Council Adopts $249M Budget, Advances Downtown Loop Overhaul, Places Tax Measure on Ballot

Hayward's City Council tackled its fiscal future head-on Tuesday night, unanimously adopting a $249 million general fund budget balanced through labor concessions and one-time fixes, while placing a business license tax modernization measure on the November ballot that could close nearly half of a persistent $30 million structural deficit. The council also gave a green light to reshape the downtown Loop from a collision-prone one-way system into a two-way street network designed for safer, slower travel.

• $249M general fund budget adopted 7-0, balanced by 85 frozen vacancies, deferred union COLAs, and one-time OPEB transfers — but a $30M structural deficit remains

• Business license tax overhaul headed to November ballot, projected to generate ~$16M annually in the city's first rate update since 1978

• Downtown Loop conversion advances as council unanimously backs the Civic Avenue plan for two-way streets, bike lanes, and a potential pedestrian plaza

• Safe Streets Phase 1 corridor alternatives approved for A Street, B Street, and Tennyson Road

• Fire engine shutdown in District 1 draws council scrutiny as Regis Village call volumes strain overtime budgets

A Budget Balanced on Borrowed Time

The basics: The FY 2026-27 operating budget covers a $249 million general fund and approximately $504 million citywide including $264 million in capital improvements. Finance Director Hilbrants and her team effectively built two budgets in six months after discovering significant discrepancies in the current fiscal year — salary and benefits were running $10 million higher than projected due to previously unbudgeted special assignment pays, vacation payouts, and CalPERS miscalculations.

Why it matters: The budget is balanced on paper, but the tools that got it there — one-time transfers from OPEB and Workers' Comp fund balances, 85 frozen vacant positions replacing what Hilbrants called an opaque "salary savings" credit, and labor partner concessions including deferred COLAs and overtime reductions from SEIU and public safety unions — are not permanent fixes. A $30 million structural deficit persists.

"We effectively balanced two budgets in six months," said Finance Director Hilbrants. "There's still a structural deficit of about $30 million. We do need to look at new revenue opportunities."

Where things stand: Councilmember Julie Roche pressed extensively on whether past failures — unbudgeted overtime, overinflated sales tax projections, unbudgeted pilot programs — have been structurally corrected. "It was the unbudgeted overtime that was the big mistake," she said, drawing a distinction between necessary overtime spending and the failure to plan for it. Hilbrants confirmed that line items now exist for special pays, overtime is tracked monthly at the Budget and Finance Committee, and departments manage to fixed vacancy counts.

The Police Chief explained that the department's hiring pipeline — six months for applications, six months of academy, one year of field training — means no actual staff reductions occurred, only frozen vacancies. The Fire Chief disclosed that one engine in District 1 was shut down to save on overtime, leading to longer response times in an area with high call volume driven by the Regis Village supportive housing site.

Councilmember Angela Andrews flagged the overtime-response time tension directly: "I'm really concerned about us really looking at overtime as a concern when we're having the services in our community that may require public safety services and overtime, and we do need to budget effectively for it."

The other side: Two members of Hayward Concerned Citizens spoke during public comment. Suzanne Luther criticized the use of remaining Measure C funds to balance the budget, arguing voters approved the money for specific purposes. TJ questioned consultant spending, the Loop project given budget constraints, and reduced public safety response times, urging the city to live within its means.

Mayor Mark Salinas responded sharply, defending Measure C's record and reading from the original ballot language. "We went from a PCI from 68 to 78. There's only two other cities in Alameda County that has better roads than us — Danville and Emeryville," he said, also citing crime reductions, a new library, and a new fire training center.

Councilmember Ray Bonilla Jr. praised the transparency improvements that caught the $10 million payroll surprise before it snowballed: "I think more excited about and appreciative of is how quickly we were able to catch that and then go and re-budget to make sure that this wasn't going to end up in a bigger issue later down the road."

Decisions: The budget passed 7-0 (For: Andrews, Bonilla, Goldstein, Roche, Syrop, Zermeño, Salinas; Against: none; Absent: none). The budget does not include potential revenue from the business license tax measure, which depends on voter approval in November.

What's next: The Budget and Finance Committee will continue monthly oversight of overtime and vacancy management. The structural deficit makes the November ballot measure a pivotal vote for the city's long-term fiscal health.

Reshaping the Loop: Council Backs Two-Way Streets Downtown

The basics: The downtown Loop — a one-way street system created in 2013 when the Route 238 bypass was abandoned — has produced a collision every 11 days and killed two people already this year. Staff analyzed two options for redesigning it: the Downtown Grid, which would remove a segment of Foothill Boulevard and recreate a traditional street grid, and the Civic Avenue option, which keeps Foothill continuous with two lanes in each direction while converting Mission Boulevard and A Street to two-way traffic with bike lanes.

Why it matters: Traffic analysis showed both options increase congestion compared to the status quo, but the Downtown Grid increases it three to four times more than Civic Avenue at some intersections. A community survey of 350 respondents showed 58% preferred Civic Avenue. Staff recommended advancing it along with converting B Street to two-way while studying a pedestrian plaza, and converting C Street to two-way with a cycle track.

Where things stand: All seven council members supported staff's recommendation, though each brought different concerns to the table.

Mayor Pro Tem George Syrop made the case for lane reductions through the lens of induced demand — the transportation planning concept that reducing road capacity eventually reduces traffic volume. "I don't want to misguide the public and create any illusions that when we reduce some of these lanes, traffic's gonna be tough for a while," he said. "But over time, more people will stay on the freeway than will use Hayward as a thoroughfare." He supported a pilot approach for any pedestrian plaza, citing unanswered questions about maintenance, deliveries, and public safety.

Mayor Salinas was blunter about cut-through traffic: "I really don't care about the people who go from San Mateo to Livermore through our city."

Councilmember Dan Goldstein raised concerns about navigation apps like Waze pushing diverted traffic onto residential streets. "Invariably, what I hear from our residents is how much they resent this drive-through traffic through the neighborhoods," he said.

Councilmember Roche cautioned against rushing into a pedestrian plaza, noting the mixed history of pedestrian malls nationally. "It's not sort of if you build it, you will get foot traffic," she said. "It's more that if you already have a lot of foot traffic and it's already a really popular place to visit, then a pedestrian mall can be successful." She supported a First Friday pilot to test the concept.

Public commenters Ahmed Sharab and Alejandro Jaso both backed staff recommendations. Sharab urged robust and continuous bike infrastructure on Foothill Boulevard given nearby transit-oriented developments. Jaso endorsed phased implementation and argued that safe alternatives to driving are the best way to reduce congestion.

Decisions: No formal vote was taken — this was a work session — but all seven council members directed staff to advance the Civic Avenue option.

What's next: Staff will refine designs for the Civic Avenue conversion, study a B Street pedestrian plaza concept, and advance C Street two-way conversion with a cycle track. The project is supported by a Safe Streets for All (SS4A) grant.

$16M Tax Overhaul Heads to November Ballot

The basics: Hayward's business license tax hasn't been updated since 1978. The proposed modernization introduces a progressive gross receipts structure with a new top bracket for businesses earning over $50 million. Rates for rental properties were increased from $3 to $3.75 per thousand of gross receipts, adding approximately $2 million over the April proposal. The measure is projected to generate roughly $16 million annually, with $12.3 million in new revenue.

Why it matters: That $12.3 million would close roughly 40% of the city's $30 million structural deficit — making this the single most consequential revenue tool on the table. Consultant Matt Newman of Blue Sky Consulting showed that Hayward's proposed rate of $4.06 per thousand of taxable sales would position the city between San Leandro ($3.96) and Newark, both of which are also considering ballot measures.

Where things stand: SEIU was credited for initially suggesting the tax update and helping design the progressive brackets. The Chamber of Commerce asked about a phased approach, but staff recommended against it due to business unpredictability concerns and the urgency of deficit reduction. The ballot question language was finalized at approximately 73–75 words of a 75-word limit.

All seven council members praised the collaborative process. Councilmember Bonilla was designated to author the affirmative ballot argument. No public comment was received on this item.

Decisions: The resolutions passed 7-0 (For: Andrews, Bonilla, Goldstein, Roche, Syrop, Zermeño, Salinas; Against: none; Absent: none).

What's next: An education campaign for the measure begins immediately, with voters deciding on Nov. 3, 2026.

Pride Month: Celebration and Resistance

Mayor Salinas proclaimed June 2026 as LGBTQIA+ Pride Month, recognizing Hayward's history as one of the first U.S. cities to host a gay prom. Representatives from Cal State East Bay's LGBTQ faculty association, Chabot College's Queer Educators Network, the Hayward Public Library, and community advocates received copies of the proclamation.

Councilmember Ray Bonilla Jr. spoke personally: "As a proud gay man and member of the LGBT community, this recognition is deeply personal to me. Pride is a celebration of authenticity, courage, and the freedom to be who we are."

Robert Lopez, a former organizer of the Hayward Gay Prom, connected the celebration to broader civil rights struggles: "When we fly these flags, when we fly that American flag, it's not just pride and who we are, but it's also a calling to the resistance when our constitutional rights are in danger."

A ceremonial raising of the Intersex Inclusive Progress Pride flag is planned for June 11 at City Hall.

Minor Items

• Safe Streets Hayward Phase 1 corridor alternatives for A Street, B Street, and Tennyson Road approved on consent (7-0). Public commenter Ahmed Sharab invoked Vision Zero in strong support.

• Regis Village concerns: During consent discussion, Mayor Pro Tem Syrop pressed staff on conversations with public safety partners about the facility's impact on city resources. City Manager Ott confirmed active discussions with the county co-funder and Beck, the operator. Councilmember Andrews requested outreach to the state for additional support. Councilmember Roche clarified that Regis Village funds are pass-through, not general fund dollars.

• Gann Appropriations Limit for FY 2026-27 adopted unanimously (7-0) — routine state-mandated compliance.

• Downtown parking enforcement begins July 1. Parking remains free, but two community service officers will enforce existing time limits. A parking permit program for workers and residents is planned as a next phase.

• Closed session: City Attorney Lawson reported no reportable action from closed session on property negotiations.

• Community events announced: Juneteenth celebration June 20, Pride flag raising June 11, downtown street party June 18.

• Next meeting: June 16.