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Campbell introduces FY2027 budget; council sets June 16 adoption hearing amid debate over $2.79M reserve draw
Summary
City staff introduced a $74.1M FY2027 budget and a $75M CIP and recommended a one‑time $2.79M draw from general‑fund reserves to close the gap while Measure K funds remain tied up in litigation; residents and some council members urged more conservative reserve use and a plan for deferred maintenance.
The Campbell City Council received the city manager’s FY2027 budget and seven‑year capital improvement plan on June 2 and set a June 16 public hearing for adoption after substantive public comment and council debate about using reserves to close the budget gap.
City Manager (unnamed in the record) presented the proposed operating budget and CIP: total revenues and expenditures of $74.1 million and a capital improvement plan of approximately $75 million, including $4.22 million in new projects and $71 million of previously approved projects. Staff recommended using $2.79 million from general‑fund reserves as a one‑time measure to close the FY2027 gap, while preparing to rely on Measure K revenues if and when those funds become available.
"We are recommending $2.79 million to be used from general fund reserves to close the remaining budget gap," the city manager said, emphasizing the strategy is temporary and that more permanent structural fixes would be required if Measure K funds are not accessible.
Public commenters pressed the council for caution. Steve Saunders warned that relying on reserves to "paper over" the gap exposes the city if Measure K remains unavailable and urged planning for major deferred maintenance needs — noting a cited $42 million estimate for community‑center upgrades. "If we don't have a definite answer about Measure K by February 2027," Saunders said, "we're suddenly looking at the alternate scenario." He urged the council to avoid ongoing reserve draws beyond this stop‑gap year.
Council members debated options. Some urged capping the draw at $2 million and pursuing immediate cuts; others argued that the recommended reserve use preserves essential services and avoids layoffs while staff pursues measure resolution and labor negotiations. Several members stressed the action is a one‑time stopgap and that the council would make more substantial structural adjustments if Measure K funds are not resolved.
The council voted unanimously to set June 16 as the public hearing and adoption date for the FY2027 operating budget and CIP.
What happens next: staff will prepare final budget materials for the June 16 hearing and return with any requested adjustments; the council will continue monitoring Measure K litigation, labor negotiations and deferred‑maintenance priorities.
