The city of Fresno is facing a $23.3 million budget deficit that has city departments preparing for cuts.
“It’s going to be another tight year — there’s no question,” Mayor Jerry Dyer said in a Feb. 9 interview. “We’re going to see sales tax is ticking up, property tax continually growing, but what we’re going to see is that our expenditures are again exceeding our revenues.”
During a Thursday mid-year budget presentation to the Fresno City Council, city budget officials said they estimate a deficit of $23.3 million, a number they expect to grow before the start of fiscal year 2027 on July 1.
Departments city-wide have been asked to cut their budgets by 5%. Similar to last fiscal year, departments will also maintain a 6.18% attrition rate, meaning each department will have to leave a certain number of positions vacant if an employee resigns, retires or leaves for any other reason.
“I honestly think we’re going to have to increase our attrition rates in order to make the budget balance,” Dyer said Thursday.
The city’s current $2.3 billion budget for fiscal 2026, the largest in its history, was affected by similar challenges, especially as pandemic-era American Rescue Plan funding has run out.
“We’re seeing the same trend that we’ve been seeing the last several years,” Councilmember Nelson Esparza said.
‘Magic tricks’ to help Fresno’s budget?
Esparza asked if the city had any “magic tricks” to help alleviate pressures on the budget.
Dyer said the city was looking at different ways to increase revenues to the city, such as the transient occupancy tax on Airbnb short-term rentals that has increased annual revenue by about $1 million.
Meanwhile, the city is preparing to raise water and sewer rates for the first time in a decade. Dyer told The Bee the proposed increases would come before the council sometime in 2026.
Earlier this month, the City Council approved dozens of new and increased fees for services at Fresno Yosemite International Airport, the Fresno Animal Shelter, and the Department of Public Utilities, among other departments.
These fee increases, which go into effect on July 1, were necessary to keep up with rising labor costs, City Manager Georgeanne White said.
“We will continue to be as creative as we possibly can,” Dyer said.
Fire Department requests additional overtime funds
In a 5-0 vote Thursday, the Fresno City Council also approved an amendment to the current budget to provide an additional $1.96 million to the Fresno Fire Department for costs associated with overtime and the Fresno Fire Department Drill School.
Dyer said the need for more overtime in the Fire Department was driven by an “unanticipated” vacancy rate in the department due to retirements this year.
“There was a mass hiring that was done at one point. That means you’re seeing mass retirements,” he said.
Currently, there are 50 vacancies in the fire department, White said.
City staff said the current budget for the fire department’s overtime is $8.4 million, but in recent years, the actuals have been closer to $9 to $11 million dollars.
While it is sometimes more economical for city to pay overtime instead of filling the positions, that isn’t the case in the first department, White said.
“We have so many vacancies that we have people at the higher ends of the pay scale that are back-filling, being paid overtime for an entry-level firefighter job,” she said.
The city expects 15 participants to graduate from the current drill school class.
“We have to begin another drill school immediately, because our attrition is far outpacing our ability to hire,” White said.
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Melissa Montalvo is The Fresno Bee’s accountability reporter. Prior to this role, she covered Latino communities for The Fresno Bee as the part of the Central Valley News Collaborative. She also reported on labor, economy and poverty through newsroom partnerships between The Fresno Bee, Fresnoland and CalMatters as a Report for America Corps member.