Title
Update on Application of Budget Equity Tool (BET) on the Community Development Department (CDD) and the Finance Department Budget Reductions
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FileID
File ID: 2026-00943
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Location
Location: Citywide
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Recommendation
Recommendation: Review, comment, and provide direction.
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Contact
Contact: Aimée Zenzele Barnes, Diversity & Equity Manager (916) 808-1174, abarnes@cityofsacramento.org, Department of Human Resources
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Presenter
Presenter: Aimée Zenzele Barnes, Diversity & Equity Manager (916) 808-1174, abarnes@cityofsacramento.org, Department of Human Resources
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Attachments
Attachments:
1-Description/Analysis
2-Budget Equity Tool (BET) and Instructions
3-BET Council Presentation 5.12.26
4-GFOA-Cutting the Operating Budget Resource-April 2021
5-BERG T Council Presentation 5.14.24
6-CDD Budget Equity Tool Submission
7-Finance Budget Equity Tool Submission
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Description/Analysis
IssueDetail
Issue Detail: The Human Resources Office of Diversity & Equity (ODE) staff will provide an update on the continued refinement and expanded application of the Budget Equity Tool (BET) [renamed from the Budget Equity Resource Guide and Tool (BERG/T)]. The BET was adapted from the April 2021 Cutting the Operating Budget and Instituting An Equitable Decision-Marking Report (Attachment 4). It provides a standardized approach to understand the local and geographic impacts of potential budget cuts, specifically using data to identify unintentional adverse impacts on underserved groups or neighborhoods.
BET from August 2024 to present and implementation of the BET for Fiscal Year (FY) 2026/27:
The BET was applied to parts of the Office of Innovation & Economic Development (OIED), Convention & Cultural Services (CCS), and the Fire Department (FD) and was presented at the Racial Equity Committee on April 30, 2024, and City Council on May 14, 2024 (Attachment 5).
The City of Sacramento has taken intentional steps to continue to build capacity and embed equity into its budget process as part of the budget development process through the continued implementation of the BET. This effort began almost immediately after adoption of the FY2024/25 budget on August 6, 2024, when ODE, the City Manager’s Office (CMO) (Assistant City Manager, Leyne Milstein), and the Finance Department’s Budget Office convened to strategize integration of the BET in the budget cycle.
By September 11, 2024, the team refined the BET to be compatible with the City’s budget software (Hyperion). Integration of the BET into the automated process is an important step in the intentional efforts to normalize this type of analysis within the budget development process. On October 31, 2024, ODE and Finance reviewed the functionality and reporting capabilities to ensure the departments applying the BET would have functional access.
The FY2025/26 budget kick-off took place on November 6, 2024, followed by the creation of a shared workspace (Teams) to centralize BET submissions. Additionally, the HR Department hosted a workshop on November 13, 2024, to strengthen workforce equity considerations.
On December 11, 2024, the Diversity & Equity Manager engaged in a diversity, equity, and inclusion exercise with the Police Department (Sac PD), broadening the tool’s application. As the new year began, consultations with the Department of Utilities (DOU) on January 2 and 6, 2025, explored the application of the BET on the proposed Sacramento Utilities Rate Advisory Commission Program Reduction. By January 17, 2025, the following number of BET submissions were received: Sac PD (44), Sac FD (14), DOU (1), CMO (10), and CCS (1). ODE initiated the review and department consultation process on February 7, 2025.
For FY2026/27 Citywide budget development kick-off took place on October 7, 2025.
To effectively guide and broaden the tool’s application, the ODE Team consulted with City staff from:
• Administrative Services in Community Development Department (CDD) on December 12, 2025.
• Animal Care Services in CDD on December 22, 2025.
• Finance Department on December 17, 2025.
In January 2026, Administrative Services in CDD provided ODE further review and feedback on draft BET submissions for:
• Spay/Neuter Clinic augmentation
• Code Technology Fee reduction
• Rental Housing Inspection Program (RHIP) augmentation
• Residential Development Impact Fees for Affordable Dwelling Units Program (Zero Impact) reduction
• Planning Division Fee Adjustment reduction
By late April the following number of BET submissions were received: CDD (4) Finance (1), SacFD (7), and SacPD (39).
Overview of 5-Year Plan to Implement an Equity Lens Citywide
At the April 30, 2024, Racial Equity Committee meeting, City staff were directed to develop a workplan on embedding an equity lens into the budget over the next three to five years. This phased approach to implementing the BET involves simultaneous actions to update the BET, gradually introduce the BET across departments, and provide capacity building and training. By doing so, the City can continue to work to understand the equitable distribution of resources without overextending its budget during challenging fiscal periods and understanding and implementing realistic timelines for staff to implement change.
The phased implementation has prioritized departments based on factors such as their readiness, potential impact on equity outcomes, and the availability of resources for training and capacity building. This approach ensures that the integration and adaptation of the BET is both effective and sustainable.
Key Considerations for Implementation:
1. Phased Rollout by Department: Given the $66.2 million funding gap addressed in the FY2026/27 Proposed Budget, a gradual department by department integration of the BET continues to ensure equity-focused budget allocation while maintaining financial stability and sustained effort by City staff to implement changes.
2. Capacity Building and Training: Departments require structured training on applying the BET to ensure alignment with equity principles. Capacity building ensures City staff understand historical disparities, use data-driven decision-making, and engage impacted or underserved communities meaningfully.
3. Long-Term Challenges: Aside from the future year deficits, the City faces $3.5 billion in unfunded capital needs and pension liabilities. This cost does not include the impact if there was a recession. Any budget equity implementation must be resilient enough to withstand these financial pressures while addressing the needs of historically vulnerable communities.
Proposed Strategy:
• Year 1-2: Pilot and refine the BET in selected departments with high-impact equity initiatives.
• Year 3-4: Expand implementation, integrating feedback and addressing training gaps
• Year 5: Further refine the BET. Full adoption across departments, ensuring that equity-driven budgeting is fully embedded in decision-making processes.
This plan positions the City to be proactive in identifying future cost measures and/or partnership opportunities to address community needs in planning for future budget cycles.
The BET provides guidance on how the City can apply an equity lens to budget reductions and revenue opportunities, while understanding the impact to vulnerable communities.
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PolicyConsiderations
Policy Considerations: This report is consistent with the Racial Equity Committee’s direction to keep informed on the application of an equity lens on the City budget over the next three to five years.
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EconomicImpacts
Economic Impacts: Not applicable.
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EnvironmentalConsiderations
Environmental Considerations: Not applicable.
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: Implementation of the BET is consistent with the Racial Equity Committee’s direction.
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RationaleforRecommendation
Rationale for Recommendation: Not applicable.
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FinancialConsiderations
Financial Considerations: The BET is being used to inform closing the $66.2 million budget gap and help balance the FY2026/27 Proposed Budget.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): No goods or services are being purchased under this report.
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