Home » Facing $2M Budget Deficit, San Pablo Set to Host Community Meting

Facing $2M Budget Deficit, San Pablo Set to Host Community Meting

by CC News
San Pablo

SAN PABLO, Calif.— The City of San Pablo will host two virtual informational community meetings on the City’s budget. The first meeting will be held on Wednesday, May 20 at 6 p.m. in English. The second meeting will be held on Wednesday, May 27 at 6 p.m. in Spanish.

The sessions will provide residents with a general overview of the City’s budget, key community investments and challenges the City is facing, such as a projected structural deficit due to rising inflation costs and flattening casino revenues.

“We are committed to being transparent with our residents and making sure they’re well-informed of where the City stands financially and how we’re planning for the future,” said City Manager Matt Rodriguez. “These meetings are an opportunity to ask questions, hear from City leadership and understand the realities of our budget.”

During the meetings, City staff will provide an overview on how the general fund supports daily municipal services, including 911 response, street maintenance and community programs. Staff will also outline the financial pressures that are driving a projected $2 million annual structural deficit for the fiscal year 2026-27.

Among these challenges are four consecutive years of flattening revenues totaling approximately $3.35 million, from the San Pablo Lytton Casino, which accounts for nearly 60% of the City’s general fund. These revenue declines are combined with cost increases for general liability insurance, mandatory pension obligations and other operational expenses.

Following the presentation, residents will have a chance to submit questions for City staff through Zoom’s Q&A feature. The meeting will conclude at 7 p.m. To ensure your voice is heard, submit questions ahead of time to [email protected]

For meeting links and additional information on San Pablo’s budget process, visit www.SanPabloCA.gov/BudgetUpdate

Why is the City facing a structural deficit?

Currently, roughly 59% of the City’s general revenue comes from the San Pablo Lytton Casino. These casino revenues have flattened and leveled off in recent years, while the cost to provide basic municipal services continues to rise. For example, the cost of general liability insurance alone has approximately tripled since 2020. Additionally, our primary revenue source is facing a new competitive threat from a proposed casino development in Solano County, which is projected to negatively impact future revenue growth. Finally, the City has already implemented other revenue and savings options, including property sales, cannabis taxes and service cuts to community programs, meaning a new revenue source may be necessary to avoid further reductions.

What is the current financial state of the City of San Pablo?
The City’s recent financial forecasts initially projected a $2.1 million structural deficit for fiscal year 2026-27, and a $2.2 million deficit for fiscal year 2027-28. While the proposed two-year FY 2026-2028 operating budget is currently balanced, in part, through the use of one-time reserves, the City’s continued reliance upon one-time reserves to cover its operating expenses will reduce the City’s available fund balances and may further limit the City’s budget options over time.
What is the General Fund and what does it pay for?
The General Fund is the City’s primary operating fund and its largest fund. The General Fund pays for the day-to-day operations of the City, including the Police Department, Public Works (street maintenance, parks and facilities), Community Services (San Pablo Youth Scholarship Program, recreation and senior programs), Community Development and administrative services
What period does the City’s current budget cover?
The City of San Pablo operates on a two-year (biennial) budget cycle. The current budget covers Fiscal Year (FY) 2024-25 and FY 2025-26, running from July 1, 2024, through June 30, 2026
Why isn’t the City implementing a rent control program?
Independent evaluations estimate that implementing a comprehensive rent control program would cost the City approximately $1.2 million annually and require hiring five new full-time employees. To accommodate these unbudgeted costs, and without additional revenues, the City would be required to make offsetting reductions to other existing general fund programs and services, such as public safety, street maintenance and youth scholarship programs.
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