I bet you thought when a city has a trust fund, the money would be spent JUST on those issues. Pension funds? The same. Think money set aside for workers comp is spent on workers comp? You are wrong, Berkeley is showing that special funds are a fantasy. When you are going bankrupt, government will steal money from special funds.
“Council members appear to be broadly supportive of several budget balancing options presented by city finance staff, which include:
- Saving $6 million by tapping a trust set up to help Berkeley pay its pension obligations
- Pausing $5.2 million in contributions to another fund for worker’s compensation claims
- Reducing spending on information technology projects by $6.2 million
- Not hiring to fill dozens of vacant city jobs
But council members appear to be split on the proposal to cut $2.5 million budgeted for Berkeley’s Small Sites program, which helps local affordable housing groups buy and refurbish apartment buildings to protect their tenants from displacement. City staff have said the council could use that money to pay for the $2.5 million in local funding Berkeley must put up to access a grant from the state’s Encampment Resolution Funding program, which gives cities money to buy hotels that can house homeless residents as part of efforts to remove encampments.”
Now you know why to always vote no on tax increases, bonds or special district funds. Government lies—and you pay for the corruption.
Berkeley could pull money from affordable housing to balance budget deficit
Critics warn the budget maneuver would violate the trust of voters who passed Measure U1, a 2016 tax pitched as a funding source for affordable housing.
by Nico Savidge, Berkeleyside, 5/21/25 https://www.berkeleyside.org/2025/05/21/berkeley-could-pull-money-from-affordable-housing-to-balance-budget-deficit?utm_source=Berkeleyside+newsletters&utm_campaign=99800f75a9-RSS_DAILY_BRIEFING&utm_medium=email&utm_term=0_8582aac18f-6348643cf5-323112229&goal=0_aad4b5ee64-99800f75a9-323112229&mc_cid=99800f75a9&mc_eid=b83149c3e5
Berkeley leaders could use $2.5 million from a tax measure pitched to voters as a source of new funding for affordable housing to instead balance the city’s budget.
That’s the most controversial idea the City Council is considering to address a projected $26.8 million deficit for the coming fiscal year, because there is little indication officials are eyeing the kinds of widespread layoffs or service cuts that have made for painful budget debates in other cities.
But Berkeley’s finance staff warn the strategies the city could use to patch together a balanced budget this summer won’t help it address a structural deficit lurking in the future, which could get worse amid uncertainty about the broader economy and the Trump Administration’s efforts to slash federal funding.
“A lot of these options are not sustainable,” budget manager Sharon Friedrichsen told the City Council during a hearing Tuesday, “and we really want to look at options to address the structural deficit.”
The City Council must approve the budget by the end of June.
Council members appear to be broadly supportive of several budget balancing options presented by city finance staff, which include:
- Saving $6 million by tapping a trust set up to help Berkeley pay its pension obligations
- Pausing $5.2 million in contributions to another fund for worker’s compensation claims
- Reducing spending on information technology projects by $6.2 million
- Not hiring to fill dozens of vacant city jobs
But council members appear to be split on the proposal to cut $2.5 million budgeted for Berkeley’s Small Sites program, which helps local affordable housing groups buy and refurbish apartment buildings to protect their tenants from displacement. City staff have said the council could use that money to pay for the $2.5 million in local funding Berkeley must put up to access a grant from the state’s Encampment Resolution Funding program, which gives cities money to buy hotels that can house homeless residents as part of efforts to remove encampments.
Funding for the Small Sites program comes from Measure U1, an increase to business taxes paid by landlords that voters approved in 2016. The campaign to pass the measure described it as a new funding source for affordable housing, but the money it raises goes into the city’s general fund — meaning the council could decide to use it for other purposes.
Supporters of the Small Sites program who turned out for Tuesday’s hearing, including representatives from local land trusts that have used it to buy properties and tenants from several of those buildings, asked the council not to strip its funding. Several warned that doing so would be a breach of voters’ trust given how Measure U1 was passed.
“That promise was made, and you will be violating it,” said Stephen Barton, a member of the Bay Area Community Land Trust’s board who worked on the U1 campaign.
Land trusts contend the strategy of acquiring existing apartments and turning them into dedicated below-market-rate housing is often much less expensive than building a new affordable building, which in California can cost upwards of $1 million per unit.
“I wouldn’t be able to afford this home had it not been picked up by the Bay Area Community Land Trust,” said Paula Saenghoi, a resident of a North Berkeley apartment complex purchased with Small Sites funding. “It’s a great program.”
Some on the council appeared open to the funding move, including Councilmember Rashi Kesarwani, who disagreed with the contention that acquiring buildings was cost-effective for the city. While the overall price tag for a new affordable housing project can be high, Kesarwani said, those projects also attract state and federal funding — which can mean Berkeley has to chip in less of its own money.
“There’s a value in [the Small Sites program] when we have the funds available,” Kesarwani said, but “we don’t have it this time.”
Other council members said they want to find ways to preserve the program’s funding. And Mayor Adena Ishii was skeptical of redirecting the money toward an effort to remove a homeless encampment, which she said was “not a match” for the affordable housing promises made during the Measure U1 campaign.
“It is very important to honor the integrity of voter-approved ballot measures,” Ishii said, echoing a concern she raised at a meeting about the budget in April.
Ishii plans to put forward her budget recommendations at the June 12 meeting of the council’s Budget and Finance Committee.
Where can Berkeley cut costs?
Funding for the Small Sites program isn’t the only tough choice the City Council will have to make in this tight budget year.
The strategies presented by city staff were projected to narrowly balance the city’s books, but they don’t include any of the $4 million worth of funding requests, known as referrals, that have been put forward by council members for next year’s budget. That list includes referrals to provide legal aid for people facing deportation, improve facilities at the Berkeley Marina, overhaul and widen the Ohlone Greenway and paint sections of street curbs near intersections red to comply with a new state law. Those were just some of the referrals council members identified as priorities at Tuesday’s meeting, but funding them will mean finding other line items to cut.
Berkeley is looking for savings in its workforce: City Manager Paul Buddenhagen instituted a hiring freeze last month as a cost-saving measure, and the council will decide in this budget process how many of the just over 100 staff positions that are currently empty should stay that way. After consulting with city department heads, finance staff put forward a list with the equivalent of about 55 full-time positions that could stay vacant without causing major disruptions to city services.
The council voted Tuesday night to also ask Berkeley’s charter offices — those that are independent of the city manager, such as the council and mayor, city auditor and director of police accountability — to consider whether they can leave some of their vacant positions open as well.
The city laid off five part-time employees earlier this spring as a cost-saving measure, but officials did not discuss any broader job cuts at Tuesday’s meeting.
