Newark Closes Year With $2.7M Surplus, Weighs Lower Reserve Target
City Council • NewarkSeptember 24, 2026
Locunity is an independent informational service and is not an official government page for this commission. All information is sourced from public footage and an analysis of official agendas with the aid of responsible, fact-checked AI. to report an error or omission.
Newark's general fund finished fiscal year 2025-26 with about $2.7 million to spare after required reserve transfers, giving the City Council a rare budget moment with no hard choices. The council adopted year-end budget amendments 5-0. In the same meeting, finance staff opened the door to lowering the city's 30% emergency reserve target, and the council raised its own pay over one dissent.
- $2.7M net operating surplus as revenues beat budget by $7.9M and spending came in $3.7M under
- 30% reserve target could drop after an updated risk analysis, finance staff said
- Council pay raise adopted 4-1, with Councilmember Terrence Grindall dissenting again
- BRH overlay zoning map change passes 4-0 after Vice Mayor Matthew Jorgens recuses
Newark's Books Close in the Black
The basics: A year-end review compares what the city collected and spent against its amended budget. Newark also keeps a Section 115 trust, a restricted account cities typically use to prefund pension costs.
Why it matters: A surplus after required transfers means no difficult cuts. Staff warned that part of the revenue is one-time money and is excluded from future projections, so the windfall doesn't reset the city's long-term baseline.
Where things stand: "The city ended fiscal year 2026 with a net operating surplus of approximately $2.7 million," said City Manager David J. Benoun.
Deputy Finance Director Gloria Del Rosario walked through the revenue side. "General fund total revenues at $98.1 million is $7.9 million above the amended budget," she said.
Most of the gains came from familiar sources:
- Sales tax and Measure GG together came in $4.5M over budget.
- Transient occupancy tax (TOT), the city's hotel tax, rose. Occupancy hit 70.4%, up from 67.2%.
- An anonymous donation of about $700,000 is earmarked for a senior-related capital project.
On spending, personnel costs totaled $45.8M. Non-personnel spending ran $3.7M under budget, partly because some spending was deferred to FY 2026-27. About $8.4M in revenue, including excess Measure GG and TOT dollars, is designated for capital projects.
Reserve debate: Is 30% still right? A $2.4M transfer keeps the city's Emergency and Fiscal Uncertainty Reserve at its 30% target. Councilmember Julie Del Catancio asked whether that level is reasonable.
Del Rosario said holding 30% will get harder as expenses escalate. Benoun said the target has ranged from 30% to 35% in the past and is periodically re-tested. "Approximately every 4 to 6 years, something like that, our finance team undergoes a sensitivity analysis to determine what would be the appropriate level of contributions towards our reserves," he said.
Finance Director Krysten Lee said an updated GFOA risk analysis is underway. "So we may be presenting, if possible, to lower that target in the future," she said. Benoun confirmed that Section 115 trust contributions cannot be used for other purposes. The trust now holds $15.6M.
Decisions and stakeholder impacts: Councilmember Eve Marie Little moved to accept the report and adopt the budget and capital improvement program (CIP) amendments. Del Catancio seconded. The vote was For: 5 (Hannon, Jorgens, Little, Del Catancio, Grindall), Against: 0, Absent: 0.
Residents avoid service cuts this cycle. Capital projects, including the donor-funded senior project, gain dedicated dollars. A lower reserve target would free up money for operations but would shrink the city's cushion against shocks. Mayor Michael Hannon asked staff to add a next-year budget column to future presentations, and staff agreed.
What's next: Any change to the reserve target would come with the city's five-year forecast, after the risk analysis is complete.
Council Raises Own Pay; Grindall Dissents
Why it matters: Elected officials set their own compensation. This year's increase passed without debate, and the only recorded dissent came because one member pulled the item from consent.
Where things stand: The ordinance amends Chapter 2.09 of the Newark Municipal Code to increase salaries for the mayor and councilmembers. This was its second reading, the final adoption step for a city ordinance. Councilmember Grindall, who also opposed it at first reading, pulled the item from the consent calendar for one reason. "I just wanted to be able to vote against it," he said.
Decisions and stakeholder impacts: Little moved to approve the pay ordinance together with a separate contract item, and Jorgens seconded. Members voted on each item separately. The pay ordinance passed For: 4 (Hannon, Jorgens, Little, Del Catancio), Against: 1 (Grindall), Absent: 0. The new salary figures were not discussed.
Zoning Map Expands BRH Overlay; Vice Mayor Recuses
The basics: An overlay district adds a layer of zoning rules on top of a parcel's base zoning. This ordinance adds parcels to Newark's BRH overlay district.
Why it matters: Staff described the change as bringing Newark into compliance with state law and making city codes consistent with one another.
Where things stand: Vice Mayor Jorgens pulled the item from consent to disclose a conflict before stepping aside. "I have a real property leasehold interest that is adjacent to a property that is proposed to be included in the BRH overlay district by the proposed zoning map amendment," he said.
Decisions and stakeholder impacts: Little moved the ordinance and Del Catancio seconded. It passed For: 4 (Hannon, Little, Del Catancio, Grindall), Against: 0, Recused: 1 (Jorgens). Owners of the added parcels now fall under the overlay's rules.
The bigger picture: The vote came against a backdrop of tension between Sacramento and city halls over who controls land use. Later in the meeting, Grindall reported from the League of California Cities conference. "Tomorrow I'll have an opportunity to vote on a resolution to direct the league to continue to work and to work more forcefully to retain local control over land use decisions," he said.
- Public Art Committee: Council approved Mayor Hannon's appointment of Mariana 5-0. About 27 to 28 people applied after the committee grew from five to nine seats.
- Granicus contract: The council approved a $13,031.92 amendment 5-0. Benoun said it is a one-time fee for a one-year extension of website services, not an annual increase.
- Consent calendar: Five items passed 5-0, including fitness equipment replacement at the Silliman Center and a STEP traffic enforcement grant.
- Rental inspections: A pilot program is inspecting 64 rental units using a 74-item checklist.
- Emergency readiness: Emergency Preparedness Manager Richard Martinez recognized the CERT team and city staff trained on the Emergency Operations Center and Incident Command System. He urged residents to build go bags.
Looking ahead: Coffee with a Cop is Sept. 29, and a free shredding event is Oct. 3. A full review of the rental inspection pilot is expected in early 2027 and will shape whether Newark builds a citywide program. The reserve-target risk analysis will arrive with the five-year forecast.