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Hayward mayor outlines plan to close $32.6 million shortfall, seeks labor concessions and budget cuts
Summary
Mayor Mark Selenas said a midyear review expanded an expected $8.9 million shortfall to $26.4 million and that the city has closed a $31 million gap for the current year while facing a projected $32.6 million shortfall for fiscal year 2026-27; he described hiring a permanent city manager and finance director, executive pay cuts and efforts to negotiate labor concessions.
Mayor Mark Selenas said Hayward discovered larger-than-expected structural budget shortfalls and outlined immediate and multi-year steps the city will take to restore fiscal balance.
Selenas told attendees that a midyear revision presented in November 2025 showed an initial $8.9 million shortfall in the general fund expanded, after deeper analysis, to $26.4 million. He said the council eliminated a $31 million budget gap for the current fiscal year that ends June 30 and that the city faces a projected $32.6 million shortfall for the 2026-27 fiscal year.
The mayor attributed the shortfall to several factors: revenues that came in lower than projected, chronically underbudgeted overtime, use of one-time funds to expand staffing and programs, the city's interventions to preserve St. Rose Hospital and purchase a downtown movie-theater property, and prior across-the-board pay increases approved in 2024.
"The city spent more than it received," Selenas said, laying out both causes and responsibility.
To address the gap, Selenas described a suite of actions already under way: the council has hired a permanent, experienced city manager and finance director; the executive team accepted a 4% compensation reduction; council members reduced their own salaries; departments have been asked to cut at least 5% focusing on core services; temporary positions are being reduced; overtime controls are being tightened; and staff are pursuing roughly $6.7 million (about 3.5%) in personnel savings in partnership with labor.
He said the city will increase transfers of Measure C funds into the general fund to pay for existing Measure C operations and is advancing stronger fiscal policies and internal controls through the council's budget and finance committee.
Selenas emphasized transparency and accountability, saying the city will continue monthly monitoring and that balancing the budget will likely take a year or two.
Next steps: the council and executive team will continue labor negotiations, implement the departmental realignments and report back through the council's budget and finance committee.
