Hayward’s Leaders Just “Balanced” the Budget by Draining Reserves and Cutting the City You Actually Live In

Hayward Mayor Mark Salinas and the City Council want you to believe they are steering the city through tough times with steady hands. What they actually did in November was far simpler and far uglier: they watched a budget hole explode, then tried to patch it with one-time gimmicks, raid-like transfers, and a set of service cuts that will land squarely on ordinary residents.

This was not a routine budget update. It was a midyear reset that effectively rewrote the FY 2025–26 baseline, and it should be the top watchdog item for anyone who cares about staffing, public safety response times, library access, basic neighborhood cleanliness, and the fiscal integrity of the city’s future.

Because the official record is damning even before you get to the spin.

What the Council was told: The deficit tripled, and the reserves are basically gone

The staff report to the City Council dated November 18, 2025 lays out the reality that city leaders would prefer you not dwell on.

The FY 2025–26 budget deficit was not a manageable gap. It was updated to a projected $26.45 million shortfall.

That is not a rounding error. That is a structural problem, and it is the predictable consequence of a city government that keeps promising more than it can pay for.

Staff’s tables show how fast the story changed.

In the updated projection, revenues and transfers-in barely moved compared to what the Council adopted. The real damage is on the spending side.

Salary and benefits alone jumped by more than $13.55 million compared to the adopted budget projection. Supplies and services rose by about $2.38 million. Transfers out rose by over $1.15 million. The city’s expenditures and transfers-out rose a total of $17.63 million versus what was adopted.

The outcome was predictable: the deficit ballooned from $8.96 million in the adopted budget to $26.45 million in the updated projection.

Then came the line that should make every taxpayer stop and reread.

Staff told the Council the city started FY 2024–25 with a reserve of $31.8 million and that balance has been reduced to nearly zero. They said the FY 2025–26 starting fund balance was reduced from an original estimate of $31 million to approximately $1 million.

So when residents hear the Mayor and Council talk about “balancing” the budget, they should understand what that means in practice. Hayward is not balancing. Hayward is burning through its cushion.

And the people who will pay for it are not the elected officials. It will be residents trying to get a pothole fixed, a business trying to get an inspection, or a family that just wants a functioning library schedule.

How they propose to “fix” a $26.45 million hole: raid, borrow, delay, and cut

Staff proposed a package of changes that adds up to about $19.7 million in identified actions, leaving a remaining gap of $6.75 million that would come from “personnel-related savings.”

Here is the core of their plan:

• $9.75 million from a transfer and loan of funds from Measure C.
• $1.9 million in one-time transfers in or reductions of transfers out.
• $1.5 million in anticipated one-time revenue and recovery.
• $250,000 from raising the Transient Occupancy Tax (TOT) from 12% to the voter-allowed maximum of 14% for the remainder of FY 2025–26.
• $2.9 million from additional vacancies and overtime reductions.
• $2.4 million from reductions in services and supplies.
• $1.0 million from ending assignments for temporary employees.

And the remaining gap, roughly $6.75 million, was flagged as coming from labor group discussions, voluntary separations, and layoffs as needed.

Read that again: they are openly telling you the budget will be “balanced” by shrinking the workforce and shrinking services.

And even their most important patch is not real money in the sense taxpayers think of money. It is internal borrowing.

Staff proposed loaning an additional $3.85 million from Measure C to the General Fund at zero percent interest, to be paid back over 15 years starting in 2030.

This is the kind of move politicians love because it avoids hard decisions today while handing the bill to tomorrow.

Hayward’s leaders are asking residents to accept degraded city services now and accept delayed fiscal pain later.

The cuts are not theoretical. They’re aimed at the city’s everyday functions

Staff did not hide the consequences. They spelled them out.

Maintenance capacity would be reduced for blight, encampment abatements, graffiti, and illegal dumping removal. In other words, the quality-of-life basics that shape whether a neighborhood feels safe and livable.

The City Manager’s Office would reduce customer service staff, possibly reducing counter service hours. Residents who already feel City Hall is inaccessible will now have fewer points of access.

The Library could reduce operations from six days to five days. The people most dependent on library services are not the city’s well-connected insiders. It is families, seniors, students, and residents without reliable internet access.

Development Services and Fire Prevention would have slower response times for inspections and permit processing. That means homeowners and small businesses will wait longer and pay longer.

Police services could see slower response times for calls and investigations, plus reductions in traffic patrol, gang monitoring, intelligence gathering, and Animal Shelter services.

That is not “right-sizing.” That is the city admitting it cannot maintain the service level it promises.

And then there is the staffing squeeze.

Staff said temporary positions would be eliminated, overtime controls increased, vacancy controls continued, and layoffs implemented if needed.

So the Council’s response to a budget crisis is to break the public-facing parts of government first.

The accountability tell: “Trust us, we’ll implement it by January 31”

Staff wanted the Council to affirm that the cost-control measures were within the City Manager’s authority and expected to be implemented by January 31, 2026, to eliminate the deficit.

That phrase should ring alarm bells for anyone who watches government closely.

When elected officials bless a sweeping set of cuts and transfers while pushing the details into “administrative authority,” they are setting themselves up to dodge responsibility later.

If the cuts go badly, the Mayor and Council can claim staff did it. If the savings do not materialize, they can blame labor negotiations or “unexpected” conditions.

Meanwhile, residents are left to absorb the consequences.

What voters should watch next

This is the part Hayward’s leaders hope you will not do: follow up.

Here are the deadlines and metrics that the city itself put in writing:

• January 31, 2026: the promised implementation deadline for cost-control measures.
• December 2025: staff planned to bring the TOT increase item to the Council.
• February 2026: staff planned to update the Council on actions taken and savings achieved, and hold a fiscal sustainability work session.
• Quarterly: closed-session updates on property disposition activities.
• Biweekly monitoring: staff indicated ongoing monitoring to track targeted savings after budget updates were entered.

If you want a real watchdog test, it is simple. Did they hit the January deadline. Did they actually achieve the savings. And which services were cut first.

Because the truth is, the deficit did not happen overnight. And it will not be solved by maxing out a hotel tax and “loaning” money from other pots while gutting the services residents notice most.

The political bottom line

Mayor Salinas and the City Council presided over a budget process where the city went from an adopted deficit of about $9 million to an updated deficit of about $26.45 million. They allowed reserves to be effectively wiped out, then presented a “balanced” fix that depends on internal transfers, a long-term loan starting repayment years from now, and the steady erosion of public services.

That is not leadership. That is postponement dressed up as management.

And when the next revenue pitch comes around, residents should remember this moment. When the city tells you it needs more money, ask why it could not protect basic services with the money it already had. When it claims “fiscal responsibility,” ask why the reserve went from tens of millions to nearly nothing.

Then show up.

Because the only real accountability metric that moves politicians is not a staff table. It is a room full of residents at public comment, and a city government that knows someone is actually paying attention.