Vacaville officials outline possible 1-cent sales tax to address structural budget shortfall

City of Vacaville officials on a public forum described a structural budget shortfall and said they are studying whether a local 1¢ sales tax on the November 2026 ballot could preserve public safety, road maintenance and other services.

Savita Chaudhry, the city manager, said the city’s total budget is about $295 million and the general fund accounts for roughly 53% of that. ‘‘With Measure M in place, ongoing expenses still outpace revenue,’’ she said, adding that the city used one-time proceeds of roughly $7 million from the Genentech sale to Lonza last year and that without new revenue the general-fund reserve could fall below policy minimums later this decade.

Assistant City Manager Doreen Meggersmith summarized Measure M’s role and accounting. She said Measure M generated about $26.2 million last fiscal year, funded 28 positions (including six firefighters and 13 police staff) at an annual cost of roughly $7.2 million, and that independent audits and a transparency portal document those expenditures.

City staff presented forecast scenarios showing that with the department-level cost savings already implemented (about $9.2 million in reductions, of which ~$8 million affected the general fund) reserves would be near policy minima within a year and could be exhausted by about 2029 without additional revenue. Staff said the shortfall range discussed was roughly $9 million (with cost savings) to $13 million (without those savings).

Officials outlined the mechanics and scope of a local sales tax. Chaudhry and Meggersmith said a local 1¢ sales tax would not apply to groceries or prescriptions and that roughly 22% of Vacaville’s taxable sales come from nonresidents who shop in the city (for example, at the Nut Tree outlets). Staff estimated a 1¢ measure would start with about $28 million in annual revenue before escalators; staff said a half-cent would roughly fill the immediate deficit while a full 1¢ would generate additional funds for infrastructure, fleet and pension liabilities, and community programs, subject to council direction and community priorities.

Officials said the city would keep local control over the funds, conduct independent annual audits, and create a citizen oversight committee if voters approve a measure. They described next steps as more community outreach (surveys and district meetings), council discussion in late May or early June on whether to place a measure on the November ballot, and continued public reporting via a new ‘‘Choosing a Path’’ web portal.

The forum included technical questions from residents about how development impact fees work, the city’s capital plan timing and whether new development imposes additional long-term service costs. City staff said developers pay one-time development impact fees intended to fund upfront infrastructure (roads, sewer, water) and that the city performs financial-impact and municipal-services reviews to assess whether new projects will be fiscally positive or require additional public services.

No formal decision was made at the meeting; staff said no final design (rate, duration or spending categories) had been adopted and the council would decide whether to put any measure on the ballot.