Walnut Creek staff outline $108 million two‑year capital budget and proposed FY26–27 general fund balancing steps

City staff presented the proposed fiscal year 2026–27 operating budget and the first two‑year cycle of a 10‑year capital improvement program at the Walnut Creek City Council meeting on May 6, asking the council for feedback before the Finance Committee review and final adoption in June.

The proposal shows a projected ongoing general‑fund deficit of $4.97 million in FY26 and $6.33 million in FY27 before budget balancing actions. To address that gap, staff proposed a package of revenue adjustments, operations and maintenance reductions, personnel changes and one‑time measures, and asked the council to provide direction before returning to Finance Committee on May 15 and scheduled adoption on June 17.

Why this matters: the draft budget funds core services (police, public works, arts and recreation) while preserving reserves for defined emergencies, but relies on short‑term budget balancing steps that staff said should be monitored and reversed when revenues normalize. The capital program includes several grant‑funded transportation and bridge projects and advances the Heather Farm Aquatic and Community Center toward construction, which will require long‑term financing.

Staff presentation and topline figures Rindy Azzavito, the city’s budget and procurement manager, framed the council’s role: “The action that's requested tonight is that you provide input and feedback regarding the development of the balanced budget for FY 2627.” She said baseline revenues and expenditures would produce the multi‑million‑dollar deficits cited above before any balancing actions.

Staff projected general‑fund revenues of roughly $107.35 million in FY26 and estimated general‑fund expenditures of about $106.99 million in FY26 and $110.90 million in FY27 after the package of proposed adjustments. Major revenue drivers noted were property tax, sales tax and transient occupancy tax; staff described property tax growth as slowed by commercial vacancies and sales tax growth as flat in FY26 with modest recovery in FY27.

Balancing strategies proposed Staff outlined four buckets of balancing actions: (1) modest revenue changes (fee updates and transfers);…