City staff: Hiring freeze, prepayments lift Bakersfield reserves to about $60 million
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Summary
At the March 25, 2026 Bakersfield City Council meeting, city staff reported larger-than-expected savings from a hiring freeze and ongoing CalPERS prepayments, raising projected midyear savings to roughly $11–11.7 million and reporting $60 million in contingency reserves; the council voted to receive and file the report.
Mr. Clegg, a city staff presenter, told the Bakersfield City Council on March 25 that midyear budget work shows the city is on track to exceed earlier savings estimates and is entering the 2026–27 budget process with larger reserves. "We're fortunate, again," Mr. Clegg said, "our savings target is looking to be closer to $11,000,000 instead of just the $8,700,000 we estimated in the first quarter." The presentation was delivered after a closed session and the council reconvened at 4:07 p.m.
Why it matters: the report frames how staff plans to balance next year’s budget. Mr. Clegg said the city’s contingency reserve stands at $60,000,000 against a $65,000,000 target, and staff is not recommending tapping those reserves to balance the coming year. He distinguished contingency reserves from the fund balance and noted facility reserves are about $5,000,000 (target $10,000,000).
What staff reported: citywide personnel measures—chiefly a hiring freeze put in place last June—have driven savings and altered multi-year forecasts. Mr. Clegg said 293 positions were vacant over the past two quarters; enterprise funds largely backfilled necessary roles, while the general fund shows more than 200 vacancies. Since October, staff filled 51 positions, 36 positions are approved to fill but not yet filled, and about 140 positions remain held, of which approximately 70 are frozen and 70 are recommended for elimination in next year’s budget.
On pensions and long-term risk: Mr. Clegg confirmed the pension stabilization vehicle is a Section 115 trust and said the city has been building that fund (he gave the current balance in response to council questions). He said CalPERS cost pressures are expected to peak around 2030–2031 and staff intends to preserve the stabilization fund to smooth those future increases rather than spending it now. "Let's not spend it too soon," he said, adding staff prefers some cushion in case peak years shift.
Other fiscal details: Mr. Clegg estimated modest one-time closeout adjustments could generate about $1,000,000 (plus or minus), but recommended rolling those monies into next year’s budget rather than midyear appropriations. He also said interest income on reserve and ARPA funds has been "in the millions," noting an earlier comparable period where ARPA interest was about $2,000,000; interest is pooled across categories and may not be reported separately in routine slides.
Council questions and next steps: Council member Gonzales thanked staff for the slide showing reserve balances, asked about premeasure balances and interest earnings, and pressed on the pension trust mechanics; Mr. Clegg confirmed the Section 115 status and explained that CalPERS prepayments have yielded roughly $1,000,000 in annual savings that are being added to the pension stabilization fund. Council member Smith asked how staff plans to time use of the stabilization fund; Mr. Clegg said there is no fixed timetable and that the intent is conservation and flexibility. The council moved to receive and file the midyear report; the motion carried with Council member Arias absent.
The immediate procedural follow-up is budget workshops in May and a planned presentation in early April to the Public Safety Oversight Committee on PSVS-related requests. The council took no other formal action on allocations at the March 25 meeting.
