As Richmond readies its 2026-27 budget, city leaders warned the city council Tuesday that it’s facing unprecedented economic uncertainties and must plan accordingly.
The draft general fund budget calls for spending $275.3 million, leaving a surplus of about $48 million. The balancing of the spending plan is heavily dependent on leaving positions unfilled, with city finance staff saying a 12% vacancy rate will result in about $16.5 million in savings.
City Manager Shasa Curl, who recently announced she will retire later this year, pushed back on any suggestion that the vacancy rate reflects a reluctance to hire more staff.
She said the vacancy rate appears high because since 2021 the city has added new positions that haven’t been filled.
According to the budget report, personnel costs are driving some of the fiscal strain, with costs projected to reach $201 million for fiscal year 2026-2027, up from $146 million in 2021-2022.
Additionally, the city has seen a number of health premium increases for CalPERS, its retiree health care contributions and the city’s required post-retirement benefits.
“Our CalPERS medical premiums are nearly $21 million,” Curl said. “We have nearly $3 million in OPEB (other post-employment benefits) and we are continuing to face significant pressures on our budget due to increased volatility in the national and global economy.”
Another potential issue is the ongoing labor contract negotiations with the Richmond Police Officers Association (RPOA), Richmond Police Management Association and the Richmond Fire Management Association. The proposed budget does not cover any potential employee salary increases.
City department heads share how stretched thin their staffs are
On the state level, a proposed pension reform bill, Assembly Bill 1383, may lower the retirement age for public safety employees from 57 to 55, allowing earlier retirement at the same benefit rate, something that could have a $1 million fiscal impact in Richmond beginning as early as next year and would compound “long-term effects” on the city’s ongoing pension liability issues, Curl said.
“This is an example of another potential unfunded mandate that the city will need to try and address,” Curl said.
Curl referenced the global economic uncertainty as another fiscal risk, citing instability in the oil markets that could affect the city’s operating costs.
“This is having a tremendous impact on the global economy,” she said. “We’re not sure of how this is going to impact us long term other than continued inflation.”
Accompanying the budget overview presented by Curl and the city’s finance department, three department heads — Community Development Director Lina Velasco, police Chief Timothy Simmons and Public Works Director Daniel Chavarria — delivered presentations that collectively illustrate the pressures the city faces.
Velasco said that providing “core services” account for the majority of her staff’s time and that special projects have stretched their bandwidth.
The department oversees the city’s building permits, code enforcement, housing programs, and planning and implementation of the five-year, $35 million Transformative Climate Communities grant (TCC).
Velasco noted that the department is managing $296 million in grants — which account for 40% of the city’s total budget — without a grant-management team.
“This is all work that’s being consumed by existing staff,” Velsaco said.
Describing the grant life cycle, Velasco said that most grants operate on a reimbursement basis, requiring the city to spend the money before it gets anything back.
“Receiving the award is one thing, but then it’s implementation,” Velasco said. “A lot of these grants now want us to have community engagement, which is important to us as well, but then also require regular reporting and invoicing to make sure that we’re able to seek reimbursements on a timely basis so we’re not drawing on the city funds.”
Velasco also warned that grant-funded projects are at-risk if staff aren’t managing them properly.
“If we’re having a lot of external projects come forward, it sort of detracts our attention away from the projects we need to complete and then those projects are not able to be completed on time and within budget,” Velasco said. “That results in us coming back to the council asking for a subsidy to close those gaps in project delivery.”
Police department pulls officers from their beats to do jail transports
Simmons reported that, of the Richmond Police Department’s 147 sworn officer positions, there are 18 vacancies and 13 civilian vacancies as of May 4 in addition to a number of sworn staff that are on injury leave, light duty and administrative leave. The department has 71 fulltime, non-sworn positions.
The department’s staffing shortage at its temporary holding facility means officers must take time away from their beat to take detainees to the Martinez jail.
“I bring this up because when we are not able to properly staff or keep our temporary holding facility open that requires officers to leave our jurisdiction, leave our city, anywhere from 90 minutes to two hours to the Martinez Detention Facility, and the booking process there is very laborious and backed up,” Simmons said. “Instead of being in our city providing emergency response and calls for service, they are spending that time waiting in a line or dealing with the county in Martinez.”
Simmons said they have recently hired more officers and have nine in the academy. But 40% of the patrol officers are in their probationary period.
That’s worth noting, he said, because it means many of these officers need a lot of supervision and training, putting a time strain on the senior employees.
Chavarria pointed to a list of 34 new projects that city council members have requested since January 2025 and cautioned the council to focus on finishing what has been started.
Currently, the city has $1.1 billion in unfunded capital improvement programs, according to Curl, and is also preparing to end its contract with Veolia for wastewater services.
“Many of the council-directed initiatives are valuable and align with community needs. But each one requires stop time, procedures, public communication, enforcement coordination, technology, legal review, and field implementation,” Chavarria said. “The more directions we move at the same time, the harder it becomes to deliver the core infrastructure work that our residents expect.”
The city is set to approve its budget on June 23.
