Logo courtesy of City of West Sacramento

WEST SACRAMENTO, CA (MPG) – City Council voted 4-0 at their June 17 meeting to adopt a resolution approving the city’s 2026-27 Operations and Maintenance (O&M) and Capital Improvements Program (CIP) budget — a budget staff called a “status quo” document that continues current services and commitments while officials review impacts of slowing economic conditions and operational challenges facing a growing city.

The city is projecting $90.55 million in General Fund revenue in the coming budget year against $92.5 million in proposed expenses, leaving a $1.9 million gap. When combined with $612,930 in ongoing O&M budget commitments that include proposed budget adjustments and financing payments for the city’s two new fire engines, that budget shortfall increases to just over $2.56 million.

Finance Director Roberta Raper said the shortfall is a result of declining property and sales tax revenues, both of which are falling below projections even for the 2025-26 budget.

“Those together make up about three-quarters of our General Fund revenues, and both are performing below projections,” she said.

The current year budget shows $87.5 million in ongoing revenues balanced against $88.9 million in expenses. To fill the gap, Raper said staff are proposing using $1.6 million in budget savings from payments to the California Public Employees Retirement System (PERS) due to position vacancies along with foregoing the annual contribution to the PERS Supplemental Trust of $187,776.

To address the 2026-27 shortfall, staff is proposing suspending the annual $1 million contribution to the General Facilities Reserve fund for maintenance projects while also suspending the savings contribution in a pension line item to the Section 115 pension trust fund. Additionally, eligible retiree health costs will be reimbursed out of the Other Post Employment Benefits (OPEB) and the city will utilize revenue from one-time available fund balances.

Raper called this a “measured response” to the shortfall to give staff and council time to look at more long-term solutions to the economic slowdown, a report she said they hope to give council later this year.

The slowdown is also impacting revenues to West Sacramento voter-approved tax measures, with the five measures showing proposed expenses on specific categories of just over $44 million against projected revenue of $40.84 million. Raper said the good news is that due to conservative budgeting steps taken by the current and previous city councils, reserves in the ballot measures accounts along with the General Fund are healthy, with over $20 million in the ballot measures and $21.14 million city funds projected as ending fund balances.

“They’re down, not a lot, but they’re down,” Raper said of the ballot measure projections. “The key takeaway, though, is the city remains financially stable.”

The proposed budget includes 11 new staff positions, bringing the city payroll to 518.55 fulltime equivalent employees. Two positions, one each in the police and fire departments, are funded by Measure O, while eight, including two half-time positions, are in the water or sewer departments.

Also included are a media production/audio-visual program technician and a position change from administrative analyst to program manager in the City Manager’s office. The total for the staff requests comes to just over $2.14 million.

Several council members questioned these staff moves. Councilwoman Norma Alcaola asked if they were in response to population growth while Councilwoman Danté Early questioned the appearance of more hiring given the slowing revenue projections.

Finance Manager Becky Robertson said the bulk of the new positions were in Public Works positions and recommended by a recently completed and council-approved study recommending utility rate increases to cover needed infrastructure improvements. Raper added only a small percentage of rate increase revenue went to staffing.

“The funding for those (PW positions) is generated through service revenue by people who are utilizing the water and sewer,” Robertson said. “Those have their own separate funding and the revenues received can only be used in those areas.”

City Manager Aaron Laurel added that the media production position would have a budget offset by bringing in-house functions the city would normally contract with outside organizations to provide.

The budget includes $29.38 million in supplemental requests across all funds — $25.2 million in one-time requests and about $4.2 million in ongoing appropriations. Largest among all of these is $17.26 million in CIP projects, funded partly by $701,490 in grant funding.

The rest is $9.98 million in O&M requests that include just over $4.3 million in vehicles and equipment and $3.68 million in supplies and services. Among items requested are replacement of self-contained breathing apparatus for firefighters, 11 police patrol vehicle replacements and 16 Public Works maintenance and equipment vehicles.

Projects proposed for CIP include implementation of the Bryte Park Master Plan, design work on the Jefferson Boulevard Complete Streets improvements and Clarksburg Branch Line Trail lighting improvements, pre-design work on relocation of the Police Department and the design phase of the downtown Sacramento to Sutter Health Park Streetcar Light Rail extension.

The latter project caused concern among council members, with Early asking if the city was locked into it given the $5.25 million appropriated in the current budget, funding that comes from Measure V. Laurel noted the city was in a contract with Sacramento Regional Transit District for at least design of the project and the money wasn’t a new commitment.

“Do we have to do it?” Early asked.

“You’re just making good on money that’s already been approved by the council,” Laurel said. He added the city has been made aware of major changes to the project that could present challenges and would require a council decision in the near future.

The revelation left council members with more concerns articulated by Mayor Martha Guerrero expressing reluctance to agree to providing the funding requested in the budget if changes were coming. Laurel said it appeared the $5.25 million figure might include some construction costs and estimated that about $2.5 million was needed for the remaining design work.

Laurel said staff would put together an itemized list of what was remaining and present it to council at a future meeting as early as August. Until then, council included an amendment to the budget acceptance resolution to remove the 2027 budgeted amount for light rail until such time as they were made aware of and voted on potential changes.