Belmont adopts 2026-27 budget, plans to use reserves

“We did come up, through citywide department efforts, one-time savings of $0.3 million, mostly driven by delaying some vacant positions and recruitment, but there is still a gap of $.5 million, which then required us to draw on our general fund reserves to balance the budget,” Finance Director Grace Castaneda said during a recent City Council meeting.

The total budget is about $95 million, with most of that going toward the operating budget. Nearly $16 million is for the fire district and $12 million is for the capital improvement budget, which funds major infrastructure projects.

The deficit is part of a troubling long-term trend, especially due to the lack of a substantial revenue source tied to vehicle license fees, a complicated reimbursement that the state historically provides to Peninsula cities annually, however, most jurisdictions have failed to receive the full amounts over the last couple years. That has triggered a lawsuit between the county and state, and as a result, many cities are either lowering their projected VLF revenue or removing it from their budget estimates altogether.

The state has only partially reimbursed cities like Belmont in the recent past and, for the upcoming fiscal year, it’s likely it won’t receive any reimbursement, resulting in a $1.8 million revenue loss.

Many other Peninsula cities are facing shortfalls, not just due to the lack of VLF reimbursement but also higher operating costs. Belmont’s average general fund is projected to grow less than 2% annually, lower than the Bay Area Consumer Price Index, which averaged 3.6% over the past five years, according to a recent staff report.

“Even during the tough times, we’ve been able to really navigate those and still continue providing a great level of service to the community,” City Manager Afshin Oskoui said during the meeting.

The council voted to adopt the budget, with Councilmember Gina Latimerlo absent.