Hayward budget team approves $12.6M deficit review and fall budget revision

In the heart of Hayward City Hall, a sense of urgency filled the air as city officials gathered for the Hayward City Council meeting on May 13, 2025. The discussion centered around a pressing financial challenge: a looming structural deficit of $12.6 million that threatens the city’s budget and services.

City Manager Alvarez and the executive team laid out a stark picture of the city’s financial health. They emphasized the need for immediate action to address the deficit, which, if left unchecked, could escalate to $14 million or more in the coming years. The city’s reliance on vacancy savings—a strategy that banks on unfilled positions to cushion the budget—was highlighted as a critical but risky tool. This year, Hayward has budgeted for a 5% vacancy savings, amounting to nearly $9.8 million. However, with current vacancy rates reaching 10%, officials warned that this approach could lead to unintended costs if temporary or contract workers are needed to fill gaps.

The council also discussed department-wide reductions, with a notable 2% cut across various sectors. However, the police and fire departments, which account for significant portions of the budget, were not included in this blanket reduction. Instead, the fire department is facing a drastic cut from $7 million to $3.5 million, alongside the suspension of a key program, Mihoo, which will save an additional $1.5 million. The IT department has deferred $750,000 in projects, reflecting a broader strategy to manage expenditures.

As the meeting progressed, the conversation shifted to the need for a comprehensive review of police and fire services. Officials acknowledged that the current funding model for these departments is unsustainable, likening it to a structure held together by "duct tape and band-aids." This recognition has prompted a call for a fall budget revision, allowing more time for thorough analysis and strategic planning.

The council's discussions underscored a critical moment for Hayward, as leaders grapple with the realities of fiscal constraints while striving to maintain essential services for residents. The proposed fall revise aims to provide a necessary pause—a "period of respite"—to reassess priorities and ensure the city can navigate its financial challenges effectively. As the meeting concluded, the path forward remained uncertain, but the commitment to addressing the structural deficit was clear, leaving residents and officials alike with much to ponder in the months ahead.