Vallejo budget goes back to the drawing board for cuts to all departments

VALLEJO - Vallejo city staff must bring back a more conservative budget for the coming year with at least $1 million in new cuts after the Vallejo City Council balked at passing a $314.6 million budget on Tuesday.  

In a meeting which stretched past midnight, the council voted unanimously for city staff to draft a new 2025-26 budget showing different ways to make cuts over the next five years. City staff brought a proposal they said was balanced – months after facing a looming deficit – in part by relying upon a 25% vacancy rate, which several councilmembers criticized. 

After hours of discussion, Mayor Andrea Sorce asked City Manager Andrew Murray and Finance Director Rekha Nayar to return with a budget that freezes non-essential positions with an additional $1 million in cuts and several five-year projections accounting for potential losses of federal funds.

Councilmember Tonia Lediju said she was not comfortable pinning the budget on leaving many positions unfilled following a discussion of why the city’s vacancy rate has remained high amid weak recruiting efforts. 

“We are not the only city that's having to cut positions,” Lediju said. “I really want us to think about how we’re handling our public dollars, where those dollars are going and where we are positioned financially.”

Murray and Nayar said in their report to council Tuesday they had successfully balanced the budget for the coming year with an estimated $151.3 million general fund, if Measure P sales taxes generate $18.75 million.

However, Sorce said the budget can’t truly be balanced if the city is dipping into its reserves and heavily relying on Measure P to cover many necessities such as road repairs. 

Sorce said the five-year forecast presented was more worrying as it reflected a potential $6.9 million spending gap within the next year. Nayar’s projection showed the city “going negative” by 2028, requiring a structurally balanced long-term plan.

“We’re going to have to figure out how to make ourselves more lean and make ourselves do more with less,” Sorce said.

The budget proposal presented Tuesday night showed that Vallejo faces the same challenges as many California cities, such as shrinking home sales and property tax revenue amid rising inflation. Sales and use tax revenue declined 1.7% and cannabis tax revenue was flat. However, Nayar noted that the business license tax grew by $250,000 or 14.1% and the transient occupancy tax revenue grew by $129,000, an 8.1% increase.

Nayar and Murray proposed cutting about $2.9 million from overall city services, a 20% reduction, to balance this draft budget. 

This budget’s expenditures spent the most on the Vallejo Police Department at $58.02 million or 39% of the general fund. The proposal kept the general fund at 7.7% higher than last year’s, primarily due to rising salaries and benefits and a $6.54 million increase from Measure P funding.

The Measure P Oversight Committee recommended spending $10.56 million this year, including $9.6 million on crime prevention, $1.5 million to the IHART mobile response program and $1 million for roadway paving efforts. 

Lediju said that she would not vote on the proposal, saying “It is not a balanced budget.” She asked the city manager’s team to create a data-driven plan identifying how to provide essential services without using Measure P funds “inappropriately.” 

When Councilmember Helen-Marie Gordon protested making cuts after hearing the city operates with many vacant positions, Lediju said such cuts are necessary and demonstrate the need for data to determine how to keep essential staff with less funds.

“The reality is, as we look at federal dollars and state and local dollars, we’re all being stretched, no matter where you work in the nation,” Lediju said. “We’re all being forced to make some really hard choices about how we're going to operate our government. It doesn’t feel good, but it is our reality now until some things change at the national level in particular.”

Councilmember Alexander Matias said the city “has a history of doing the opposite of what everyone else is doing” by refusing to make cuts - calling the proposal “a keep the lights on budget.” 

Matias suggested investing in areas that generate more revenue, like beautification projects and the marina, rather than spending more money on public safety. He asked for a model where everything but essential services are eliminated, and for staff to identify an additional $1 million in cuts.

“You see every other city cutting their budget,” Matias said. “It’s like the same episode playing here every single year. Folks, the math ain’t mathin’.”

Several residents, like Maylene Garcia, echoed Lediju’s concern that the budget proposal was balanced using unfilled positions. Garcia said the city has the digital tools to better share vacancies to improve recruiting efforts and be more transparent.

Vallejo Housing Justice Coalition director Cristal Gallegos said Vallejo needs a better system to help inform and engage people about the budgeting process, claiming that residents have been “shut out” up to this point.

“Critical financial decisions are made with minimal community involvement,” Gallegos said. “When public input is treated as a formality instead of a mandate, it erodes the trust in the institution and really weakens the health of our whole city.”