Title
Recommendation to Approve the Budget Policy. (Finance)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
This report provides a summary of the City of Alameda's (City) first Budget Policy. This Budget Policy was first presented to City Council on October 21, 2025, as a part of the Fiscal Sustainability Workshop.
BACKGROUND
The City Council adopted the Biennial Budget for Fiscal Years (FY) 2025-27 on June 17, 2025, which incorporates direction received during two budget workshops in May. The budget establishes the financial framework for City operations, with the General Fund, the main operating fund, accounting for 42% ($152.2 million) of the total budget ($361.2 million) in FY 2025-26 and 43% ($153.8 million) of the total budget ($358.3 million) in FY 2026-27. The City's budget funds 514 full time equivalent positions (FTEs) in 2025-26 and 515 FTEs in 2026-2027, excluding Alameda Municipal Power (AMP) positions.
With projected revenues covering 96.5% of ongoing expenses, the City faced a budget shortfall for the remaining 3.5%. To balance the budget, $6.2 million of residual fund balance (surplus) was used in FY 2025-26 and $3.1 million in FY 2026-27. The fund balance above required reserve was estimated at $21.4 million to begin FY 2025-26, and after using a portion to close the shortfall and City Council approved capital project expenditures, staff estimates a fund balance of $9.5 million as of June 30, 2027. This fund balance is in addition to the City's required reserves of 25% of the City's General Fund budget, intended to fund several months of operations in case of a natural disaster or sudden economic downturn.
At the Fiscal Sustainability Workshop on October 21, 2025, City staff returned to City Council with a fall budget update to provide ongoing communications on the City's financial status and to identify policies to support a stable City budget, including a draft Budget Poli...
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