Title
Adoption of a Resolution Amending the Fiscal Year 2025-26 Budget; and
Adoption of a Resolution Approving Workforce Changes for Fiscal Year 2025-26. [City Council and SACIC] (Finance 10024056)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
This report provides a review and update to the Fiscal Year (FY) 2025-26 Operating Budget through June 30, 2026. Budget adjustments are proposed for the General Fund, special revenue funds, capital projects fund, debt service fund, internal service funds, enterprise fund, and trust/fiduciary funds. The proposed adjustments would increase the General Fund revenue projection by $549,494, from $146.8 million to $147.3 million, and increase the General Fund operating expense budget by $1,188,216. Overall, the General Fund expense adjustments exceed revenue adjustments by $634,722.
For non-General Fund programs, staff project an increase in revenues of $1,656,349 excluding transfers in, and propose an additional $2,644,786 in expense appropriations, excluding transfers out.
Further, staff recommends the upgrade of two positions for Alameda Municipal Power (AMP).
BACKGROUND
The City Council adopted the Biennial Budget for FYs 2025-26 and 2026-27 on June 17, 2025. This report updates the FY 2025-26 financial projections for the General Fund and proposes current year budget adjustments for various City of Alameda (City) funds to reflect and respond to the City’s current financial condition, address urgent and unforeseen needs, and incorporate technical corrections.
The list of budget adjustments to the General Fund and other funds is attached as Exhibit 1 and the updated General Fund Budget Summary is attached as Exhibit 2.
DISCUSSION
I. General Fund Revenues
General Fund revenues in FY 2025-26 are projected to net increase by $549,494, to $147.3 million in total. Staff recommend the following changes to General Fund revenue forecast:
A1-A3. Non-Department General Fund Revenue Update
Intergovernmental Revenue - Increase $1,000,000
Technical correction for Fire Department’s STRIKE team.
Fines, Forfeitures, Penalties - Increase $35,000
Technical correction to Fire Department’s False Alarm Service program.
Miscellaneous Mid-Year Adjustments - Decrease $809,173
Technical corrections in other miscellaneous revenues.
A4. Fire Inspection Revenues $9,000
For FY25-26, the Fire Department has collected additional revenue above the current budget. This revenue will be used to offset part of the cost for their Administrative Facility relocation costs (Item C9 in General Fund Operating Expenses section).
A5. Recreation & Park Classes Revenue $190,000
The Recreation & Parks Department classes are anticipated to generate additional revenue due to their popularity and demand. This revenue will be used to pay for outside contractors who make these classes possible (Item C4). In addition, $40,000 of this revenue will be used one time to offset the cost for the Sweeney Trail Connector engineering costs (Item C10 in General Fund Operating Expenses section).
A6. Area Agency for Aging (AAA) Grant of $30,000 for Mastick Senior Center
Technical correction for the Recreation & Parks Department budget. This is an annual grant that ARPD receives from the County to support its programming at the Mastick Senior Center, but the grant amount varies from year-to-year.
A7. Miscellaneous Revenue $94,567
The Recreation & Parks Department has collected $94,567 in miscellaneous revenue that needs to be allocated. This revenue will be used to offset part of the cost for the Sweeney Trail Connector engineering costs (Item C10 in General Fund Operating Expenses section).
II. General Fund Operating Expenses
The following General Fund expense budget adjustments total an increase in requested appropriations of $1,188,216, of which $959,516 are for one-time operational needs and the other $228,700 are for ongoing operational needs.
C1. Planning, Building, and Transportation (PBT) - Professional Development for Sustainability Division - $3,700
Staff is requesting this addition to support ongoing participation in various state and national professional organizations and conferences on sustainability and climate adaptation to secure support for local efforts. Participating in these cohorts can help bring additional funding to the City. For example, joining the Coastal California Accelerator cohort leveraged up to $100,000 for adaptation planning work. This funding for travel, registration and per diem costs enables staff to engage with professional organizations critical to implementing the Climate Action Resiliency Plan (CARP) and advance sea level rise adaptation projects. This is a new focus area for the City and requires ongoing professional development and engagement with practitioners.
C2, D9. PBT - City Attorney Staff & Student Intern Part-Time Pay for Sustainability Division - $15,000
Implementation of CARP and climate adaptation efforts require City Attorney review and input. This proposal corrects the current practice of using building permit revenues to cover City Attorney staff time on Sustainability issues by allocating $10,000 from the General Fund. Additionally, $5,000 from the General Fund will continue to fund an Alameda student intern to support youth participation for the CARP.
C3. City Attorney - Alameda County District Attorney’s filing software - $60,000
Alameda County District Attorney’s Office uses an in-house proprietary filing software (RD3) for its filing criminal cases with the Alameda County Superior Court and requires a contribution from all participating jurisdictions to use this software. Currently, RD3 is the only way to electronically file criminal cases with the Alameda County Superior Court. Staff is actively seeking authorization from the Superior Court to direct file, without using RD3, and avoid this expense in the future. Historically, the Court has demonstrated reluctance due to its limited technology budget.
C4. Recreation & Parks - Outside contractors for classes - $150,000
Outside contractors provide additional variety to Recreation & Parks Department (ARPD) classes while bringing in additional revenue. This request pairs with item A5, where staff is increasing revenue to match current participation trends while also raising expenses to pay outside contractors to maintain the current popular class schedule.
C5. Public Works - Encinal/High Street Fence Repair - $20,000
The fence is damaged and deteriorated and requires replacement. Since it is not located in an area with a Special Assessment, General Fund dollars within the street maintenance budget must be used to make the necessary repairs.
C6, D16. Public Works - Sewer Main Damage Overtime - $61,013
Staff is requesting this one-time overtime to pay for unanticipated overtime staff worked to handle an emergency where one of the City’s sewer force mains was damaged, resulting in a significant overflow. To prevent further discharge, Public Works established a bypass pumping system until repairs could be completed. Continuous 24-hour monitoring of the bypass system was necessary to prevent additional overflows. As a result, substantial overtime costs were incurred and this budget request accounts for overtime worked by all staff ($16,865 is the General Fund portion while $44,148 would go between various other funds).
C7 & C8. Public Works & IT - AMP Undergrounding Project costs - $372,651
The Underground Utility District (UUD) 38 project removes all overhead utilities along State Route 61 from High Street to Encinal Avenue. AMP is the lead agency for the City's Undergrounding Program and manages and coordinates work between all joint trench partners, including Public Works (for streetlights) and Information Technology (for City fiber). Each participating utility and City department is responsible for the costs associated with its own facilities, including conduit, structures, service laterals and related installation work. Because the Undergrounding Program is funded by electric ratepayer funds, these funds cannot be used to pay for City services such as street lighting or City fiber. During construction, the project encountered unexpected ground conditions and permitting delays that increased costs and extended the schedule, resulting in higher construction and support costs for all parties ($108,651 for IT’s portion and $264,000 for Public Work’s streetlight portion).
C9. Fire - Administrative Facility Relocation and Setup costs - $250,000
This request supports one-time costs associated with relocating Fire Administration and related divisions to a new leased facility at 1001 Marina Village Parkway. Total costs to relocate are $500,000, however, department is utilizing existing budget in other accounts to cover half the costs. This request is slightly offset by the revenue item A4, resulting in a net cost of $241,000.
C10. Recreation & Parks - Sweeney Trail Connector Engineering costs - $300,000
This one-time request supports project costs of soil testing, soil management plan approval and Union Pacific coordination for the trail connectors at 8th Street and Wood Street on the south side of Jean Sweeney Park. It is offset by some revenue items (A5 & A7), which brings the net cost to $165,433.
III. Non-General Fund Programs
In addition to the General Fund amendments discussed above, the following adjustments are proposed for programs outside of the General Fund. These adjustments are included in the list of budget adjustments presented on Exhibit 1.
D1. Fund 209 PBT - California Department of Justice Tobacco Enforcement Grant
PBT requests City Council authority to accept a grant from the California Department of Justice for its Tobacco Enforcement Grant. This will be allocated to the Code Enforcement division for their Tobacco Retailer License enforcement program as reimbursement for City staff time and expenditures on retailer inspections, minor decoy operations, and retailer education and enforcement, rolling across three fiscal years.
Totals to $234,287.
D2. Fund 209 PBT - Uniforms and Boots required through MOU
Per the recent ACEA MOU negotiation, Code Enforcement and Building Inspector staff have a boot allowance. In addition, uniforms are being implemented to comply with state law (SB 296) for inspector safety. This request will be fully funded by permit fee revenue. Totals to $5,000.
D3. Fund 210 Library - Summer Reading Program
The City received $118,200 as a donation from the Friends of the Library Association and will use this donation to fund its summer reading program. Total cost is net $0.
D4. Fund 217 Open Space Improvement & Maintenance - Irrigation systems installation, landscape & tree maintenance
ARPD received one-time funds from the recent sale of the Donut Shop parking lot which has not been appropriated or allocated. This request would appropriate this money for several one-time uses: the installation of irrigation systems at the O’Club and Main Steet Linear Park for improved water efficiency and reduced staff time for manual watering; landscape maintenance at the O’Club; and tree maintenance at Enterprise Park. Totals to $140,000.
D5. Fund 221 Police Grants - Justice Assistant Grant (JAG) Grant
Police Department requests City Council authority to accept the federal JAG grant in the amount of $13,356 from the Alameda County Sheriff’s Office. These grant funds will be utilized for the purchase of computers. Totals to net $0.
D6. Fund 221 Police Grants - Community Oriented Policing Services (COPS) Grant
Police Department requests City Council authority to true up its COPS grant budget by appropriating available fund balance for this grant. The City receives this ongoing grant and utilizes it to pay for equipment and training. Totals to net $0.
D7. Fund 222 Grants - Alameda County Transportation Commission (CTC) grants for Water Shuttle Services
PBT requests City Council authority to accept two grants from Alameda CTC to continue the water shuttle service. One grant comes from the Alameda County’s FY 2025-26 Transportation Fund for Clean Air Program (TFCA) for the amount of $40,000. The other grant comes from Alameda CTC for the amount of $891,000. The City will use these funds to offer expanded water shuttle operations from March 2026 to December 2027, providing additional non-auto travel options during the Oakland Alameda Access Project construction. Totals to net $0.
D8. Fund 244 Bike/Pedestrian Annual Projects - Wooden Bridge Plan
Planned use of fund balance to apply for a Caltrans Sustainable Communities grant and utilize these funds as the matching funds requirement for long-term planning to replace the Wooden Bridge. If Caltrans does not award this competitive grant to this project, PBT will use the funds to support the 5-year update to the Vision Zero Action Plan. Totals to $60,000.
D9. Fund 244 Bike/Pedestrian Annual Projects & Fund 245 Multimodal Annual Projects - City Attorney Staff
Implementation of Transportation safety efforts require City Attorney input and review. This proposal corrects the current practice where building permit revenues are covering City Attorney staff time on Transportation issues by allocating $10,000 from Transportation Funds 244 & 245. Totals to $10,000.
D10. Fund 264 Stormwater - Regulatory Permit System cost increase
The City's stormwater system is required to have an NPDES permit in order to operate the system. The annual cost of this permit has increased from previous years. Totals to $4,193.
D11. Fund 281 Alameda Point Community Facilities District 17-1 - Property management services
The City gives 40% of its CFD 17-1 funds collected from private property owners to Alameda Transportation Management Association (ATMA) to pay for transportation demand management services. This request “trues up” the current budget to go to the ATMA based on excess revenue actuals from FY 2024-25 and FY 2025-26 anticipated revenue. Totals to $109,383.
D12. Fund 290 & 291 Alameda Point - Insurance for Property Management services
The new property management agreement for Alameda Point included an expense of $500,000, to be passed through to the City, for additional insurance coverage addressing liability concerns from the City and its umbrella insurance provider. As this process was completed in April 2025, staff were unable to incorporate this request into the FY 2025-27 Biennial budget process. Totals to $500,000.
D13. Fund 310 Capital Improvement Projects - Bay Farm C71100 Project transfer of funds
PBT requests moving funding from year 2 of the FY 2025-27 Biennial Budget of $75,000 to the current year so that ongoing work for the Bay Farm Island Adaptation Project can proceed sooner than originally planned. This transfer of funds will also be shown in the FY 2026-27 Mid-Cycle report. Totals to $75,000.
D14. Fund 310 Capital Improvement Projects - Alameda County TFCA grant for bike parking in CIP project C63000 Project transfer of funds
PBT requests City Council authority to accept a grant from Alameda CTC for its City-wide bike rack parking program. On October 23, 2025, the Alameda CTC approved the Alameda County’s FY 2025-26 Transportation Fund for Clean Air Program (TFCA) that included a $37,000 grant award to the City’s bike parking program. Totals to net $0.
D15. Fund 310 Capital Improvement Projects - Public EV Charging C66300
PBT requests City Council authority to accept a grant from Alameda CTC for its public EV charging program. On October 23, 2025, the Alameda CTC approved the Alameda County’s FY 2025-26 Transportation Fund for Clean Air Program (TFCA) that included a $136,000 grant award to the City to install a public EV charger at Jean Sweeney Park. Totals to net $0.
D16. Public Works - Facility Condition Assessment Funding - $350,000
This request is to pay for the Facility Condition Assessment report. This report is needed to help the City with its 10-year capital plan in time for the FY 2027-29 Biennial Budget process. The last completed Facility Condition Assessment was in 2014.
D17. Fund 211 Gas Tax/Fund 216 Tidelands/Fund 260 Solid Waste Surcharge/Fund 264 Stormwater/Fund 276 Assessment District Admin/Fund 279 Alameda Landing Municipal Service District/ Fund 280 Bayport Municipal Services District /Fund 281 Alameda Point Community Facilities District 17-1/Fund 285 Marina Cove II Community Facilities District 14-1/Fund 501 Sewer Services/Fund 603 Facility Maintenance & Replacement - Sewer Main Damage Overtime
Staff is requesting this one-time overtime to pay for unanticipated overtime staff worked to handle an emergency where one of the City’s sewer force mains was damaged, resulting in a significant overflow. To prevent further discharge, Public Works established a bypass pumping system until repairs could be completed. Continuous 24-hour monitoring of the bypass system was necessary to prevent additional overflows. As a result, substantial overtime costs were incurred and this budget request accounts for overtime worked by all staff ($16,865 is the General Fund portion while $44,148 would go between various other funds). Item C6 is the General Fund portion, while this item is the portion across all non-general funds. Totals to $44,148.
IV. Workforce Changes
The FY 2025-26 budget includes funding for 514 allocated full-time positions, excluding the 91 full-time positions separately funded for AMP. As Exhibit 3 shows, the recommended workforce changes are two position upgrades for AMP. See chart below for a summary.
|
Dept |
Request |
+/- FTE |
Annual Cost |
Funding Source |
|
AMP |
Upgrade one Procurement Analyst to one Senior Procurement Analyst Upgrade one Customer Service Representative to one Lead Customer Service Representative |
- |
N/A |
AMP |
The effective date for the approved workforce changes would be March 3, 2026 pending City Council approval. The annual cost of these upgraded positions were approved by the Public Utility Board on January 12, 2026.
ALTERNATIVES
• Authorize the budget amendments proposed in the staff report.
• City Council may take no action, in which case the previously adopted and revised FY 2025-26 Biennial budget would remain in effect.
• City Council may provide further direction on these proposed budget amendments.
FINANCIAL IMPACT
The proposed FY 2025-26 budget adjustments will increase the General Fund revenue projection by $415,827 in ongoing funds and increase by $137,667 in one-time funds to $147.3 million in total. The proposed expense adjustments include $1,188,216 in additional operating expenses, of which $959,516 are for one-time operational needs and the other $228,700 are for ongoing operational needs. With the one-time use of fund balance of $9,016,739 previously approved by City Council, the total General Fund expenses are $154,754,792. In total, staff project General Fund expenses to exceed revenues by approximately an additional $3.1 million at year-end.
The unaudited General Fund residual unassigned fund balance at the end of FY 2024-25 was $13.4 million. With the General Fund’s proposed Mid-Year operating expense budget of $154.8 million and projected revenues of $147.3 million, the General Fund residual unassigned fund balance is projected to be approximately $10.8 million at year-end.
The net impact of the proposed adjustments on all other funds will be an increase in the revenue projection by $1,656,349 excluding transfers in, and an additional $2,644,786 in expenditure authority, excluding interfund transfers.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no climate impacts associated with this action; implementation of the Climate Action and Resiliency Plan continues to move ahead with available funding.
RECOMMENDATION
Adopt a resolution amending the FY 2025-26 Operating Budget and adopt a resolution approving workforce changes for FY 2025-26.
Respectfully submitted,
Ross McCarthy, Finance Director
By,
Ecaterina Burton, Budget Manager
Exhibits:
1. FY 2025-26 Mid-Year Budget Adjustments
2. General Fund Budget Summary
3. Recommended Workforce Changes