Martinez staff warns of a $1.4 million structural gap for FY26-27; council asks for detailed cuts and revenue options

City staff gave a preliminary look at Martinez's FY26-27 general fund on April 15, projecting roughly $38 million in revenues and $39.4 million in expenditures and identifying a $1.4 million structural deficit.

Mike (S15), presenting the outlook, said the largest revenue driver is property tax, which staff's consultant projects at a modest 1.89% increase next year. Finance Director June Du (S17) highlighted near-term hits including Prop 8 assessment adjustments (about $117,000) and softer sales tax, while staff cited rising pension, health insurance and utility costs on the expenditure side.

"We're looking at about $38,000,000 in revenues projected to come in and an expense rate projected for next year's budget of $39,400,000 resulting in that structural deficit of $1,400,000," Mike said.

Staff presented reserve balances and stressed that although Martinez currently meets the city's reserve policy threshold, next-year pressures and a complicated marina subsidy picture mean staff will return with refined numbers on May 6 and a workshop on May 20. Council members asked for a clear, tabular breakdown of potential cuts and a full list of maintenance agreements, leases and under-recovered services to evaluate where savings may be found. The police chief (S19) flagged potential decision points such as the downtown security guard and crossing guard funding as items that could be examined.

Staff will bring a detailed departmental drill and options for reducing the gap to the May 20 budget workshop; no budget decisions were made at this meeting.