City manager says Richmond may be unable to add staff without retirements

City Manager Shasa Curl told the Richmond City Council on Tuesday that the city can no longer afford to hire new employees unless an existing employee retires first due to increasing workforce costs.

“In the absence of retirements, we are at a point where new personnel cannot be added because of the cost,” Curl said at a special budget meeting on the proposed fiscal year 2026-27 spending plan. “It is not sustainable for the city to continue to hire unless there are retirements.”

Curl said salaries, health care, and pension costs have all risen sharply, with total personnel spending up more than $54 million since fiscal year 2021-22.

The warning came as Curl highlighted that the city has added 92 employees since fiscal year 2020-21, which she called a "sign of progress." The proposed $274.7 million general fund budget is balanced in part by counting on roughly $16.4 million in savings from jobs that are approved but vacant, about 12 percent of the workforce. Finance Director Emily Combs described the budget as “everything we have already committed to doing, and nothing new.”

“It’s kind of like gas,” Curl said. “Gas used to be four something, then it was five something, now it’s six something. That’s essentially what’s happening with our city budget.”

Councilmember Claudia Jimenez pushed back, saying the city should first study whether adding staff in key areas could generate enough new revenue or service improvements to pay for themselves before accepting the constraint.

“Without an analysis, maybe by bringing some more people, that will allow us to get more revenue or increase the service, it’s hard for me to think about not advocating for the hiring that we need,” Jimenez said.

A large share of that increase comes from the city’s annual payments to CalPERS, the state pension system, to pay down a retirement debt that has built up over the years. Those payments cover the gap between what the pension fund holds and what it has promised to pay retirees.

A chart presented at the meeting showed the city’s combined pension debt payments, covering both general city employees and public safety workers, climbing from about $26.9 million in fiscal year 2021-22 to a projected $44.3 million by fiscal year 2030-31, a roughly 65 percent increase over a decade.

Curl pointed to the chart, noting that payments continue to rise even in years when the pension fund’s investments perform well.

Staff presented two options to the council ahead of the final budget. The first would keep the budget exactly as presented, with no changes to existing programs or services. The second would allow the council to shift funds from lower-priority programs to cover shortfalls in several capital projects, including $1.045 million for the Richmond Wellness Trail Phase II, $1 million for a Bay Trail segment at Point Molate, and about $631,000 in cost overruns at Shields-Reid and Wendell parks.

The council did not vote on either option or on any of the other questions staff asked for guidance on, including whether to end the city’s electric bikeshare program.

Staff is scheduled to return June 16 with a summary of outstanding decisions before the budget is set for final adoption June 23.

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