Fremont proposes $289.1 million operating budget for 2026–27; council asks for deferred‑maintenance list

Finance director David Pursland presented the proposed operating budget for fiscal year 2026–27, describing it as a plan that limits general‑fund expenditures to available ongoing resources while preserving the city’s budget uncertainty reserve. Pursland said the proposed general‑fund expenditures total $289.1 million and that expenditures outside the general fund total approximately $138 million. The forecast assumes modest revenue growth (sales, business and hotel taxes) but does not provide capacity to restore roughly $3.2 million in prior maintenance reductions adopted in the previous fiscal year.

The presentation included key assumptions: a 2% placeholder for labor negotiations, projected property‑tax growth of roughly 3–3.7% in the near term, and sensitivity to state adjustments of misallocated sales tax revenue. Staff explained the city’s use of a budget uncertainty reserve to smooth revenue shocks and said the reserve currently stands at about $4.3 million; the forecast projects the unreserved fund balance rising in later years but cautioned that much depends on economic assumptions and vacancy savings.

Council members and public speakers pressed staff on several items: the mechanics of the sales‑tax adjustments and prior overpayments, how and when the budget uncertainty reserve would be replenished, which positions and services were cut previously (staff identified pavement maintenance, routine tree trimming, park/median capital replacement and nine non‑sworn police positions among the actions taken), and the implications of the 2% placeholder for labor costs. Finance staff clarified that one percent in salary growth equals roughly $1.3 million in general‑fund costs and described the city’s historical reporting changes that affect year‑to‑year comparisons of spending categories.

Public commenters raised safety and service concerns tied to deferred maintenance (lighting and restroom upgrades in the Niles area) and urged consideration of staff raises and staffing restoration. Council asked staff to compile a prioritized list of unmet maintenance needs and other deferred investments so future decisions about new revenue sources or funding allocations can be informed by a clear list of city needs.

Next steps: staff will present the first public hearing on the proposed budget on June 2 and the second hearing and adoption vote are scheduled for June 9. Council directed staff to return with a prioritized list of deferred maintenance and additional data requested by council members prior to adoption.