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The San Ramon City Council is set to continue discussions on the city’s budget for the next fiscal year as it contends with an ongoing structural deficit that has shrunk since last year but continues to pose a challenge.
The $148.5 million budget proposed for the coming fiscal year breaks down into $71.9 million in general fund spending, $37.1 million in special revenue funds spending, $5.2 million in debt service funds spending, $20.9 million in internal service funds spending and $13.4 million in capital spending.
In addition to spending, the package is set to increase the city’s general fund by $2.9 million, replenishing some of its coffers following a projected budget shortfall of $17.6 million in the last fiscal year that led city officials to pursue the passage of Measure N – the 1% sales tax measures approved by voters in November 2024, which went into effect earlier this year – tap into its reserves, and cut spending across all of its departments.
“The City is now entering a new fiscal era that will be marked by transparent and frequent communications around topics of fiscal sustainability,” City Manager Steven Spedowfski wrote in the proposed budget. “The FY26 budget continues to reflect the structural deficit, which indicates that on-going cost to provide current services is outpacing the growth rate of the city’s ongoing revenues.”
That forecast of an ongoing shortfall between revenue and costs of city provided services is ongoing despite the passage of Measure N and other cost-cutting measures, with the proposed budget for the 2025-26 fiscal year marking the beginning of an ongoing effort to balance the city’s budget over the course of the 10 years that the sales tax measure was approved for.
“The FY26 financial plan described herein represents status quo operations and is intended to function as a baseline for the future work on fiscal stabilization,” Spedowfski wrote.
While the council is poised to vote on adopting the proposed budget this week, financial challenges at the local, state and national level are set to continue being up for discussion should the spending package be approved.
“Discussions of the city’s finances will become a regular occurrence with the City Council and the community in the coming months and years,” Spedowfski wrote.
“The city has established that while ongoing revenues are insufficient to cover ongoing expenditures, the city continues to operate with a deficit,” he added. “Since Measure N is in place for ten years only, council is considering these funds as ten one-time allocations in funds that are enabling the city to cover operational deficits as changes are made to establish budget stabilization.”
Despite the ongoing budget deficit, the budget for the upcoming fiscal year proposes an additional $7 million in general fund spending compared to the current fiscal year’s budget thanks to a number of factors including inflation and increased wage, benefit and retirement costs, as well as utility costs.
That breaks down to a $1.1 million increase in city administration spending, $100,000 in finance spending, $800,000 in community development spending, $2.4 million in police services spending, $1.2 million in public works spending, and $1.4 million in parks and community services spending — all areas that were slashed in budget cuts included in the current fiscal year’s budget.
While Measure N produced less revenue than expected in its initial months, the additional sales tax funding is projected to balance next year’s budget in the short term, with city officials continuing to seek other ways of reducing expenses and increasing revenues. This includes continuing to support new housing developments – with property taxes serving as the city’s top revenue source – and seeking to bolster the local economy.
In terms of cost-cutting, layoffs to city workers could be on the horizon in the future beyond those that were included in the current year’s budget.
“The city is very cautious in how it spends its tax dollars and prides itself on running a high-service level organization utilizing a lean staffing model, including the use of temporary and limited duration employees for seasonal or periodic work and the use of competitively-bid contracts for routine maintenance of much of the city’s landscape,” Spedowfski wrote. “The city will continue to explore ways of reducing the cost of labor, which is its largest expenditure.”
Following the adoption of next year’s budget, city staff are poised to work with the council on a plan for future budget and financial discussions at public meetings.
The San Ramon City Council is set to meet at 7 p.m. Tuesday (May 27). The agenda is available here.Â
In other business
*The council is set to receive a report and provide direction to the Teen Council.
*The council is set to provide direction to staff on the interview process for applicants for the Planning and Parks and Community Services commissions.
