General Fund Five-Year Forecast
General Fund Five Year Forecast
Fiscal Year 2026-27 through Fiscal Year 2030-31
City of Richmond, California
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General Fund Five-Year Forecast
This document provides an overview of the City’s fiscal projections for the City Council as they prepare for upcoming budgetary decisions. It serves to inform council members about expected trends in revenues and expenditure, offering insight into factors that may influence long-term financial planning.
The five-year forecast includes three distinct scenarios that outline projected trends for both revenues and expenditures. These scenarios: pessimistic, Middle-of-Road, and optimistic are created to help the City Council assess potential outcomes under varying economic conditions, providing a structured long-term vision of the City’s fiscal direction.
Revenue Assumptions
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he General Fund revenue forecast is based on a comprehensive review of all major revenue categories and historical performance trends. City staff evaluated economic indicators, recent collection patterns, and external inputs to develop assumptions for each revenue source under the Middle of the Road scenario. Annual growth assumptions for all three scenarios (Pessimistic, Middle of the Road, and Optimistic) are presented in Figure
1. These scenario ranges provide a structured view of potential revenue outcomes over the five-year forecast period and support long-term fiscal planning.
Figure 1: General Fund Revenue Growth Percentage Assumptions Scenario FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Pessimistic Proposed Budget 1.0% 1.0% 1.0% 1.0%
Middle-of-Road Proposed Budget 2.5% 3.2% 3.0% 3.0%
Optimistic Proposed Budget 5.0% 5.0% 5.0% 5.0%
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he General Fund Revenue Forecast is based on a detailed review of all General Fund Revenue categories and sources. Each category’s revenue can vary annually based on multiple factors. City staff analyzed historical trends, economic trends, and external inputs to develop these revenue assumptions.
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roperty Tax – Revenues in this category are projected to increase by 3 percent in assessed valuation annually beginning in FY 2026–27. Revenue growth in this category is estimated at 3.1 percent in FY 2026–27, followed by an average annual increase of 2.7 percent. Historic growth has averaged 2 percent over the last three years. Significant variations may occur due to valuation changes at large commercial properties or major real estate transactions. Revenues also include Successor Agency Surplus funds, which fluctuate depending on the relationship between incremental revenues and associated expenditures.
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ales Tax – Revenues in this category, which include Bradley Burns sales tax and all voter approved local sales tax measures, are projected to grow by 5.4 percent in FY 2026–27. Average annual growth of approximately 2.1 percent is projected in subsequent years. These estimates incorporate consultant analysis and reflect uncertainty related to Attachment 6 – General Fund Five-Year Forecast
General Fund Five Year Forecast
Fiscal Year 2026-27 through Fiscal Year 2030-31
City of Richmond, California
tariffs, consumer spending, and federal fiscal policy. The Vehicle License Fee (VLF) Backfill Swap is tied to assessed valuation growth and follows the same trend assumptions applied to secured property taxes.
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ility Users Tax (UUT) – Revenues in this category are projected to grow 6.2 percent in FY 2026–27 and average 4.7 percent annually thereafter. Declines in cable and telecommunications revenue are offset by increases in gas and electricity revenue.
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ther Taxes – This category is projected to remain flat in FY 2026-27 and grow an average of 1.8 percent in subsequent years. The Documentary Transfer Tax forecast reflects average annual collections since adoption of the tiered tax structure, with budgeted allocations following the methodology outlined in the City Council-approved Guiding Fiscal Policies (approved on April 20, 2021).
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icenses, Permits & Fees – Growth in this category is projected at 6.3 percent for FY 2026-27 and 2.9 percent annually thereafter. Business License Taxes, now based on gross receipts per Measure U, provide improved predictability. Forecasts incorporate prior- year payment patterns and inflation adjustments.
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ther categories include Fines & Forfeitures, Rental Income, Charges for Services, Grants, and Intergovernmental - These revenues are collectively expected to grow by 14 percent in FY 2026–27 before stabilizing at 1 percent per year. The spike in FY 2026–27 is primarily due to projected increases in fines and investment earnings. Each category specific growth factor can be found in Figure 2 below.
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perating Transfers In – Transfers to the General Fund come primarily from the Pension Tax Override Fund. Transfers are projected to increase 4.4 percent in FY 2026-27 and average 2.04 percent in subsequent years, with fluctuations reflecting both valuation growth and pension-related expenditure requirements.
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ettlement Agreement (Limited-Term Revenue) – Beginning in FY 2025-26, the City will receive annual payments of $50 million for five years, followed by $60 million annually for an additional five years, totaling $550 million over the term of the settlement. These revenues are treated as limited-term resource and are presented as a separate line item in all forecast scenarios.
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he projected General Fund revenue assumptions for Middle-of-Road FY 2026-27 through FY 2030-31 are listed in Figure 2. This projections exclude the fixed annual revenues from the Settlement Agreement funds.
Attachment 6 – General Fund Five-Year Forecast
General Fund Five Year Forecast
Fiscal Year 2026-27 through Fiscal Year 2030-31
City of Richmond, California
Figure 2: Five-Year Revenue Forecast Middle -of-Road Scenario Assumptions CATEGORY FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 30 - PROPERTY TAXES 3.10% 2.74% 2.74% 2.74% 2.75%
31 - SALES & USE TAXES 5.44% 1.87% 2.55% 2.31% 2.00%
32 - UTILITY USERS TAXES 6.21% 4.66% 5.07% 4.64% 4.67%
33 - OTHER TAXES 0.00% 1.91% 1.19% 1.94% 1.98%
34 - LICENSES, PRMITS & FEES 6.28% 2.87% 2.87% 2.88% 2.88% 35 - FINES & FORFEITURES 280.00% 1.05% 1.09% 1.14% 1.18% 36 - USE OF MONEY&PROPRTY 16.50% 0.00% 0.00% 0.00% 0.00% 37 - CHARGES FOR SERVICES 1.72% 3.00% 3.00% 3.00% 3.00% 38 - OTHER REVENUE 9.01% 0.00% 0.00% 0.00% 0.00%
39 - RENTAL INCOME -3.10% 2.00% 2.00% 2.00% 2.00%
3A - INTERGOV STATE TAXES 0.00% 0.00% 0.00% 0.00% 0.00% 3C - INTERGOV STATE GRANT 27.78% 0.00% 0.00% 0.00% 0.00% 3D - INTERGOV OTHER GRANT 0.00% -13.79% 0.00% 0.00% 0.00% 60 - PROC FR SLE PROP 0.00% 0.00% 0.00% 0.00% 0.00%
61 - LOAN/BOND PROCEEDS 0.00% 0.00% 0.00% 0.00% 0.00%
90 – OPERATING TRANSFER IN 4.42% -1.91% 4.36% 2.86% 2.86%
GENERAL FUND REVENUE
TOTALS 4.76% 2.52% 3.24% 3.04% 3.00%
Expenditure Assumptions
The General Fund Expenditure Forecast reflects anticipated costs associated with maintaining current service levels and labor agreements. Assumptions incorporate approved labor Memorandum of Understanding (MOUs), projected retirement and healthcare obligations, and inflationary impacts on non-personnel expenses. These estimates are based on known contractual commitments, actuarial valuations, and historical spending patterns, providing a comprehensive view of expected cost drivers over the next five years.
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alaries and Benefits – The forecast includes costs associated with City Council– approved MOUs for Local 21 Mid-Management and Executive Management, Local 1021 SEIU General Employees, and Local 188 Fire Fighters. These agreements, effective July 1, 2025 through June 30, 2028, include annual salary increases of 5 percent beginning July 1, 2025. Longevity pay provisions vary by bargaining unit and are detailed in Figure 3.
City staff also assumed an additional 2 percent annually across all units for step increases, acting assignments, and other forms of additional compensation.
Figure 3: Longevity Tiers for Local 21 Mid-Management and Local 1021-SEIU- General Employees, Local 188 Fire Fighters Service Years Local 21
Mid-Management
Local 1021
SEIU General
Local 188
Fire Fighters
Upon completion of 5 years of permanent service - - 2%
Upon completion of 10 years of permanent service 1% 1% 4.5% Upon completion of 15 years of permanent service 3% 3% 7% Upon completion of 20 years of permanent service 5% 5% 9% Attachment 6 – General Fund Five-Year Forecast
General Fund Five Year Forecast
Fiscal Year 2026-27 through Fiscal Year 2030-31
City of Richmond, California
The salaries and wages forecast assumes an additional 2 percent across all bargaining units for annual step increases, acting pay, and other additional compensation.
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vertime Costs – The forecast includes assumptions related to historical usage of overtime City-wide as well as any known cost impacts resulting from approved MOUs and ongoing labor negotiations.
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etirement Costs – The forecast incorporates assumptions from the most recent actuarial valuation reports published by California Public Employees’ Retirement System (CalPERS) in July 2025. Based on the actuarial valuation reports, the City’s Normal Cost is projected to gradually decline over time as new employees are hired into lower-cost benefit tiers under existing pension regulations. However, the City’s Unfunded Accrued Liability (UAL) will increase over the next few years mainly due to lower-than-expected return on investment in prior years. The CalPERS projection of pension costs is based on comprehensive actuarial assumptions and actual experience can be significantly different than these assumptions. It is anticipated that these costs will increase based on approved MOUs.
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alPERS projections assume all actuarial assumptions are achieved, including a 6.8% annual investment return beginning in FY 2024-25. The forecast also assumes normal cost rates will gradually decline over time as employees enter lower-cost benefit tiers.
Actual future contribution requirements may vary depending on investment performance, actuarial experience, and future changes to benefits or funding assumptions.
Figure 4: Miscellaneous Plan, Projected Employer Contributions Per CalPERS Actuarial Valuation - June 30, 2024 Required
Contribution (Assumes 6.80% Return)
Fiscal Year FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Normal Cost % 12.6% 12.23% 11.8% 11.4% 11.1% 10.8%
UAL Payment $12,200,719 $14,618,122 $15,250,000 $17,032,000 $17,249,000 $17,402,000 Figure 5: Safety Plan, Projected Employer Contributions Per CalPERS Actuarial Valuation - June 30, 2024 Required
Contribution (Assumes 6.80% Return)
Fiscal Year FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Normal Cost % 22.0% 21.27% 20.6% 20.0% 19.4% 18.8%
UAL Payment $21,090,447 $22,932,195 $23,889,000 $26,226,000 $26,590,000 $26,878,000 T
he UAL is the present value of future employer contributions for service that has already been earned (retirees) and is in addition to future Normal Cost contributions for active members. See Figure 4 and 5 for Miscellaneous and Public Safety employees respectively.
Attachment 6 – General Fund Five-Year Forecast
General Fund Five Year Forecast
Fiscal Year 2026-27 through Fiscal Year 2030-31
City of Richmond, California
The forecast incorporates three scenarios for the estimated fiscal impact of the proposed California Assembly Bill (AB) 1383. The bill proposes significant changes to the Public Employees’ Pension Reform Act (PEPRA) by raising pensionable compensation limits and expanding retirement formula options for public safety employees. If AB 1383 is approved, it will result in higher pension costs for the City. The forecast incorporates three scenarios as follows in the forecast starting from FY 2027-28.
Figure 6: AB 1383 Estimated Fiscal Impact
Scenario FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Pessimistic - $884,822 $920,215 $957,024 $995,305
Middle-of-Road - $404,362 $420,536 $437,358 $454,852
Optimistic - $151,355 $157,409 $163,705 $170,254
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eadcount – The forecast generally assumes no significant expansion in authorized staffing levels beyond FY 2026-27. The FY 2026-27 Draft Operating Budget includes 811 Full Time Equivalent (FTE) positions City-wide. Expenditure assumptions reflect current staffing levels, position control assumptions, and negotiated labor agreements approved to date. Due to ongoing labor negotiations, the forecast does not include potential compensation changes for the remaining bargaining units, including the Richmond Police Officer’s Association (RPOA), Richmond Police Management Association (RPMA), and Richmond Fire Management Association (RFMA).
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he draft budget assumes a City-wide vacancy rate of approximately 12% to 14% , resulting in estimated vacancy savings of approximately $16.4 million. These vacancy savings are a key component of the City’s balancing strategy and are necessary to maintain a balanced General Fund budget in FY 2026-27. While vacancy savings provide near-term budgetary flexibility, sustained vacancies may create operational constraints and service delivery impacts as departments continue managing increasing workloads and service demands.
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ealthcare and Other benefits – Healthcare costs are based on the current rate sheets provided through CalPERS health plans. For FY 2026-27, City-wide healthcare expenditures are projected to total ~ $20.8 million, reflecting an estimated 8.2 percent increase over the prior year. from healthcare providers. Retiree healthcare costs and Other Post Employment Benefits (OPEB) contributions are also projected to increase significantly based on updated actuarial valuations and healthcare cost assumptions. The combined annual required contribution for the City-wide OPEB plans is projected at approximately $3.0 million in FY 2026-27. For FY 2027-28 and beyond, healthcare and related benefit cost increases are assumed to increase between 3 percent to 5 percent in these three scenarios.
In
flation – The non-personnel costs in the forecasted expenditures use an inflation rate of 4 percent as listed in Table 5 below.
Attachment 6 – General Fund Five-Year Forecast
General Fund Five Year Forecast
Fiscal Year 2026-27 through Fiscal Year 2030-31
City of Richmond, California
Figure 7: Non-Personnel Expenditure Assumptions
Scenario FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Pessimistic
Adopted
Budget 5% 5% 5% 5%
Middle-of-Road Adopted
Budget 4% 4% 4% 4%
Optimistic Adopted
Budget 3% 3% 3% 3%
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hese scenarios are intended to provide the City Council with a comprehensive view of how both the limited-term revenue and wage growth assumptions could affect the City’s long-term financial position.
Figure 8: 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 9: Pessimistic Scenario, Five-Year Forecast
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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
Attachment 6 – General Fund Five-Year Forecast
General Fund Five Year Forecast
Fiscal Year 2026-27 through Fiscal Year 2030-31
City of Richmond, California
Figure 10: 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
Figure 11: Middle-of-Road Scenario, Five-Year Forecast
Figure 12: 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
$200
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$260
$280
$300
$320
$340
$360
$380
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
Attachment 6 – General Fund Five-Year Forecast
General Fund Five Year Forecast
Fiscal Year 2026-27 through Fiscal Year 2030-31
City of Richmond, California
Figure 13: Optimistic Scenario, Five-Year Forecast
$200
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$400
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