City Council Approves Budget Rebalancing

The Fiscal Year 2025/26 Operating Budget was adopted by the City Council on June 10, 2025, as a balanced budget, with expenditures limited to fit within the projected ongoing resources. While the City was able to avoid the use of Budget Uncertainty Reserves, infrastructure maintenance expenditures were reduced by approximately $3 million to balance the budget. The City's FY 2025/26 Operating Budget initially did not include labor cost increases, as labor negotiations were not concluded at the time. However, since then, the City has entered into one-year agreements with all nine bargaining groups, which included a 1.3% cost of living adjustment and additional health benefit allowance. This required rebalancing the FY 2025/26 Operating Budget to cover these additional ongoing costs.

At the February 10 Council meeting, the Fremont City Council approved a budget rebalancing plan to accommodate labor agreements for FY 2025/26. The budget adjustment includes a $3.8 million increase in appropriations for personnel expenditures, with $3.1 million impacting the General Fund. To achieve a new balanced budget, City departments proposed budget reductions in the equivalent to their share of the increased labor costs, while prioritizing service delivery for City Council priorities. The departments with the largest recommended reductions are Police, Fire, and Maintenance Operations since they constitute a majority of the City's General Fund budgeted expenditures.

The reductions include cuts in staffing, overtime, training, and contract services. No personnel reductions were made to current sworn police or fire positions. However, the Police Department will eliminate six full-time administrative positions, two detention officers, and one detention supervisor. The recommended personnel reductions involve eliminating or reclassifying positions and no layoffs are anticipated.

The City Council's approval aims to ensure fiscal responsibility while maintaining essential services for the community. In March, the City will present the Fiscal Year 2025/26 mid-year budget report to the City Council. Subsequently, the new Fiscal Year 2026/27 Operating Budget will be presented to the City Council in May, with the adoption expected to take place in early June.