financial Performance in Alignment with Best Practices The Government Finance Officers Association recommends that local governments maintain positive year-end operating results as a best practice to support fiscal stability and avoid reliance on unsustainable or onetime funding sources. Consistent with this guidance, the City’s FY 2024-25 year-end results reflect sound financial management.
As reported on March 3, 2026, approximately $8.2 million in General Fund appropriations remained unspent at the end of FY 2025-26. The revised all funds budget totals more than $750 million, meaning the $8.2 million in unspent appropriations represents roughly 1 percent of overall appropriations. This variance is typical for an organization of Richmond’s size and is within an acceptable range.
The City also continues to comply with its General Fund Reserve Policy, maintaining a minimum reserve level equal to 21 percent of upcoming year General Fund expenditures. Maintaining a modest year-end operating margin is an important component of long-term fiscal stability, as it supports structural balance and reduces the likelihood that reserves or limited-term revenues will be required to sustain operations.
In years when such a margin does not occur, the City may need to draw down reserves or rely on onetime resources, which can reduce financial flexibility and weaken the City’s ability to respond to future economic changes. This positive year-end performance represents a significant shift for the City, which for decades experienced chronic financial instability and recurring deficits. The continued progress toward structural balance marks an important departure from that historic pattern and reflects the City’s strengthened fiscal management.
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2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Thousands
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General Fund Five-Year Forecast (High-Level Summary)
A complete version of the General Fund Five-Year Forecast is provided in Attachment 6, which includes detailed assumptions, growth factors, and year-by-year projections.
The following provides a high-level summary.
The General Fund Five-Year Forecast provides a long-range overview of projected revenues and expenditures for FY 20262-7 through FY 2030-31. It is intended to support informed fiscal planning and decision making. The forecast presents three scenarios: Pessimistic, Middle-of-Road, and Optimistic. These scenarios illustrate the range of potential financial outcomes that may occur under different economic conditions.
Across all scenarios, the forecast incorporates known revenue trends, current economic indicators, negotiated labor agreements, projected California Public Employees’ Retirement System (CalPERS) pension obligations, healthcare cost increases, and inflationary impacts on non-personnel expenses. Major cost drivers in the forecast include wage growth under approved labor Memoranda of Understanding (MOUs), projected increases in CalPERS pension and retiree healthcare obligations, healthcare premium increases, historical overtime usage, inflationary pressure on operating costs, staffing related factors such as vacancy rates, and potential cost impacts associated with Assembly Bill (AB) 1383 beginning in FY 2027-28.
Revenue projections reflect key categories such as property tax, sales and use tax, utility users tax, business license taxes, and fines and investment earnings. Expenditure projections reflect the costs associated with labor agreements, projected pension and retiree healthcare payments, and inflationary adjustments for operating and capital related materials and services.
Revenues from the City’s settlement agreement are presented separately in each scenario. These revenues are limited-term resources and are not included in ongoing General Fund revenue growth assumptions.
The forecast indicates that long-term fiscal conditions will depend on underlying revenue performance, personnel-related cost growth, and broader economic trends.
The City Council is also proceeding with a community engagement process to identify priorities for the use of the limited-term settlement revenues, which remain designated for one-time purposes. Full assumptions, growth factors, and detailed projections for all three scenarios are provided in Attachment 6, General Fund Five-Year Forecast.
May 26, 2026
Figure 4: Pessimistic Scenario, Five-Year Forecast
Revised
Budget Proposed Forecast Forecast Forecast Forecast
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Revenues 259,961,114 274,670,119 277,416,820 280,190,988 282,992,898 285,822,827 Expenditures 273,089,413 274,670,119 289,562,976 301,250,782 316,052,809 327,329,202 Net Deficit (-) /Surplus
(+) (13,128,300) - (12,146,156) (21,059,794) (33,059,911) (41,506,375) Limited-Term Revenue 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000 60,000,000 Contribution to Kids
First Initiative 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,800,000 Balance of Limited-
Term Revenue 48,500,000 48,500,000 48,500,000 48,500,000 48,500,000 58,200,000 Use of Fund Balance 13,128,300 - - - - -
Net Change with
Limited Term Revenue 48,500,000 48,500,000 36,353,844 27,440,206 15,440,089 16,693,625
Figure 5: Pessimistic Scenario, Five-Year Forecast
Figure 6: Middle-of-Road Scenario, Five-Year Forecast
Revised
Budget Proposed Forecast Forecast Forecast Forecast
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Revenues 259,961,114 274,670,119 279,205,568 288,248,443 297,021,762 305,929,527 Expenditures 273,089,413 274,670,119 287,808,291 298,200,510 311,593,989 321,341,296 Net Deficit (-)/Surplus
(+) (13,128,300) - (8,602,724) (9,952,067) (14,572,227) (15,411,769) Limited-Term Revenue 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000 60,000,000 Contribution to Kids First
Initiative 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,800,000 Balance of Limited-Term
Revenue 48,500,000 48,500,000 48,500,000 48,500,000 48,500,000 58,200,000 Use of Fund Balance 13,128,300 - - - - -
Net Change with
Limited-Term Revenue 48,500,000 48,500,000 39,897,276 38,547,933 33,927,773 42,788,231
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FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Millions
Expenditures Revenues Balance of Limited-Term Revenue
May 26, 2026
Figure 7: Middle-of-Road Scenario, Five-Year Forecast
Figure 8: Optimistic Scenario, Five-Year Forecast
Revised
Budget Proposed Forecast Forecast Forecast Forecast
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Revenues 259,961,114 274,670,119 288,403,625 302,823,806 317,964,996 333,863,246 Expenditures 273,089,413 274,670,119 289,498,244 298,638,947 310,694,772 319,613,762 Net Deficit (-)/ Surplus
(+) (13,128,300) - (1,094,620) 4,184,858 7,270,224 14,249,484 Limited-Term Revenue 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000 60,000,000 Contribution to Kids
First Initiative 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,800,000 Balance of Limited-
Term Revenue 48,500,000 48,500,000 48,500,000 48,500,000 48,500,000 58,200,000 Use of Fund Balance 13,128,300 - - - - -
Net Change with
Limited Term Revenue 48,500,000 48,500,000 47,405,380 52,684,858 55,770,224 72,449,484
Figure 9: Optimistic Scenario, Five-Year Forecast
Departmental Operations, Workload, and Service Delivery Impacts
In addition to the City’s long-range financial outlook, an understanding of departmental operations, workload drivers, and service delivery capacity is essential for evaluating the feasibility of the proposed Fiscal Year 2026-27 Operating Budget and the Fiscal $200
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FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Millions
Expenditures Revenues Balance of Limited-Term Revenue
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Expenditures Revenues Balance of Limited-Term Revenue
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Year 2026-31 CIP. The following section provides high-level updates from key departments to support the City Council’s review of organizational needs and operational considerations.
City staff are continuing the structured departmental overview format introduced on May 5, which highlights each department’s core operations, key workload drivers, service delivery impacts, and priority considerations for FY 2026-27. This framework is intended to provide the City Council and community with a clear and consistent understanding of the operational landscape across the organization as part of the broader budget development process.
City Attorney’s Office
Core Operations
The City Attorney’s Office provides essential legal services that support the City Council, Mayor, and all departments by delivering legal advice, drafting and reviewing ordinances, resolutions, contracts, and agreements, managing civil litigation, and coordinating with departments and outside counsel. The office also handles subpoenas, prepares legal opinions, provides Brown Act Training and Ethics Training, supports the processing of Public Records Act (PRA) requests, and staffs boards and commissions, which include the Planning Commission, Design Review Board, and Community Police Review Commission. These core functions ensure legal compliance, reduce risk, and enable effective and transparent City operations.
Operational Demands
Operational demands on the City Attorney’s Office continue to intensify as staff manage heavy volumes of legal reviews, Public Records Act responses, subpoenas, litigation, and complex interdepartmental requests that span every major City function. With core responsibilities already consuming more than the department’s full capacity, additional priorities such as ongoing housing, public safety, and economic development initiatives further strain limited legal resources. The growing number of contracts, policy updates, compliance requirements, and board and commission obligations require sustained attorney time and frequent coordination across departments. These cumulative pressures leave little room for proactive legal work, long-term planning, or internal process improvements, forcing the office to operate in a largely reactive mode to keep essential legal services moving.
Service Delivery Impacts
Service delivery in the City Attorney’s Office is constrained by limited staffing and high volumes of legal reviews, Public Records Act inquiries, subpoenas, and litigation demands. With core duties already exceeding available capacity, attorneys must prioritize urgent matters, resulting in slower turnaround times, reduced proactive legal work, and greater reliance on outside counsel. These pressures hinder the department’s ability to support City operations efficiently and consistently, leading to delays in policy development, contract reviews, and board and commission support.
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City Clerk’s Office
Core Operations
The City Clerk’s Office provides essential legislative and administrative services that ensure transparent and compliant government operations. Core responsibilities include processing public records requests, claims, subpoenas, and board or commission applications; administering municipal elections; managing City Council meeting agendas and ensuring Brown Act compliance; maintaining and publishing ordinances, resolutions, and official legislative records; and serving as a Passport Acceptance Facility for the community. These functions uphold transparency, public access, and the legal integrity of City government.
Operational Demands
Although the City Clerk’s Office faces significant operational demands to deliver core responsibilities such as processing public records requests, administering elections, managing City Council meeting agendas, and maintaining legislative records, they do their best to provide the service with the same limited staffing resources. The area that presents a current challenge is the rapid growth in public records requests. Additional help in this area in the form of an additional position or two part-time staff is very much appreciated.
Service Delivery Impacts
Service delivery within the City Clerk’s Office is significantly affected by the sharp rise in Public Records Act requests
City Manager’s Office
Core Operations
The City Manager’s Office supports the City Manager, the City's Chief Executive Officer, to implement the policy direction of the City Council. She provides executive leadership and citywide coordination, supporting daily municipal operations, implementing City Council priorities, ensuring strong fiscal stewardship, including promoting a grant- seeking culture, and overseeing organizational planning. Core responsibilities include development and coordination of the City’s operating and capital budgets; implementation oversight for City Council-directed initiatives; interdepartmental operational coordination; strategic planning; emergency and continuity coordination; labor negotiation support; regional and intergovernmental partnerships; and oversight of major citywide initiatives and infrastructure projects.
The department also coordinates organizational improvement efforts, modernization initiatives, implementation tracking, community engagement support, and operational response activities involving multiple departments and external agencies. These functions help ensure continuity of city services, alignment with Council priorities, operational accountability, and long-term organizational sustainability.
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Operational Demands
Operational demands on the City Manager’s Office continue increasing as staff coordinates multiple citywide priorities, infrastructure initiatives, fiscal stabilization efforts, emergency response activities, modernization projects, and City Council- directed implementation efforts simultaneously across the organization. Major ongoing responsibilities include wastewater reliability and Veolia transition initiative, citywide capital improvement and park renovation projects, homelessness response coordination, enterprise modernization efforts, labor negotiations, fiscal sustainability planning, and interdepartmental implementation oversight across multiple service areas.
In addition to supporting daily operational coordination and City Council implementation efforts, the department continues to manage increasing regulatory requirements, community response issues, regional coordination responsibilities, grant and funding coordination efforts, and emerging organizational priorities requiring rapid response and cross-departmental alignment. As organizational responsibilities and implementation efforts continue evolving across multiple priority areas, maintaining momentum on long- term organizational improvement, modernization initiatives, strategic planning efforts, and proactive operational coordination increasingly requires thoughtful sequencing, alignment, and sustained organizational focus.
Service Delivery Impacts
Growing operational demands and limited coordination capacity continue affecting the City Manager’s Office ability to proactively advance long-term organizational improvement efforts while maintaining continuity of daily city operations and implementation responsibilities. As staffing resources are redirected toward urgent operational issues, infrastructure coordination, emerging City Council priorities, emergency response activities, and City-wide implementation efforts, proactive planning, modernization initiatives, performance improvement efforts, and long-range strategic coordination activities may experience delays.
These conditions increase reliance on reactive operational coordination and compress implementation timelines across multiple departments and initiatives simultaneously.
Service delivery impacts may include slower advancement of modernization and organizational improvement efforts, reduced flexibility to proactively respond to emerging priorities, delayed implementation sequencing for City-wide initiatives, and reduced capacity for long-range operational planning and process improvement efforts.
The City Manager’s Office continues supporting coordinated implementation of City Council priorities, fiscal stewardship, operational continuity, and organizational alignment across City service areas while advancing long-term planning and service improvement efforts.
Internal Services
Core Operations
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The Finance Department delivers the core financial operations that keep the City functioning, including accounting, budgeting, payroll, procurement, revenue administration, treasury management, and accounts payable. These services ensure accurate financial reporting, timely payments, compliant purchasing, effective budget oversight, and responsible cash and investment management that support all City departments and community services.
The Information Technology (IT) Department maintains the City’s critical technology infrastructure by managing network and server operations, cybersecurity, enterprise applications, and technology systems that support public safety and City meetings. IT also provides help desk and end-user support to ensure staff have reliable technology, connectivity, and access to essential tools and training.
The Human Resources Department delivers critical workforce and organizational support services that enable the City to attract, develop, and retain a high-performing workforce. Key accomplishments and responsibilities include leading labor negotiations and employee relations for eight labor unions; overseeing recruitment, onboarding, benefits, retirement, workers’ compensation, insurance compliance for contract, and leave administration; and ensuring compliance with state and federal labor laws and workplace safety requirements. The department also manages classification and compensation programs, updates personnel policies, delivers employee training and professional development programs, promotes employee engagement and wellness initiatives, and provides administrative support to the Personnel Board and Community Police Review Commission. Through these efforts, Human Resources supports operational continuity, organizational resilience, and effective delivery of City services.
Operational Demands
Operational demands on the Finance Department continue to increase as staff manage high-volume, time-sensitive responsibilities across procurement, budgeting, accounting, revenue collection, and treasury functions. The department has successfully advanced major initiatives including the e-procurement rollout, vendor compliance enhancements, targeted revenue audits, and business license modernization efforts. At the same time, staff continue to meet expanding audit, regulatory, debt management, and City-wide policy support requirements while maintaining uninterrupted core financial operations.
The Information Technology Department faces growing operational demands as it maintains City-wide network reliability, supports enterprise systems, and strengthens cybersecurity protections. IT continues to support major modernization initiatives, including enterprise system upgrades, cloud migration efforts, and critical public safety technologies, while managing increasing service requests, device lifecycle replacements, and evolving digital service expectations. Despite aging infrastructure and limited staffing resources, the department continues to sustain essential operations and advance key modernization and security priorities.
Operational demands on the Human Resources Department continue to increase as
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staff balance core personnel services with expanding compliance requirements and City-wide strategic initiatives. In addition to daily operations involving labor relations, negotiations, workers’ compensation, leave management, training, policy development, and safety compliance, the department is leading several major organizational improvement efforts. Current initiatives include implementing an automated employee evaluation system, developing classification-based training programs, modernizing leave tracking systems, supporting the Richmond Race Equity Action Plan, and assisting with the creation and staffing of new City programs and divisions, including the Community Crisis Response Program (Reah Out with Compassion and Kindness - R.O.C.K.) Program and the Fire Department’s Advanced Life Support (ALS) Program. Human Resources also maintains compliance with evolving Cal-OSHA, OSHA, Department of Industrial Relations, and labor law requirements while supporting broader City priorities related to public safety, housing, economic development, and infrastructure. At the same time, Risk Management operations face growing insurance and compliance obligations while operating with limited staffing due to a Risk Manager vacancy. These conditions constrain the department’s ability to proactively implement operational improvements and strengthen risk mitigation efforts.
Service Delivery Impacts
The Finance Department’s high workload and limited staffing capacity impact service delivery by increasing processing times and reducing the department’s ability to focus on proactive financial planning and modernization efforts. Staff continue to prioritize critical responsibilities including audit preparation, procurement support, revenue compliance, and City Council-driven initiatives, often delaying longer-term improvements such as financial modeling, process automation, and internal control enhancements. Despite these constraints, the department continues to maintain essential fiscal oversight and support City operations.
The Information Technology Department’s service delivery is challenged by increasing cybersecurity demands, aging infrastructure, and growing City-wide technology needs.
As resources are directed toward urgent operational and security issues, planned upgrades, modernization projects, and lower-priority support requests may experience delays. These capacity constraints limit opportunities for proactive maintenance and service expansion, while IT continues to maintain critical systems and support daily City operations.
The Human Resource Department’s Growing operational demands and limited staffing capacity continue to impact service delivery across recruitment, labor and employee relations, compliance, training, and risk management functions. Staff must prioritize urgent operational needs, which can delay strategic initiatives, policy modernization, workforce planning, and process improvement efforts. Risk Management functions are particularly affected by staffing limitations and increased compliance requirements, resulting in delays in contract insurance approval, return-to-work coordination, and proactive safety and injury prevention programs. These challenges also affect frontline operations, including Public Safety and Public Works, where extended employee leaves can contribute to overtime costs and service delivery impacts. Despite these
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constraints, the department continues to support critical City operations and major organizational initiatives. Additional staffing resources would enhance service delivery, strengthen compliance oversight, expand employee development opportunities, improve workforce planning, and support continued modernization of Human Resources systems.
Five-Year Capital Improvement Program (CIP) and Programmatic Framework
The City’s Capital Improvement Program (CIP) outlines a strategic, long-range financial and physical plan designed to maintain, enhance, and transform Richmond’s public infrastructure over the next five fiscal years, covering FY 2026-27 through FY 2030-31. Rather than reviewing capital investments as isolated projects, City staff implements a structured programmatic approach that organizes municipal assets into several distinct, mission-driven programs. These programs explicitly target critical local infrastructure needs across the city and can be outlined through 8 categories:
1. Equipment Services
2. General and Public Safety Facilities
3. Parks & Open Spaces
4. Port of Richmond
5. Sanitary Sewer/Wastewater
6. Storm Drainage and Watershed
7. Transportation
8. Technology
By grouping municipal capital projects systematically under these 8 categories, City staff can better optimize logistical workflows, maximize economies of scale during procurement cycles, and tightly align multi-year physical investments with the long- term policy objectives set forth in the City Council’s Strategic Goals.
CIP Implementation Strategy and Data-Driven Program Planning An immediate, primary operational goal of the CIP is to successfully deliver and clear the current backlog of legacy and previously adopted capital projects. Concurrently with this effort, program leads are actively working toward developing a data-driven plan. To build this roadmap, staff are working to analyze existing information, including previously adopted master plans, targeted engineering studies, condition assessments, requests, and institutional staff knowledge. The goal is to map out the need with existing staff capacities and operational workloads to ensure realistic, achievable delivery timelines.
City staff recognize that certain core programs require additional data to refine future project recommendations. Specifically, completing a comprehensive Facility Conditions Assessment and an update to the Parks Master Plan are critical upcoming milestones.
Securing and analyzing this data will allow program leads to transition from a baseline execution model to a fully optimized, data-driven multi-year plan that precisely targets municipal resources toward the areas of greatest need.
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CIP Fiscal Resource Allocation: Funded, Partially Funded, and Unfunded Needs
While the five-year plan establishes a strategic direction for the main programs, execution is fundamentally constrained by available financial resources. Fully and partially funded projects utilize a mix of local revenue resources—including Gas Tax, Road Maintenance Rehabilitation Account (RMRA), Measure J, specialized Impact Fees (Open Space, Library, Wastewater), and General Capital monies, which are aggressively paired with external Outside Funded Grants and Engineering Grants to stretch municipal dollars. Without increased funding and/or formal commitments, it makes it difficult to capital plan for a program where the immediate infrastructure needs heavily outweigh available funds.
Richmond’s Procurement Requirements and Contracting Procedures
Effective implementation of both the operating budget and the Five-Year Capital Improvement Program depends on consistent adherence to the City’s procurement requirements. These rules serve as essential budgetary controls that protect public resources, ensure transparency, and maintain compliance with legal and audit standards.
Richmond’s procurement framework, established in Chapter 2.52 of the Municipal Code and related ordinances, sets approval thresholds, bidding requirements, and internal controls. Contracts over $10,000 require City Council approval, while the City Manager may execute contracts of $10,000 or less. Additional ordinances, including the Business Opportunity, Local Employment, and Living Wage ordinances, further guide contracting practices.
Purchases under $50,000 require written quotes. Purchases of $50,000 or more must follow a formal competitive process. This means the City publicly advertises the opportunity, vendors submit sealed bids or proposals, and City staff evaluate them against clear and published criteria. This ensures fairness, transparency, and the best value for the community.
Sole source and emergency purchases must be justified in writing and splitting or retroactively approving purchases is prohibited. When procurement procedures are not followed, the City faces significant risks such as delayed vendor payments, audit findings, loss of grant eligibility, and challenges to the validity of contracts. Consistent compliance protects public funds, strengthens trust, and ensures that contracting decisions withstand legal and audit review.
May 26, 2026
Figure 10: Compliant Procurement
NEXT STEPS
City staff will continue refining the draft FY 2026-27 Operating Budget and FY 2026-31 Five-Year Capital Improvement Plan based on City Council direction and updated financial information. The next step in the budget development process is the June 16, 2026, Budget Study Session, where staff will present the City Council Budget Checklist.
The FY 2026-27 Operating Budget and FY 2026-31 Five-Year Capital Improvement Plan are scheduled for City Council consideration and adoption on June 23, 2026. The Budget Checklist, containing City Council questions and City staff responses from the May 5, 2026, City Council meeting, is attached as Attachment 7.
DOCUMENTS ATTACHED:
Attachment 1 – Draft Summary of Revenues, by Fund, by Type Attachment 2 – Draft Summary of Expenditures, by Fund, by Type Attachment 3 – Draft Summary of Expenditures, by Fund, by Department Attachment 4 – Draft Capital Improvement Plan Budget & Forecast Summaries Attachment 5 – Draft Multi-Year Comparative Position Listing Attachment 6 – General Fund Five-Year Forecast
Attachment 7 – Draft City Council Budget Checklist
Attachment 8 – Draft Presentation