Title
Adoption of Resolution Approving and Adopting the Operating and Capital Budget for Fiscal Years (FYs) 2025-26 and 2026-27; [City Council]
Adoption of Resolution Approving and Adopting the Budget for FYs 2025-26 and 2026-27; [SACIC] and
Adoption of Resolution Approving Workforce Changes and Amending the Management and Confidential Employees Association Salary Schedule and Amending the Alameda City Employees Association Salary Schedule in Fiscal Years 2025-26 and 2026-27, Effective July 1, 2025. [City Council] (Finance 10024051)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY-Z
Every two years, staff presents to City Council the Citywide biennial budget for adoption. The budget outlines the City of Alameda’s (City) fiscal plan for the two upcoming years, Fiscal Year (FY) 2025-26 and 2026-27, as well as the level and type of services to be provided. Staff and City Council held a budget workshop on May 5, 2025, during which staff presented the City Manager Proposed Budget. Staff and City Council continued that workshop on May 13, 2025, and the proposed Capital Improvement Program (CIP) Budget was also presented and discussed. The budget presented to City Council for adoption incorporates direction provided during these May budget workshops.
The Proposed Biennial Operating Budget for FYs 2025-27 (Proposed Budget), inclusive of City Council direction, totals $361,192,298 in FY 2025-26 and $358,330,309 in FY 2026-27, including all City funds and transfers (except Alameda Municipal Power). The General Fund budget is $152,182,348 in FY 2025-26 and $153,819,847 in FY 2026-27. The Proposed Budget includes the use of $6.2 million of residual fund balance from the General Fund in FY 2025-26 and $3.1 million in FY 2026-27 to fund one-time investment in operational and capital requests that were discussed at the May 5 and May 13 budget workshops. With an estimated Starting Unassigned Fund Balance for the General Fund at roughly $21.4 million to begin FY 2025-26, staff estimates an Ending Unassigned Fund Balance of $9.3 million for June 30, 2027. The Proposed Budget maintains the City’s required reserves above 25% of the City’s General Fund operating expenditure budget.
Additionally, the Proposed Budget includes key investments in City Council Strategic Plan priority areas including:
• House all Alamedans: Continue the successful Emergency Supportive Housing program after the American Rescue Plan Act (ARPA) funding is fully expended; add a Program Specialist II to bring mobile homeless outreach in-house to improve service delivery capacity.
• Enhance Community Safety and Services: Hire a new Victim Advocate in the City Attorney’s Office; fund social services at security at the Main Library and add two new librarian positions and one library technician.
• Invest in Transportation & Infrastructure: $1.8 million General Fund dollars towards the Lincoln/Marshall/Pacific Corridor Improvements project during FY 2025-26; $1.2 million General Fund dollars towards Neighborhood Greenways; and continued funding for the ADA Transition Plan Implementation.
• Build Resilience to Climate Change & Water Level Rise: $400,000 to begin implementing a comprehensive Emergency Water Supply System and $305,000 for the Bay Farm Island Adaptation project.
• Practice Fiscally Responsible and Inclusive Governance: Add a Housing Specialist II to the Rent Control program to effectively implement the rent registry.
BACKGROUND
On May 5, 2025, City Council held a budget workshop on the Proposed Budget. This budget workshop was extended to May 13, 2025, and on that day the CIP budget for FYs 2025-26 and 2026-27 was presented and discussed. These workshops were intended to provide both City Council and the community an opportunity to review the factors that make up the overall City budget. During these workshops the City Manager, Department Heads, and staff provided information and answered questions about departmental operations and FYs 2025-27 funding requests. City Council and the community provided input to staff regarding allocation of funding beyond the baseline budget.
The direction from City Council on additional funding changes have been incorporated into the Proposed Budget. The City Manager’s budget transmittal letter is attached to this report as Exhibit 1.
Final versions of the operating budget and CIP budget documents will be available in electronic format and posted to the City’s website. The documents are expected to be completed in August 2025.
DISCUSSION
Based on the discussions held during the May budget workshops, the Proposed Budget intends to meet the City’s mission and City Council’s stated goals for the upcoming two fiscal years. A summary of the Proposed Budget for the City for FYs 2025-26 and 2026-27 is attached in Exhibit 2, and a summary of the proposed CIP budget for FYs 2025-26 and 2026-27 is attached in Exhibit 3.
Citywide Expenditures and General Fund Expenditures
The City’s operating budget is comprised of a variety of funding sources. The General Fund is the largest single fund and represents the resources over which City Council has the most discretion. Prior to consideration of any program or service improvements, the Proposed Budget absorbs ongoing expenditure increases of approximately $7.1 million in FY 2025-26 (Year 1), and $10.2 million in FY 2026-27 (Year 2), mostly in the General Fund, compared to the FY 2024-25 budget. Specifically:
• Increases general liability insurance costs of $1.1 million in Year 1 and $100,000 in Year 2;
• Increases CalPERS Actuarial Unfunded Liability (UAL) retirement contributions of $2 million in Year 1 and $3.9 million in Year 2;
• Absorbs CARE Team, $3.0 million in FY 2025-26 and an expected $3.2 million in FY 2026-27. Staff is presently working on potential funding sources that would help with such costs; and
• After all available ARPA grant funding is expended by December 2025, the Emergency Supportive Housing program is expected to cost the General Fund approximately $1.6 million between January 2026 and June 2027.
The City’s total Proposed Budget for expenditures for all funds including transfers out is $361.2 million in FY 2025-26 and $358.3 million in FY 2026-27, both exclusive of Alameda Municipal Power (AMP). The General Fund represents approximately $152.2 million, or 42%, of the total in FY 2025-26 Proposed Budget and $153.8 million, or 43%, of the FY 2026-27 Proposed Budget, as shown in Table 1 below. General Fund expenditures by department are shown in Exhibit 2, p. 11. In addition, to address a City Council request, Exhibit 5 provides clear visual context for departmental budgets including all funding sources.
Table 1 - General Fund
|
|
FY 2023-24 Actual |
FY 2024-25 Revised Budget |
FY 2025-26 Proposed |
Change |
FY 2026-27 Proposed |
Change |
|
General Fund |
$156,747,872 |
$158,961,886 |
$152,182,348 |
(4.3)% |
$153,819,847 |
1.1% |
|
All Other Funds |
$172,966,234 |
$252,067,339 |
$209,009,950 |
(17.1)% |
$204,510,462 |
(2.2)% |
|
Total |
$329,714,106 |
$410,921,921 |
$361,192,298 |
(12.1)% |
$358,330,309 |
(0.8)% |
Operating Budget Changes Since the May 5 Budget Workshop
Based on direction provided by City Council, the Proposed Budget incorporates the following changes (Table 2) since the draft budget presented at the May 5 Budget Workshop. The social service work for the Main Library will fund services provided either through a contract or with part-time staff. The Program Specialist II position that was discussed at the May 13, 2025, budget workshop as part of bringing the homeless mobile outreach work in-house, is already included in the baseline recommended budget and therefore not detailed in the table below that describes City Council directed changes.
Table 2 - City Council Directed Changes to the Operating Budget
|
Department |
Description |
Funding Source |
FY 2025-26 Budget |
FY 2026-27 Budget |
|
Non-Departmental/Police |
Increased Revenues from CFDs for use in the General Fund |
CFDs |
$1,000,000 |
$1,000,000 |
|
|
Subtotal: Operating Budget Savings |
$1,000,000 |
$1,000,000 |
|
Library |
Social Services (part-time or contractual) |
General Fund |
$77,800 |
$0 (to be discussed at mid-cycle) |
|
Police |
Hiring of up to 72 Police Officers (up from 70 officers recommended on May 5) |
General Fund |
$615,542 |
$472,396 |
|
City Attorney’s Office |
Addition of a Victims Services Advocate position |
General Fund |
$200,000 |
$202,000 |
|
General Fund |
Various adjustments including CalPERS, transfers, negotiations, etc. |
General Fund |
$350,000 |
$350,000 |
|
Non-Departmental |
Additional funds required for 25% Reserve |
General Fund |
$196,034 |
$62,007 |
|
|
Subtotal: Operating Budget Costs |
$1,439,376 |
$1,086,403 |
|
|
Total Operating Budget Net Changes per Council Direction |
($439,576) |
($86,403) |
The Proposed Budget incorporates the following technical corrections to the budget presented at the May 5 and May 13 Budget Workshops.
Table 3 - Technical Corrections
|
Department |
Description |
Funding Source |
FY 2025-26 Budget |
FY 2026-27 Budget |
|
General Fund |
Various corrections to employee steps, pending contracts, etc. |
General Fund |
$318,944 |
($225,176) |
|
|
Total Operating Budget Technical Corrections |
$318,944 |
($225,176) |
General Fund Revenues
The General Fund is the City’s main operating fund and typically accounts for between 40% and 45% of total City revenues.
General Fund revenues in the Proposed Budget, including transfers in, are estimated to increase by $3.4 million, from $143.4 million in FY 2024-25 to $146.8 million in FY 2025-26, and increase by $4.2 million in FY 2026-27 to $151.0 million (see Exhibit 2). The City’s largest source of General Fund revenue, Property Tax, remains stable and has grown steadily through the last decade, with modest growth expected over FY 2025-26 and 2026-27 despite an anticipated decrease in real estate development activity. Sales tax receipts are expected to decrease approximately $1.0 million between FY 2024-25 and FY 2025-26 due to a combination of the loss of a major revenue generator and a tightening of economic conditions. Sales tax receipts are expected to nearly recover to FY 2023-24 levels during FY 2026-27.
Expectations for General Fund revenues over the next two years are summarized below.
• Property tax is the largest single source of revenue for the City’s General Fund and represents approximately 44% of General Fund revenues. The property tax is ad valorem, meaning the tax paid on a property is proportional to the property’s assessed value (AV). Under the terms of Proposition 13 passed in 1978: 1) the annual tax owed is a maximum of 1% of a property’s AV and 2) the AV may only increase to a maximum 2% each year unless ownership changes or new construction, in which case the prevailing market value assessment is used as the basis for taxation. Over the last five years, property tax revenues have grown by 36%. The growth for that period was accelerated by a rapid increase in the sales prices for housing and commercial properties, as well as new construction. Property tax is expected to increase an estimated 5.2% from the FY 2024-25 projection of $63.4 million to $66.7 million in FY 2025-26, and by 3.75% to $69.2 million in FY 2026-27.
• Sales Tax/Transaction and Use Tax revenue is dependent on consumer spending and on the economy overall, as these taxes apply to retail sales or the use of tangible personal property. The two main revenue streams in this aggregated category are the 1% Bradley Burns sales tax and the 0.5% Measure F (2018) Transaction and Use Tax. The City’s sales, transactions and use taxes are approximately 14% of the City’s General Fund revenues. After briefly being impacted by the pandemic in FY 2020-21, this aggregate revenue stream has seen steady year-over-year growth through FY 2023-24. However, the possibility of a suppressed economy and the relocation of one of the City’s larger taxpayers during FY 2024-25 are impacting the aggregate category with receipts in FY 2025-26 forecasted to dip from $21.4 million in FY 2024-25 to $20.4 million in FY 2025-26 before recovering slightly to $20.9 million in FY 2026-27.
• The Property Transfer Tax rate on residential and commercial sales is 1.31% of the value of each real estate transaction. Alameda’s share is 1.2% with Alameda County receiving the other 0.11%. The tax is triggered by the transfer of property ownership, and both the buyer and seller are responsible for ensuring the tax is paid. The Transfer Tax is conservatively estimated at $11.3 million for FY 2025-26 and $11.5 million for FY 2026-27. Actual Real Property Transfer Tax receipts fluctuate greatly, from as much as $21.9 million in FY 2021-22 to a low of $10.8 million two years later. During these last few years with the increase in mortgage interest rates, sales of real property have slowed considerably. The proposed budget assumes that the real property markets will continue to remain slow but constant during both budget years.
• The City imposes a Utility Users Tax (UUT) of 7.5% on all residential and commercial utility bills for properties within the City. The UUT is generated on the use of cable television, telephone services, natural gas and electricity. City staff projects slight increases to UUT of 2% per year as natural gas prices stabilized and energy consumption has steadily risen. This amounts to $9.9 million in FY 2025-26 and $10.1 million in FY 2026-27.
• The Business License tax (BLT) is charged annually to all businesses operating within the City. Some businesses pay a flat rate tax, and some are assessed based upon gross receipts earned, paying a minimum tax based upon graduated rate bands. The City’s residential rental businesses pay $20 per unit, and commercial rental businesses pay $20 per 1,000 square feet. In accordance with Ordinance No. 2500 adopted by the City Council in 1990, the minimum tax is adjusted each fiscal year by the percentage change in the Consumer Price Index (CPI). There is no CPI increase to business taxes assessed on residential or commercial rental properties. Due to the structure of the City’s BLT, these revenues typically grow slowly, and account for approximately 2% of General Fund revenues. Business License Tax is projected to stay flat from $3.0 million in FY 2024-25 to FY 2025-26 and then increase slightly by 2% to $3.1 million in FY 2026-27.
• Transient Occupancy Tax (TOT) is imposed on occupants for the privilege of occupying room(s) in a hotel, motel, short-term residential rental, etc. TOT decreased briefly during the pandemic. In November 2022, the Alameda electorate approved an increase to the TOT rate increasing from 10% to 14%, and City staff is projecting stable TOT revenues of $3.4 million each of the next two years.
• Departmental Fees and Charges for Services are $10.2 million in both FY 2025-26 and FY 2026-27, an increase of 2% from FY 2024-25 due to increased collection of ambulance fees and increased recreation program activity.
Capital Budget Allocations from the General Fund
The City Manager reviews the proposed capital project allocations, including projects that require allocations from the General Fund. The projects listed below include regularly occurring or “ongoing” projects that typically are in the capital budget. Also included are proposed one-time investments that emphasize improving safety, security, and accessibility at public facilities. Projects listed below are recommended for General Fund allocations from existing residual General Fund balance over the two-year period. The proposed General Fund allocations to capital projects total approximately $6.1 million for FY 2025-26 and $2.0 million for FY 2026-27 (Table 4).
Table 4 - General Funded Capital Improvement Projects
|
Department |
Project |
FY 2025-26 |
FY 2026-27 |
|
Public Works |
Street, Park and Parking Lot Lighting |
$300,000 |
$300,000 |
|
Recreation & Parks |
Park Pathway Repair & Replacement |
$305,000 |
$275,000 |
|
Recreation & Parks |
Park Maintenance |
$350,000 |
$400,000 |
|
Recreation & Parks |
ADA Transition Plan Implementation - Parks |
|
$100,000 |
|
Public Works |
ADA Transition Plan Implementation |
|
$250,000 |
|
Public Works |
City Buildings - Additional Projects |
$1,100,000 |
|
|
Public Works |
Street Safety |
$300,000 |
$300,000 |
|
Public Works |
Neighborhood Greenways |
$1,200,000 |
|
|
Public Works |
Stargell Ave Complete Streets (with Roundabouts) |
$100,000 |
|
|
Public Works |
Lincoln/Marshall/Pacific Corridor Improvements |
$1,800,000 |
$300,000 |
|
Public Works |
Bay Farm Island Adaptation |
$230,000 |
$75,000 |
|
Fire |
Comprehensive Emergency Water Supply System |
$400,000 |
|
|
|
Total |
$6,085,000 |
$2,000,000 |
Capital Budget Allocations from other Fund Sources
The full list of the projects proposed in the current budget are included in the CIP Budget Summary (Exhibit 3) with individual project sheets including a project description. Highlights include the following:
• Pavement Management: Resurface and repair local streets and roads; incorporate new signage and traffic striping to improve safety for all users.
• Sidewalks: Remove tripping hazards and replace sidewalks damaged by City-owned trees.
• Traffic Signals and Systems: Replace obsolete equipment and improve safety and multimodal operations at key intersections and corridors.
• Sanitary Sewer Rehabilitation: Replace sewer lines, lower laterals, and manholes, according to the City’s Sewer Master Plan.
• Stormwater Management: Provide improved performance at City-owned pump stations; replace critical storm water infrastructure; prevent trash and pollutants from entering the Bay.
• Buildings and Facilities: Maintain and improve City-owned buildings, including at Alameda Point.
• Relocation of Alameda’s Day Center and Safe Sheltering program - including Pro-Housing Program grant funding.
• Parks: Repairing tripping hazards and replacing park pathways, ADA improvements in park facilities, and a variety of safety related park maintenance projects.
• Transportation: Implement Safe Routes to School, design Lincoln/Marshall/Pacific Corridor improvements and Willie Stargell Completed Streets, install transit stop enhancements and advance the planning of the Oakland Alameda Estuary Bridge.
• Adaptation and Resiliency: Implement a pilot project to increase the availability of electric vehicle (EV) chargers, start building a comprehensive emergency water supply system, advance projects that prevent flooding and address sea level rise.
The $82.7 million investment from multiple funding sources during the two-year capital budget advances 17 Strategic Projects included in the City’s 2023 Strategic Plan (<https://www.alamedaca.gov/GOVERNMENT/Strategic-Plan>).
CIP Budget Changes Since the May Budget Workshops
Although there were no changes directed by City Council for the CIP Budget at the May budget workshops, the proposed capital budget incorporates the following changes (Table 5).
Table 5 - Capital Improvement Project Budget Updates
|
Project |
Description |
Funding Source |
FY 2025-26 |
FY 2026-27 |
|
Alameda Point Pier 2 Rehabilitation |
Based on available fund balance, reduced allocation. |
Alameda Point |
|
($2,000,000) |
|
Oakland-Alameda Estuary Adaptation Project |
Given uncertainty at federal level, funding is not secured; will return to City Council if grant appropriated. |
WRDA Grant |
($1,500,000) |
|
|
Total Capital Budget Changes |
($1,500,000) |
($2,000,000) |
Other minor technical and editorial adjustments were made to project descriptions for improved clarity.
Workforce Changes
This proposed budget includes minimal personnel additions from the General Fund. Those that are recommended have a minimal impact on the General Fund due to offsets by either other funds, increased revenue or corresponding expense reductions. Overall, existing staff are prioritized in this recommended budget through equity salary adjustments, a modest cost of living increase, Police retention, and part-time wage increase to mitigate turnover impacts. The City Manager recommends increasing the authorized position count (excluding AMP) from the 507 full-time-equivalent (FTE) positions approved in the FY 2024-25 Mid-Year Budget Update to a total of 514 FTEs in FY 2025-26, and 515 FTEs in FY 2026-27. Funding for the authorized and proposed positions is incorporated in the Proposed Budget. Positions changes are described in below in Table 6 and in Exhibit 4.
Table 6 - Workforce Changes
|
Department |
FY 2024-25 Authorized |
FY 2025-26 Proposed |
Change |
FY 2026-27 Proposed |
Change |
|
AMP |
91.0 |
94.0 |
+3.0 |
94.0 |
- |
|
Base Reuse and Economic Development |
11.0 |
12.0 |
+1.0 |
12.0 |
- |
|
City Attorney |
23.0 |
25.0 |
+2.0 |
25.0 |
- |
|
City Clerk |
4.0 |
4.0 |
- |
4.0 |
- |
|
City Manager/HHS |
10.0 |
11.0 |
+1.0 |
11.0 |
- |
|
Finance |
17.0 |
17.0 |
- |
17.0 |
- |
|
Fire |
121.0 |
121.0 |
- |
121.0 |
- |
|
Human Resources |
10.0 |
10.0 |
- |
10.0 |
- |
|
Information Technology* |
10.0 |
12.0 |
+2.0 |
12.0 |
- |
|
Library |
22.0 |
23.0 |
+2.0 (1.0) |
24.0 |
+1.0 |
|
Planning, Building & Transportation |
34.0 |
33.0 |
(1.0) |
33.0 |
- |
|
Police |
125.0 |
125.0 |
- |
125.0 |
- |
|
Public Works |
86.0 |
86.0 |
- |
86.0 |
- |
|
Recreation & Parks |
34.0 |
35.0 |
+1.0 |
35.0 |
- |
|
Total |
507.0 |
514.0 |
+7.0 |
515.0 |
+1.0 |
* To better deliver IT services, the City Manager proposes transferring an IT FTE from both PBT and Library to the IT Department.
The City Manager recommends adding a total of 11 new positions and the upgrade of one existing position for FY 2025-27, including three new positions at AMP. This includes adding 10 new authorized positions in FY 2025-26 and one new authorized position in FY 2026-27.
It is also recommended to amend the Management and Confidential Employees Association (MCEA) Salary Schedule to add the Victim Services Advocate classification. This new position is included in the number of new positions listed above. The Victim Services Advocate will support the City Attorney’s Office’s Prosecution Unit and create better response and efficiency to citizens. The salary range is listed below in Table 7.
Table 7 - MCEA Salary Schedule Amendment
|
|
Annual Salary |
|
Weekly Hours |
Classification (FLSA Exempt) |
Step 1 |
Step 2 |
Step 3 |
Step 4 |
Step 5 |
|
37.5 |
Victim Services Advocate |
$113,079 |
$118,733 |
$124,669 |
$130,903 |
$137,447 |
It is also recommended to amend the Alameda City Employees Association (ACEA) Salary Schedule to add the Park Technician classification. This new classification is included in the number of new positions listed above. The Park Technician will support Park Maintenance Services within the Recreation and Parks Department, ensuring effective and skilled services to the City’s parks and landscaping. The salary range is listed below in Table 8.
Table 8 - ACEA Salary Schedule Amendment
|
Hourly Rate |
|
Weekly Hours |
Classification (FLSA Non-Exempt) |
Step 1 |
Step 2 |
Step 3 |
Step 4 |
Step 5 |
Step 6 |
Step 7 |
Step 8 |
|
40 |
Park Technician |
$34.53 |
$36.24 |
$38.08 |
$39.96 |
$41.94 |
$44.04 |
$46.26 |
$48.55 |
Current Fiscal Year 2024-25 Adjustments Requested
For the FY 2025-27 Biennial Budget, staff is recommending budget adjustments, cost-saving and accounting items that first must be implemented in the current Fiscal Year (FY 2024-25). These items include:
• Delay contributions and excess fund balance transfers to the closed Police/Fire Pension 1079/1082 plans. At the end of FY 2024-25, staff estimates that Funds 101 and 102, the accounts that coincide with these closed pension funds, will have approximately $3.5 million in fund balance. The Pension Rate Stabilization Policy dictates staff send this balance to the PARS Section 115 Pension Trust Account. Staff recommends keeping the fund balance in Funds 101 and 102 and using these monies to pay for the pension benefits during the Biennial Budget period. At its current rate, this fund balance will cover at least 5 years of pension benefits.
• Due to the FY 2024-25 vacancy savings in Police, staff is proposing transferring $4.0 million from the General Fund to the Pension Stabilization Fund (Fund 720) for use during the Biennial Budget period. With this $4.0 million, staff proposes transferring $2.0 million per year back to the General Fund, $1.0 to aid in payment of the Unfunded Actuarial Liability (UAL) to CalPERS and the other $1.0 million to help cover one-time labor negotiation costs. These transfers are incorporated into the 2025-27 Biennial Budget.
• The Alameda Fire Department (AFD) proposes a new fund titled Capital Equipment Fund. This fund is proposed to ensure sustainable, long-term investment in critical fixed assets necessary for effective emergency response, personnel safety, and operational readiness. It will be funded through the annual allocation of up to 25% of any unexpended AFD operational budget remaining at the close of the fiscal year, with a maximum contribution of $250,000 per year. To promote fiscal responsibility and ensure adequate reserves for AFD capital needs, this new fund will be capped at a total of $2,000,000. These funds will be utilized to support the planned replacement and acquisition of essential equipment on a revolving basis. Most items identified for procurement are subject to replacement cycles ranging from 7 to 15 years, depending on usage, technological advancements, and compliance with OSHA and NFPA standards. Examples include: Self-contained Breathing Apparatus (SCBA), portable and mobile radios, ground and roof ladders, technical rescue equipment, vehicle extraction tools, fire hoses and nozzles, portable ventilation fans, mobile data terminals, cardiac monitors, LUCAS mechanical CPR devices, thermal imaging cameras, and ambulance gurneys and patient transport equipment. Disbursement of any surplus funds into this Capital Equipment Fund will require the final review and approval of the City Manager prior to transfer, ensuring alignment with broader City-wide financial planning and oversight policies.
• Similar to the previous proposal from AFD, staff proposes a new Capital Equipment Fund for ARPD. Appropriated funding will be used for future field and equipment replacements, with the first project funding replacement planned for the Estuary Park synthetic turf field replacement. The fund will be capped at $1,500,000 and will be funded through the annual allocation of up to 100% of any unexpended ARPD operational budget remaining at the end of the fiscal year, with a maximum contribution of $100,000 per year. Disbursement of any surplus funds into this Capital Equipment Fund will require the final review and approval of the City Manager prior to transfer, ensuring alignment with broader City-wide financial planning and oversight policies.
• Fleet Services is responsible for the operation and maintenance of the City’s fleet, which includes heavy-duty equipment such as fire engines, hydro-vacuum sewer cleaners, and street sweepers. Many repairs on these vehicles are performed by outside vendors. The Fleet Maintenance operating budget estimates these repair costs each year based on historical expenditures and the fleet's age. While vendor repair costs are expected to decrease as the fleet is gradually renewed, several major repairs have been necessary this fiscal year to keep critical equipment operational. Additional repairs are also scheduled for FY 2025-26. Combined with ongoing budget pressures, including rising fuel prices and increased parts costs, Fleet Services is requesting a $150,000 increase to the Fleet Maintenance expenditure budget this year. This increase, under line item 6014041580-52170, will cover the following immediate repair needs: $70,000 for two sewer cleaners used in daily operating and emergency response, $65,000 for four fire engines, and $15,000 for two street sweepers. Staff believes this request is necessary to ensure the continued reliability of essential City services.
• Staff is seeking acceptance of $129,371 in Homeless Housing, Assistance Prevention (HHAP) funding from Alameda County. Staff will use this funding towards Dignity Village Contract #G44010. Staff is also seeking approval to amend the following funding of Alameda Family Services contracts in order to fund the AFS School Based Mental Health program (as described in staff report 2025-4961 for City Council approval of CDBG funds):
o Move $45,932 of General Fund out of Contract #G44010 (Dignity Village)
o Move $45,932 of General Fund to the new AFS School Based Mental Health Program contract paired with $20,788 in CDBG dollars. The total contract amount is $66,720 and term is July 1, 2025 - June 30, 2026.
o Increase Contract #G44010 (Dignity Village) by $45,932 in Permanent Local Housing Allocation (PLHA) Program funds.
ALTERNATIVES
• Approve and adopt the budget and workforce changes as proposed in the staff report.
• Approve and adopt the proposed budget and workforce changes with any amendments made during tonight’s City Council meeting.
FINANCIAL IMPACT
Staff recommends adoption of the City’s FYs 2025-26 and 2026-27 Biennial Budget totaling $361,192,298 and $358,330,309, respectively, including all City funds and transfers (except for AMP). With the proposed budget, it is projected that the City will maintain an available fund balance (above the 25% operating and economic uncertainty reserves) in its General Fund of approximately $36.3 million at the end of the FY 2025-26 and $37.3 million at the end of FY 2026-27.
Included in the City’s FYs 2025-26 and 2026-27 biennial budget is the Successor Agency FYs 2025-26 and 2026-27 biennial budget totaling $9,963,256 and $9,965,345, respectively. The Successor Agency will fund its expenditures with Redevelopment Property Tax Trust Fund (RPTTF) revenues received in June and January of each year. Any other revenues received by the Successor Agency will be used to pay debt service and enforceable obligations.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents. This action implements the Strategic Priority, “Practice Fiscally Responsible and Inclusive Governance” in the City’s Strategic Plan.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378, because it involves governmental fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment; therefore, no further CEQA analysis is required.
CLIMATE IMPACT
There are no climate impacts associated with this action. However, the Capital Improvement Program Budget includes appropriations for continuance of the Climate Action and Resiliency Plan.
RECOMMENDATION
Adopt Resolutions (1) approving and adopting the City of Alameda Operating and Capital Budget for fiscal years 2025-26 and 2026-27 and (2) approving and adopting the Successor Agency to the Community Improvement Commission Budget for fiscal years 2025-26 and 2026-27; and
Adopt a Resolution approving workforce changes and amending the Management and Confidential Employees Association (MCEA) and Alameda City Employees Association (ACEA) Salary Schedules in FYs 2025-26 and 2026-27 effective July 1, 2025.
Respectfully submitted,
Ross McCarthy, Finance Director
Erin Smith, Public Works Director
Submitted by,
Ecaterina Burton, Budget Manager
Exhibits:
1. Budget Transmittal Letter
2. Proposed Budget Summary
3. Proposed Capital Improvement Program Budget Summary
4. Recommended Workforce Changes