Strategic Plan for Maritime RevitalizationPresented by: Nathan PaukovitsSenior AdvisorThe Roosevelt GroupMay 5, 2026 Discussion Points
•Overview•Strategic Plan•DC landscape •Recommended Actions•Discussion
OVERVIEW
The Roosevelt Group
The Roosevelt Group is a trusted, bipartisan firm specializing in federal government relations, strategic advocacy and business development. Our deep policy expertise, senior-level access, decades of experience and customized approach deliver desired results and propel client success. 100+ Subject Matter ExpertsGain insights from industry-leading professionals with deep knowledge across various fields. Their expertise, access, and experience will help you navigate complex challenges and drive results.Advocacy, Consulting, Intelligence, and Strategic Communications Our team specializes in Capitol Hill, the Pentagon, and Homeland Security. We navigate these complex institutions to deliver tailored solutions and impactful results.
VisionTo create opportunities that grow industries, strengthen national security and solve complex challenges in a rapidly changing world.
Committed to YouWe seek to serve each client with the same enthusiasm, perseverance, and integrity that fueled Roosevelt’s work. We value hard work, strong ethics, and success.TRG Offices, Washington, DC Executive Summary•The Reality:
•The Opportunity:
•The Strategy:
•The Ask:
Mare Island’s historic maritime ecosystem is underutilized. A reliance on short-term, unpredictable repair work leaves the regional industrial base economically vulnerable. A generational shift in federal defense and commercial maritime spending is happening right now, driven by new legislative mandates and strategic naval imperatives. A coordinated, three-pillar plan to capture federal investments by transforming Vallejo into a premier West Coast hub for ship repair, strategic basing, and maritime innovation.Unified local leadership to execute rapid, low-cost structural changes to economic development to outmaneuver competitor states.
STRATEGIC PLAN
The Strategic FrameworkVision:To build a self-sustaining maritime innovation loop.Pillar I: Industrial RevitalizationCommercial & Federal Shipbuilding and RepairPillar II: Strategic PresenceLong-Term Navy & Coast Guard Vessel BasingPillar III: The EcosystemWorkforce Pipelines & Dual-Use Technology Innovation.
A Modernized, Aggressive City Economic Development Platform can Power the PillarsAerial view of the City of Vallejo, CA Pillar I: Industrial RevitalizationThe Goal: Transition from unpredictable, short-term repair jobs to sustained, high-value commercial and federal work by embedding Mare Island into the Maritime Industrial Base funding streams.Focus Areas:•Create a Defense Community.•Modernize the Shipyard and Supporting Infrastructure.•Align to federal priorities —autonomous fleets, medium-scale vessels, and supply chain.Immediate Actions:•Create a formalized, advocacy organization to interface directly with senior government officials.•Create a City-led Vallejo Maritime Industrial Base Coalition to align the stakeholders in tracking maritime priorities and strategic resourcing.•Plan and execute dry dock improvement projects. •Develop and execute an advocacy campaign.
Pillar II: Strategic PresenceThe Goal: Secure long-term U.S. Navy and/or U.S. Coast Guard homeporting to guarantee baseline economic activity.Focus Areas:•U.S Navy shipbuilding plan•U.S. Coast Guard shipbuilding planImmediate Actions:•Execute a highly targeted senior-leader engagement strategy targeting Chief of Naval Operations’ staff and Coast Guard Headquarters.•Strengthen community support infrastructure to prove family readiness to federal decision-makers.
Stationing requires Vallejo to deliver a complete logistics, maintenance and family support ecosystem.
Historic view of U.S. Navy operations at Mare Island
Pillar III: The Ecosystem The Goal: Build the talent and technology that federal contractors require to operate modern shipyards.Focus Areas:•Expand Talent Pipeline through a Maritime Workforce Pathway (K-12-to-career). •Launch a Maritime Tech Accelerator. •Develop a Maritime Innovation Campus. Immediate Actions:•Build a visible K-12-to-career pipeline that prepares local students for ship repair, advanced manufacturing, marine systems, and emerging maritime technology jobs.•Create a targeted platform at Mare Island to attract startups, solve maritime and national security problems, and connect innovators to pilots, mentors, and end users.•Establish the physical backbone of the innovation ecosystem: a place where students, startups, researchers, and operators can prototype, test, demonstrate, and train.TRAIN —INCUBATE —TEST —DEPLOY Re-Tool the City’s Economic Engine•Establish a Vallejo Enterprise Fund •Build a Maritime Investment Prospectus and Active Sites Inventory•Launch a unified recruitment, marketing, lead generation, and consultant cultivation campaign. •Establish a formal business retention and expansion program. •Create a development concierge and strategic incentives program. •Use strategic asset management and recurring revenue generation to strengthen Vallejo’s economic development capacity.
Aerial view of the City of Vallejo, CA
DC LANDSCAPE
FY27 Appropriations Roadmap
Likely House NDAA Passage
U.S. Senate
U.S. House of Representatives
AugustCY26FebruaryMarchAprilMayJuneJuly SeptemberOctoberNovemberDecemberJanuaryJanuary August HAC Submission DeadlineMARCH 13 & 20
Likely release of FY27 President’s BudgetLikely SASC NDAA Submission Deadline APRIL
SAC FY27 Budget Hearings
HAC FY27 Budget HearingsHAC Bill Markups
ConferenceCommittee Negotiations
DEC/JAN.
Conference Committee Negotiations
DEC / JAN.
2027 Approps Signed into Law?DEC/JAN.
Likely SAC Markups
Today
Department of War FY27 Budget Request
Front view of the U.S. Pentagon
Key Investments Missile DefenseRobustly funds the "Golden Dome for America" next-gen missile shieldShipbuilding & Industrial BaseAllocates $65.8 billion to procure 18 baOle force ships and 16 non-baOle force ships. Establishes the “Golden Fleet.”Air, Space & Tech SuperiorityFunds F-47 Next Gen Air Dominance—first crewed 6th-gen fighter.Invests in unmanned systems and Ar@ficial Intelligence, including the buildout of the GenAI.mil plaZorm.Nuclear Moderniza@onUpgrades the na\on’s nuclear deterrent.
Strategic Priori@esIncreases total defense spending by over 40% (to 1.5 trillion), including $350B in mandatory funding.Focuses on:•Rebuilding the U.S. military•Re-establishing deterrence•Revitalizing the defense industrial base•Strengthening homeland security & sovereigntyPersonnel & Readiness:Funds a targeted pay raise of 7% for junior enlisted personnel (E-5 and below), 6% for ranks E-6 to O-3, and 5% for officers O-4 and above.DoW Topline increase of $441 Billion from FY26 enacted level Department of Navy FY27 Budget Request
FY27 Budget Request –Maritime Action Plan•Creates a Maritime Security Trust Fund•$1.4 billion for Maritime Administrationo$450 million for Port Infrastructure Development Programo$430 million for USMMA Campus Asset Management Programo$250 million for Commercial Shipbuilding Infrastructure Development Programo$134 million for National Defense Reserve Fleet Support Shipso$ 73 million for Maritime Workforce Programo$ 50 million for U.S. Marine Highway Programo$ 25 million for Maritime Innovation Center
RECOMMENDED ACTIONS
Time-Phased Approach
Long Term(3-10 years)Near Term(0-1 year)●Establish a Public-Private Partnership-Mare Island, a City-led Vallejo Maritime Industrial Base Coalition, and a formal partnership with Cal Poly Maritime.●Build a Maritime Investment Prospectus. ●Enhance city economic development (campaign, retention and expansion program, concierge and incentives program).●Establish direct communications with the U.S. Navy and U.S. Coast Guard to get to know them and fully understand processes.●Maximize Federal Funding Opportunities Mid-Term(1-3 years)●Develop Courses of Action to fund Mare Island’s Top 10 infrastructure requirements.●Develop Courses of Action to develop berthing options on Mare Island ●Establish Maritime CTE Program. ●Launch a Vallejo Maritime Tech Accelerator ●Develop a Maritime Innovation Campus and Demonstration Site ●Establish a Vallejo Enterprise Fund●Outreach campaign to the major robotic and autonomous prime, subcontractor, and significant vendors. ●Strengthen Community Support for Service Members and their Families●Enhance Ship Infrastructure to Support Modern Vessels. ●Position Mare Island as a future Homeport for FFG, LUSV, and MUSV. ●Prioritize Mare Island as a West Coast USCG Cutter Hub ●Deepen the Mare Island Strait in the interest of national security. ●Conduct systematic Abandoned and Derelict Vessel (ADV) Removal.
Actions with Immediate Returns•“One Voice” Governance Model•Maritime Prosperity Zone Promotion •Strategic Federal Alignment•Consistent Federal Advocacy•Repetitive Federal funding strategy OMB issues planning guidanceSPRING
Exec agencies develop budgets SPRING/SUMMER
OMB issues A-11 w/ detailed budget instruc<ons
JUNE
Agencies submit budgets to OMBSEPTEMBER
OMB conducts fall review and can revise guidance
FALL
OMB Briefs POTUS & senior advisorsLATE NOVEMBER
OMB “Pass backs” on budget decisions LATE NOVEMBER
Agencies can appeal OMB decisionsDECEMBER
Finalize budget jus<fica<on materials JANUARY
President’s Budget Released FEBRUARY
Success relies entirely on an aggressive, hyper-organized approach ORGANIZE —PACKAGE THE ASSET —ENGAGE
DISCUSSION
THANK YOUThe Roosevelt Group200 Massachusetts Ave, NWWashington, DC 20001www.rooseveltdc.com FY 2026-2027 Budget Workshop City Manager’s Office and the Finance DepartmentMay 5, 2026 Agenda
•Opening Comments•Staff Presentation•Council Discussion and Direction Staff Presentation Outline
General Fund Focus•Overview of the Budget Development Process•Presentation of baseline projection•Review of Budget Deficit and Balancing Strategies•Measure P fund status (including FY 2026-2027 staff requests) Overview of Budget Process
Budget Policy as per City Charter
•Per Charter Section 701, the City Manager submits a proposed budget to Council 45 days before the fiscal year begins. •General Fund proposed expenditures shall not exceed estimated revenues. •Estimated revenues include surpluses from the current year.
City’s Traditional Budget Development Process•Establish Baseline Budget: Build the foundation using prior year ongoing expenditures and revenues.•Department Budget Requests: Departments submit requests for new funding needs and adjustments. •Proposed Budget (By May 15). Staff publishes the Proposed Budget and presents it to City Council for feedback at a workshop. •Revised Proposed Budget (June): Staff incorporates Council feedback and presents an updated Proposed Budget. •Iterative Refinement and Adoption: Additional revision are made as needed through Council direction until final budget adoption.
FY 2026-2027 Budget Development Process Enhancement•May 5: Special Council Meeting to receive direction from City Council•TBD : Community Budget Workshop to gather input from City Council and the public.•Baseline Budget Methodology: •Start with Adopted FY 2025-2026 budget•Add back 20% of one-time service/supply cuts from FY 2025-2026•Apply a 3% inflation factor for general services/supplies•Remove all one-time revenues and expenditures. •Adjust ongoing revenues and expenditures for forecasted revenue changes, inflation, labor agreements, and contractual obligations.
FY 2026-2027 Baseline Budget
Revenue
Revenue Assumptions (FY 2026-2027 Baseline vs FY 2025-2026 Revised)•Revenue projections are prepared individually for each revenue source. Assumptions and source data vary by category. •Property Tax, Sales Tax, and Business License projections are provided by our consultant.•Property Taxes including MVLF: + 2% increase primarily due to annual CPI adjustment.•Sales and Transaction Use Taxes : + 1% increase due to ongoing inflation, high interest rates, fuel price volatility and global economic uncertainty.•Business Licenses : -7% decline to align with the actuals received in FY 24-25 and FY 25-26 •All other unrestricted revenues are based on average prior-year trends, anticipated rate adjustments, and/or contractual increases:•Utility User Tax: -9% decline; reflecting reduced usage in electric and gas, and continuing structural shifts in cable and telecommunications.•Transient Occupancy Tax: -9% decrease ; reflecting ongoing economic uncertainties. •Franchise Tax: +8% increase; driven by rate increases on garbage, electric and gas.•Other: -16% net decrease; due to the shifting of OPEB trust reimbursement to Retiree Health Fund #506 in Fiscal Year 2026-2027. Other include cannabis and real property excise taxes, rentals, investment income, water rights, Six Flags park fee, transfers from other funds. •Program revenues are developed and provided directly by individual departments based on expected activity levels and prior year collections.
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This trend on all other revenues limits the ability to rely on revenue growth to cover future cost increases.
Expenditure
Expenditure Projection Process Finance Department: Develops the baseline expenditure projections, including:•Labor costs•Non-labor costs, including service and supplies, debt service, transfers and subsidies•Citywide cost allocation plan charges allocated to other funds •Workers’ compensation rate and general liability contributionPublic Works Department:•Fleet allocation costs and vehicle replacement schedules.•Engineering staff time reimbursements from capital projects•Maintenance division allocation charges to other funds All Departments:•Departments verify baseline assumptions and submit requests for modifications.•Due to the projected shortfall, departments were directed not to submit new funding requests for the 2026-2027 Budget cycle.
General Fund Salaries & Benefit Baseline Budget Assumptions1. Salaries:Salary costs are calculated for each authorized position. Employees below top step are assumed to receive step increases. Vacant positions are budgeted at Step 3. Includes one-time period 27 payroll. Does not assume vacancy savings.2. Overtime: Budgeted primarily for VPOA and IAFF employees with 3% increase.3. Benefits include: Pension: Based on the CalPERS June 30, 2024, annual evaluation report. Health and Welfare Benefits: Includes health, retiree health, dental, vision, and insurance. Health and retiree health rates are based on published CALPERS rates and actuarial assumptions used in the City’s OPEB actuarial study.Other Benefits: Includes workers’ compensation, Social Security, and Medicare. Workers’ compensation costs are based on five-year claims history by department and actuarial assumptions in the Workers Compensation program study.4. Leave Payouts: Estimated using historical trends and known retirement projections.5. Labor costs increases: Budgeted to cover potential cost-of-living adjustments (COLA) or other negotiated benefit increases.
Pension Liabilities •Pension Summary (as of 6/30/24 valuation report)•Normal Costs (current year benefit costs)•Unfunded Accrued Liability (UAL) Costs (payment toward prior year pension obligations)•Miscellaneous Plan for FY 2026-2027•Employer Normal Cost: 10.25% (before any employee cost-sharing)•Total UAL contribution: $11.81M•Total City Unfunded Accrued Liability: $125.5M (GF share-57%)•Funded ratio: 63.7%•Safety Plan for FY 2026-2027•Employer Normal Cost: 20.67% (before employee cost-sharing)•Total UAL contribution: $21.17M •Total City Unfunded Accrued Liability: $232.8M •Funded ratio: 61.8%* PARS Pension Trust Fund -$25.57M as of 3/31/26 General Fund FY 2026-2027 Baseline Budget Challenge
FY 2026-2027 –Board & Commissions Funding Request
FY 2026-2027 Budget Deficit•March 10 estimate: ($29.09M)•May 5 updated estimate: ($28.54M). Key changes since March 10:oRevenue decrease: ($2.66M) reduction in UUT projectionsoShifted retiree pay-as-you-go costs and related OPEB trust reimbursement to Retiree Health Fund#506 ($1.3M)oBenefit cost decrease: $920K discount for the pension UAL contribution based on lumpsum payment.oService and Supplies decrease: removed ($1.5M) in ongoing FY 25-26 midyear requests (not approved by Council)oTransfers increase: Additional $700K budget for Litigation Deposit FundoInterfund reimbursement increase of ($1.53M): based on prior year actuals.
Budget Deficit Balancing Strategies
FY 2026-2027 Budget Deficit Balancing Strategy -Summary Projected Structural Deficit($28.54)MStrategy to Close the GapExpenditure Control Options21.23Use of Reserves/One-time funds7.31Revenue Enhancements1.75Total $30.29MTotal excluding Revenue Enhancements $28.54M FY 2026-2027 Budget Deficit Balancing Strategy -Detail
Budget Deficit Balancing Strategy –Position ReductionTotal Vacancies -87 FTEs Proposed Reduction -50 FTEs (includes 15 defunded PD positions)Proposed FTE count -From 463 to 413 (back to 2017-18 level)
Participatory Budget Project –Unspent Funds (in millions)
Potential Revenue Increase Options•Property Transfer TaxApplies at time of property sale (one-time transaction)Paid upon transfer of real propertyCurrent Rate : $3.30 per $1,000 property value (FY 2026-2027revenue: $2.47M)Proposed Ballot Measure for new rate –a potential additional revenue option for Council consideration. From $3.30 per $1,000 property value to:Option A: Moderate Increase → $7.00–$10.00Option B: TieredUp to $1M → $5.00 $1M–$3M → $10.00 $3M+ → $15.00 Option C: Higher Increase → $15.00 Example -$500,000 home (impact to homebuyer)Current tax : $1,650Option A : Moderate increase: $3,500-$5,000Option B : Tiered at $5.00 : $2,500Option C : Higher increase : $7,500 Potential Revenue Increase OptionsProperty Transfer Tax-continued Key Timelines for the November 3, 2026 Election:1. Decide the tax (now –June 2026) -Set rate + structure, revenue estimates, Legal review2. Council approval (June –July 2026) -Approve ordinance + ballot question, Vote to place on ballot3. Submit & vote-File with County byearly August 2026 (hard deadline), Need majority vote
Property Transfer Tax –Other Charter Cities
Potential Revenue Increase OptionsFee Updates (9/9/25 council meeting) –if implemented(in millions)•Building fees -$0.78•Planning fees -$0.13•Fire Prevention fees -$0.46Compliance-Based Revenues•Parking Enforcement•Code Enforcement Measure P fund status (including FY 2026-2027 staff requests) Measure P Funds
Estimated Beginning Balance as 7-1-26$7.25 MDeduct: FY 2025-26 Public Works Items Pending Council Approval$(1.50 M)FY 2026-27 Tax revenues$17.92MFY 2026-27 Interest income$0.50 MFY 2026-27 Available Fund Balance$24.17M Measure P: FY 2026-27 Department Requests
Department(Millions)FY 2026-2027
Fire 5.35Police 1.75Human Resources0.62Econ. Dev. 0.64Information Technology2.30Public Works1.52Total 12.18 Measure P: FY 2026-2027 Recommended on 4/30/26
DepartmentDescriptionTotalFY 2026-2027OutyearsFunding Shift FY 2026-2027(From General Fund)FireSAFER Grant2.620.542.080.54Personal Protective Equipment0.250.25- 0.08Fire Academy0.750.75- 0.10Zoll Lease Payments0.480.050.430.05Total4.101.582.510.76PoliceComputer Replacement0.120.12- -Background Services0.120.12- -IHART0.280.28- -Total0.520.52- -Total MPOC Recommendation4.612.102.510.76 Measure P: FY 2026-2027 Not Recommended on 4/30/26
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Measure P: FY 2026-2027 Department Requests for 5/11/26 (millions)DepartmentDescriptionTotalFY 2026-2027OutyearsFunding Shift FY 2026-2027(From General Fund)Human ResourcesPublic Safety Promotion Assessments0.060.06- 0.06VPD Recruitment, Retention, Referral Plan0.570.57-Total0.620.62- 0.06Econ. Dev.LRPMP, Real Estate Broker0.510.51Youth Create Asphalt Art for Safer Streets0.130.13Total0.640.64- -Information TechnologyEquipment Service Upgrade agreements0.180.18- -Operate 500 radios in Solano County0.320.32- -AT&T circuits0.050.05- -Lease payment 8 of 8 0.460.46- -Infrastructure replace0.460.46- -Added cyber security defense0.300.30- -New radio purchases0.400.40- -Phone system replace0.140.14- -Total2.302.30- -Public WorksSecurity Services0.430.43- 0.43Janitorial0.130.13- 0.13Fleet Annual Contribution -VPD ASK0.760.76- 0.76Fleet Annual Contribution -Homeless Clean Up Trash Truck0.210.21- 0.21Total1.521.52- 1.52 Measure P: FY 2026-2027 Department Requests for 5/11/26 (millions)DepartmentDescriptionTotalFY 2026-2027OutyearsFunding Shift FY 2026-2027(From General Fund)PoliceFlock 0.300.30- -Axxon 0.480.48- -Danny Murphy Consultant0.250.25- -Safety Vechicles0.200.20- -Total1.231.23- -Fire Vehicles3.233.23- -Gear Washers & Dryers0.170.17- -CERT Program 0.100.050.05-Marine Firefighting0.150.15- -Trainee Program0.100.050.05-Emergency Op Center0.100.050.05-Firefighter Mental Health & Peer Support Program0.150.080.08-Total3.993.770.23-Total MPOC for May 11, 202610.3110.080.231.57 Questions?
Council Discussion and Direction
Council Direction Needed
•Expenditure Reductions –Acceptable level and priority areas•Use of Reserves –Amount and one-time vs. ongoing use•Property Transfer Tax –Support increase? Target rate and timing•Fee Updates (PDS, Fire) –Adjust cost recovery? Any policy constraints•Parking & Code Enforcement –Desired scope and funding approach•Implementation Pace –Immediate vs. phased approach THANK YOUNalungo ConleyAssistant City Manager/Acting Finance [email protected] of Vallejo555 Santa Clara StreetVallejo, CA 94590www.cityofvallejo.net