Title
Fiscal Year 2026/27 Proposed Budget Deliberation and Council Direction
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FileID
File ID: 2025-00779
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Location
Location: Citywide
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Recommendation
Recommendation: Deliberate and pass a Motion to provide Council direction regarding the Fiscal Year (FY) 2026/27 Proposed Budget (Budget).
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Contact
Contact: Peter Coletto, Director, (916) 808-5416, pcoletto@cityofsacramento.org; Mirthala Santizo, Budget Manager, (916) 808-5078, msantizo@cityofsacramento.org; Department of Finance
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Presenter
Presenter: Peter Coletto, Director, (916) 808-5416, pcoletto@cityofsacramento.org; Mirthala Santizo, Budget Manager, (916) 808-5078, msantizo@cityofsacramento.org; Department of Finance
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Attachments
Attachments:
1-Description/Analysis
2-FY2026/27 Supplemental Budget Information
3-Presentation (TBD) [Updated 05/11/2026 @ 4:30 PM]
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Description/Analysis
IssueDetail
Issue Detail: The City Charter, Article IX Section II, requires the City Manager to deliver budget recommendations no later than 60 days prior to the start of the new fiscal year. The Budget was released on April 29, 2026.
Over the course of four Council meetings in March 2026, departments conducted Early Budget Work Sessions (EBWS). The EBWS began with a presentation of the overall City budget context and fiscal challenge and different budget scenarios that City staff analyzed.
Departments provided budget-focused presentations focusing on the impacts of budget reduction decisions and alignment with Council priorities. On February 24, 2026, Council received the financial update for FY2025/26 and an updated 5-year forecast projecting a $66.2 million budget deficit for FY2026/27 with deficits increasing annually thereafter. The Budget is balanced and closes a $66.2 million funding gap.
On May 5, 2026, staff presented the Budget (including the FY2026/27 Capital Improvement Program [CIP] Budget) to Council (File No. 2026-00777). On May 12, 2026, Council received an analysis of the 2026-2031 CIP (File No. 2026-00778), City fees and charges (File No. 2026-00923), and the application of the Budget Equity Tool (File No. 2026-00943). With Council having received the information listed above from staff, Council shall now deliberate and provide direction to staff regarding the Budget.
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PolicyConsiderations
Policy Considerations: The Budget maintains the direction provided by Council and prioritizes maintaining core City services and advancing Council priorities while closing the budget gap in FY2026/27. The Budget includes continued resources for essential core services and Council’s top three priorities, as identified on September 30, 2025, related to Economic Development, Homelessness, and Public Safety. The strategic approach to include specific revenue enhancements and expenditure reductions instead of simply pursuing across-the-board cuts minimizes program and service impacts to the community to the extent possible.
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EconomicImpacts
Economic Impacts: Not applicable.
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EnvironmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): This report concerns administrative activities and government fiscal activities that do not constitute a “project” as defined by the CEQA Guidelines sections 15378 and California Public Resources Code section 21080 and are not subject to the provisions of CEQA (CEQA Guidelines section 15060(c)(3)). CEQA review for any project, which utilizes funds allocated under the FY2026/27 CIP Budget, has been or will be performed in conjunction with planning, design, and approval of each specific project as appropriate.
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Sustainability
Sustainability: None.
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Commission/Committee Action
Commission/Committee Action:
Budget and Audit Commission: The Budget and Audit Committee will review the Budget and any other budgetary changes from previous Council meetings on May 26, 2026.
Planning and Design Commission: Sacramento City Code Section 17.912.010 requires the Planning and Design Commission to review the City’s five-year CIP for consistency with the City’s General Plan and to report its findings to the City Council. The 2026-2031 Proposed CIP will be presented to the Commission on April 23, 2026. The General Plan Consistency Memo will be included in the Adopted Budget staff report.
Measure U Commission: The Budget and CIP will be presented to the Commission on May 18, 2026.
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RationaleforRecommendation
Rationale for Recommendation: The actions recommended in this report would allow staff to make modifications to the Budget and/or CIP.
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FinancialConsiderations
Financial Considerations: The Budget is balanced and reflects adopted Council policies, goals, and planning/programming guides. Any direction Council provides would need to ensure that the Budget remains balanced.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
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