June 23, 2026
City Manager's Office
Finance Department
DATE: June 23, 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: Fiscal Year (FY) 2026-27 Operating Budget and FY 2026- 27 to FY 2030-31 Five-Year Capital Improvement Plan
FINANCIAL IMPACT: Adoption of the Fiscal Year (FY) 2026-27 Proposed Operating Budget and the FY 2026-27 to 2030-31 Five-
Year Capital Improvement Plan does not create a
financial impact outside of what is already included and accounted for within the proposed budgets. The
proposed General Fund revenue budget is $324,670,119
with expenditures totaling $276,170,119. FY 2026-27
non-General Fund budgets include $271,560,669 in
revenue and $360,883,331 in expenditures.
PREVIOUS COUNCIL
ACTION:
May 5, 2026
May 19, 2026
May 26, 2026
June 9, 2026
June 16, 2026
STATEMENT OF THE
ISSUE:
In accordance with the Richmond Municipal Code
Sections 2.61.010 and 2.61.020, the City Manager is
submitting the Fiscal Year (FY) 2026-27 Proposed
Operating Budget and the Proposed FY 2026-27 to FY
2030-31 Five-Year Capital Improvement Plan Budget to
the City Council for adoption.
AGENDA
REPORT
June 23, 2026
RECOMMENDED ACTION:
ADOPT resolutions approving: (1) Fiscal Year (FY) 2026- 27 Proposed Operating Budget, and (2) FY 2026-27 to
FY 2030-31 Proposed Five-Year Capital Improvement
Plan Budget – City Manager’s Office/Finance Department
(Shasa Curl/Emily Combs/Mubeen Qader 510-412-
2077).
DISCUSSION
Budget Development Process
The Fiscal Year (FY) 2026-27 budget development process included a structured series of public City Council meetings between May 5 and June 16, 2026. These meetings provided the City Council and the community with multiple opportunities to review the draft Operating Budget, the Five-Year Capital Improvement Plan (CIP), departmental operations, the General Fund Forecast, and key policy considerations.
In addition to the City Council budget review meetings summarized in Table 1 below, City staff also held three community budget meetings, including one with the Richmond Neighborhood Coordinating Council in April, providing residents with opportunities to learn about the budget, ask questions, and share input on funding priorities.
Table 1: Summary of FY 2026-27 Budget Review Meetings
Date Meeting Purpose Key Topics Reviewed
May 5, 2026 Introduction of Draft Budget (per RMC
2.61.010)
City Manager submitted draft FY 2026-27
Operating Budget and FY 2026-31 CIP; initial
departmental presentations (Community
Development, Police, Public Works).
May 19, 2026 Continued Departmental Presentations
Presentations from Community Services,
Economic Development, Fire; updates on global
market conditions and operational considerations.
May 26, 2026 Budget Study Session
Full Five-Year CIP, General Fund Five-Year
Forecast, additional departmental updates (City
Attorney, City Clerk, City Manager, Internal
Services).
June 9, 2026 Special Budget Study Session
Reviewed balanced budget & FY 2026-31 CIP;
discussed Option 1 and Option 2; identified
project shortfalls (Richmond Wellness Trail II, SF
Bay Trail at Point Molate, Shields-Reid Park,
Wendell Park).
June 16, 2026 Final Review Prior to Adoption
City staff presented funding alternatives to close
CIP shortfalls; City Council provided final direction
for June 23 adoption materials.
Following the structured review process, the City Council continued its evaluation of the draft budget at the June 9, 2026, Special Budget Study Session. As part of that
June 23, 2026
discussion, the City Council was presented with two approaches for finalizing the budget. Option 1 reflected the proposed balanced budget and maintained all existing service levels and initiatives. Option 2 identified areas that could be considered for potential reprioritization while still maintaining a balanced budget. These options helped frame the remaining considerations needed to complete the budget process.
At the June 9, 2026, City Council meeting, the City Council directed City staff to conduct additional analysis of the CIP to identify feasible strategies for addressing the remaining $2.7 million in project shortfalls (Richmond Wellness Trail Phase II, San Francisco Bay Trail at Point Molate, Shields-Reid Park, and Wendell Park). This work included reviewing project schedules, scopes, funding restrictions, and opportunities for deferral or alternative funding. These options were presented during the June 16, 2026, City Council meeting, where the City Council reviewed the near final FY 2026-27 Operating Budget and FY 2026-31 CIP and provided the direction needed to prepare the materials for final adoption.
The proposed FY 2026-27 Budget now reflects the guidance provided by the City Council on June 16, 2026, and aligns with the City’s fiscal policies for long term sustainability, structural balance, and responsible stewardship of public resources.
Consistent with Government Finance Officers Association (GFOA) best practices, the final budget emphasizes transparency, accountability, and alignment with adopted City Council Goals and Priorities. The balanced Operating Budget maintains status quo service levels and supports priority investments identified throughout the budget development process.
SUMMARY
The proposed FY 2026-27 Operating and Capital expenditure budgets total $637,053,449, of which $276,170,119 is from the General Fund and $360,883,331 is from non-General Fund sources.
General Fund: The proposed FY 2026-27 budget $324,670,119 in revenue, which includes $48,500,000 in limited-term revenue. Proposed General Fund expenditures total $276,170,119.
Per City Council direction on April 28, 2026, the City will conduct a separate community engagement process, led by a qualified consultant, to gather input and develop recommendations on how these limited-term funds should be prioritized and used. This process is designed to ensure broad community participation, transparency, and alignment with long-term community priorities. Through this effort, residents and stakeholders will help identify one-time investments, spending principles, and priority areas for City Council consideration.
Table 2 illustrates the changes in total General Fund revenues and expenditures from the Draft Budget presented on May 5, 2026, through June 23, 2026.
June 23, 2026
Table 2: Proposed General Fund Budget
General Fund FY 2025-26
Revised Budget
FY 2026-27
Proposed Draft
Budget
May 5, 2026
FY 2026-27
Proposed Draft
Budget
June 16, 2026
FY 2026-27
Proposed Draft
Budget
June 23, 2026
Total Revenues (309,961,114) (323,836,742) (324,670,119) (324,670,119) Total Expenditures 274,589,413 275,336,742 276,170,119 276,170,119 Net (-Surplus)/+Deficit (35,371,700) (48,500,000) (48,500,000) (48,500,000) Use Of Fund Balance (One-Time) 13,128,300
Remaining Limited-Term Revenue (48,500,000) (48,500,000) (48,500,000) (48,500,000)
General Fund Revenue: The proposed FY 2026-27 revenue budget is $324,670,119, which is an increase of $14.7 million, or 4.7 percent compared to the FY 2025-26 revised General Fund revenue budget. Utility Users Tax and Sales & Use Tax represent the largest areas of growth. The General Fund revenue is summarized below and is detailed in Attachment 5 – General Fund Revenue and Expenditure Summary:
Property Taxes ($60.1 million)
Sales & Use Tax ($63.4 million)
Utility Users Tax ($70.5 million)
Other Taxes ($28.4 million)
Licenses Permits & Fees ($18.4 million)
Operating Transfer-In ($23.3 million)
Other Revenues ($50.2 million)
Miscellaneous Revenue ($10.4 million)
General Fund Expenditures: The proposed FY 2026-27 expenditure budget is $276,170,119. Major expenditure categories are summarized below, and additional detail is provided in Attachment 5 – General Fund Revenue and Expenditure Summary:
Salary/Wages and Fringe Benefits ($185.3 million)
Cost Pool ($19.2 million)
Professional and Administrative Costs ($28.7 million) Transfers Out ($21.3 million)
Other Operating ($8.7 million)
Utilities ($7.3 million)
Other Categories ($5.7 million)
Personnel-related costs remain the City’s fastest-growing and largest expenditure category. Since FY 2021-22, there has been a $54 million increase in personnel costs, including salaries, benefits, classification and compensation studies, MOU negotiations, and other related costs. In addition, there has been an increase of 103 filled FTEs.
There has also been a net increase of 141.5 positions added to position control through FY budget adoptions and City Council requests since FY 2020-21. The adopted position control in FY 2020-21 included 669.5 budgeted FTEs. As of May 31, 2026, there were 680 filled FTEs. This represents an increase of 99 FTEs, calculated as 680 FTEs as of May 31, 2026, minus 581 FTEs in FY 2021-22. The General Fund budget needs to be balanced using an approximate 12 percent vacancy rate, which generates
June 23, 2026
approximately $16.4 million in vacancy savings for FY 2026-27. This vacancy rate may increase further as new public safety Memoranda of Understanding (MOUs) are approved due to associated increases in salary and benefit costs. Attachment 4 provides a multi-year comparison of all full-time equivalent (FTE) positions in position control across every City department, including a column indicating the number of filled positions to provide additional transparency into vacancy levels City-wide.
Non-General Funds: The proposed non-General Fund budget totals $360,883,331 and includes funds dedicated to housing programs, debt service obligations, enterprise operations, and other essential City operations. A detailed summary of the Non-General Fund by Category summary of budget is provided in Attachment 3 – Fiscal Year 2026- 27 Comprehensive Budget by Fund.
Capital Improvement Plan (CIP): The proposed CIP budget totals $138,066,359 and spans multiple funds (see Attachment 6 – Capital Improvement Plan FY 2026-27 to FY 2030-31). The plan outlines a range of projects over a five-year period, including some that remain unfunded. The first year, FY 2026-27, represents the proposed budget, with funding for approved projects allocated annually.
Proposed Budget Adjustments
The adjustments described below reflect City Council direction provided on June 16, 2026, to finalize the Proposed FY 2026-27 Operating Budget and associated capital funding decisions.
GENERAL FUND
There is no net impact to the proposed FY 2026-27 General Fund budget resulting from the proposed adjustments, as reflected in Tables 3 and 4 below.
Table 3: FY 2026-27 General Fund Revenue – Final Adjustments Summary General Fund Revenues
FY 2025-26
Revised
Budget
FY 2026-27
Draft Budget
June 16, 2026
FY 2026-27
Draft Budget
June 23, 2026
Change
June 16
vs.
June 23
Property Taxes 58,329,291 60,134,838 60,134,838 - Sales & Use Tax 60,163,807 63,437,266 63,437,266 - Utility Users Tax 66,351,265 70,472,872 70,472,872 - Other Taxes 28,399,659 28,399,004 28,399,004 - Licenses, Permits & Fees 17,274,036 18,359,604 18,359,604 - Fines & Forfeitures 200,000 760,000 760,000 - Interest Income 3,030,545 3,530,545 3,530,545 - Charges For Services 3,724,495 4,621,757 4,621,757 - Other Revenue 50,167,500 50,187,500 50,187,500 - Rental Income 791,157 766,657 766,657 - Intergovernmental State Taxes 150,000 150,000 150,000 - Intergovernmental State Grant 180,000 230,000 230,000 - Intergovernmental Other Grant 290,000 290,000 290,000 - Proceeds from Sale of Property 15,000 15,000 15,000 - Loan/Bond Proceeds 40,400 40,400 40,400 - Transfers In 20,853,959 23,274,676 23,274,676 - Total Revenues 309,961,114 324,670,119 324,670,119 -
June 23, 2026
Table 4: FY 2026-27 General Fund Expenditures – Final Adjustments Summary General Fund
FY 2025-26
Revised
Budget
FY 2026-27
Draft Budget
June 16, 2026
FY 2026-27
Draft Budget
June 23, 2026
Change
June 16
vs.
June 23
Salaries & Wages 96,457,653 101,692,402 101,692,402 - Fringe Benefits 75,086,982 83,604,741 83,604,741 - Professional & Administrative 28,218,980 28,743,511 28,743,511 - Other Operating 8,528,480 8,679,889 8,679,889 - Utilities 7,828,970 7,302,430 7,302,430 - Equipment & Contract Services 5,337,487 5,491,635 5,491,635 - Provision For Insurance Loss 46,500 50,500 50,500 - Cost Pool 21,145,184 19,246,861 18,596,861 (650,000) Asset/Capital Outlay 3,417,773 3,455,390 3,455,390 - Debt Service Expenditure 775,647 174,047 174,047 - Cost Plan Reimbursement (3,362,171) (3,530,279) (3,530,279) - Grant Expenditures - - - - Transfers Out 31,107,929 21,258,991 21,908,991 650,000 Total General Fund Expenditures 274,589,413 276,170,119 276,170,119 -
Hilltop Green Wildfire Mitigation Reallocation - $60,000: Based on City Council direction provided on June 16, 2026, the Proposed FY 2026-27 Operating Budget includes a reallocation of $60,000 within the Public Works Department, Parks and Landscaping Division. This adjustment repurposes existing wildfire-mitigation funding to support work associated with the Hilltop Green emergency egress area. This supports the City’s ongoing wildfire-risk reduction efforts. This change is cost-neutral to the General Fund budget.
General Fund Cost Pool Reductions and Transfer to the General Capital Fund - $650,000: Consistent with City Council direction on June 16, 2026, the City will defer planned FY 2026-27 fleet replacements. As a result, the associated General Fund cost-pool charges to departments are no longer required. Specifically, the Fire Department will no longer be charged $470,000 for its scheduled vehicle replacement, and City-wide fleet-related cost-pool charges totaling $180,000 will also be removed from departmental budgets. Eliminating these charges reduces General Fund expenditures and makes $650,000 available for an operating Transfer Out to the General Capital Fund to support the funding plan for the Richmond Wellness Trail Phase II project.
NON-GENERAL FUND
The Non-General Fund budget reflects adjustments made in response to City Council direction on June 16, 2026, along with additional technical updates such as purchase order modifications, project timing corrections, and internal service fund true-ups, as reflected in Tables 5 and 6 below.
June 23, 2026
Table 5: FY 2026-27 Non-General Fund Revenues – Final Adjustments Summary Non-General Fund Revenues
FY 2025-26
Revised
Budget
FY 2026-27
Draft Budget
June 16, 2026
FY 2026-27
Draft Budget
June 23, 2026
Change
June 16
vs.
June 23
Total Capital Improvement Fund 87,326,393 60,819,360 61,912,501 1,093,141 Total Debt Service Funds 19,142,975 19,369,038 19,369,038 - Total Enterprise Funds 54,903,962 55,298,998 55,298,998 - Total Housing Funds 2,109,250 1,209,470 1,209,470 - Total Housing Authority Funds 4,485,250 5,159,579 5,419,652 260,073 Total Internal Service Funds 34,720,066 33,763,666 33,113,666 (650,000) Total Other Operations Funds 25,871,067 17,927,132 17,667,059 (260,073) Total Special Revenue Funds 93,107,915 77,604,198 77,570,286 (33,912) Total Non-General Fund Revenues 321,666,878 271,151,440 271,560,669 409,229
Table 6: FY 2026-27 Non-General Fund Expenditures – Final Adjustments Summary Non-General Fund Expenditures
FY 2025-26
Revised
Budget
FY 2026-27
Draft Budget
June 16, 2026
FY 2026-27
Draft Budget
June 23, 2026
Change
June 16
vs.
June 23
Total Capital Improvement Fund 152,829,842 109,856,013 103,633,172 (6,222,841) Total Debt Service Funds 19,232,511 19,470,075 19,470,075 - Total Enterprise Funds 87,192,680 75,408,497 76,131,837 723,340 Total Housing Funds 4,730,459 4,538,858 4,538,858 -
Total Housing Authority Funds 4,494,250 5,309,621 5,454,652 145,031 Total Internal Service Funds 52,935,289 50,094,873 49,444,873 (650,000) Total Other Operations Funds 31,141,190 20,974,101 21,161,919 187,818 Total Special Revenue Funds 123,293,809 81,345,717 81,047,945 (297,772) Total Non-General Fund
Expenditures 475,850,030 366,997,755 360,883,331 (6,114,424)
The adjustments in Table 7 reflect City Council direction provided on June 16, 2026, and modify Non-General Fund capital project budgets to reallocate available resources and address the CIP project shortfalls identified for FY 2026-31, and these adjustments are reflected in Tables 5 and 6 above.
Table 7: FY 2026-27 CIP Adjustments Based on June 16, 2026, City Council Direction Project Fund Amount
($) Notes / Purpose
Richmond Wellness Trail Phase II General
Capital 1,045,000 Identified project shortfall needing
funding
San Francisco Bay Trail at Point Molate General
Capital 1,000,000 Identified project shortfall needing
funding
Shields-Reid Park (anticipated change
orders)
General
Capital 196,000 Identified shortfall for change orders
Wendell Park (anticipated change orders) General
Capital 435,000 Identified shortfall for change orders
Total Shortfalls 2,676,000 Total funding needed
Corporation Yard Fuel Site Upgrades
(deferral)
General
Capital (189,800) Design phase deferred to free funding Civic Center Plaza Landscaping (project
removal)
General
Capital (200,000) Scope removed; will be partially
absorbed by existing maintenance
Point Molate Trail Beach Stabilization General
Capital (1,250,000) Funding reallocated; grants expected to backfill
Fire Fleet (deferral) Equipment
Services (470,000) Scheduled fire vehicle replacement
deferred
June 23, 2026
Project Fund Amount
($) Notes / Purpose
City-wide Fleet (deferral) Equipment
Services (180,000) Vehicle replacements deferred across departments
Parks and Open Space Program General
Capital (386,200) Reallocation; grants projected to
support future needs
Total Available Funding 2,676,000 Matches total shortfall
NEXT STEPS
City staff recommend adopting resolutions approving (1) Fiscal Year (FY) 2026-27 Proposed Operating Budget, and (2) FY 2026-27 to FY 2030-31 Proposed Five-Year CIP Budget. Upon adoption City staff will implement the Adopted Budget on July 1, 2026, and will present the Quarter 1 Budget Review to the City Council at a subsequent meeting.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution Adopting the Fiscal Year 2026-27 Operating Budget Attachment 2 – Resolution Approving Capital Improvement Plan for FY 2026-27 to FY 2030-31
Attachment 3 – Fiscal Year 2026-27 Comprehensive Budget by Fund Attachment 4 – Fiscal Year 2026-27 Proposed Position Listing Attachment 5 – General Fund Revenue and Expenditure Summary Attachment 6 – Capital Improvement Plan FY 2026-27 to FY 2030-31 Attachment 7 – Transfer In-Out Schedule FY 2026-27
Attachment 8 – Draft Presentation