Budget and Audit Committee (Special Meeting) 9/16/2025

The City of Sacramento Budget and Audit Committee’s special meeting on September 16, 2025, focused on the FY2027 budget process and options for addressing projected deficits. Staff reported that the FY2026 budget is balanced, but the five-year forecast shows deficits beginning in FY2027; it excludes potential state homelessness funding, future labor-contract costs, and possible federal funding losses. Departments, including charter and appointed offices, will be asked to develop balancing strategies equal to 15% of their net General Fund dependence. The committee supported advancing Option 2—a maximum deficit threshold for the second budget year—for further consideration, with 2% discussed as an example rather than a finalized threshold. Members also discussed presenting ongoing-cut scenarios and allowing budget proposals in writing where possible, without imposing a strict deadline that would prevent later public deliberation. A unanimous motion directed staff to include the ability to support a true two-year budget in the evaluation of a future financial-management system; staff said the current system is antiquated and lacks that capability.

Staff also reviewed progress on recommendations from the 2020 Citywide Innovation and Efficiency Study. One recommendation requiring further policy direction was issuing an RFP to contract out solid-waste and recycling services; the committee did not direct staff to proceed. Members discussed, but did not approve, pursuing legislation for a SMUD franchise-fee-style payment to the city, and a charter amendment concerning binding arbitration for police and fire. Public comment urged stronger monitoring of police overtime and supported the study’s related recommendations. No contract award, vendor selection, or purchasing approval was identified.