Executive Summary
The State of the City presentation (Presentation) was given to the Men’s Breakfast Club and again VIDEOon Jan 17, 2026 in Council.
Material misrepresentations in the City presentation and differ from City’s underlying source documents. We show both the City’s statements and the original record for public evaluation.
SECTIONS:
1. FALSE BANKRUPTCY FEARS TO RUSH THE FLAWED JUNE 2026 TAX - falsely portrayed as the “only” alternative to bankruptcy. LINK
2. Council Endorses the $16 million Mega-tax, but they only show $8 million is needed LINK
3.Thee Presentation Overstates Needs assessment by $1.5 Million LINK
4. The Presentation Misleads on Staffing Levels LINK
5. Other Representations by the City LINK
6. Pensions LINK
Fact-Check: The “State of the City” Presentation
1. FALSE BANKRUPTCY FEARS TO RUSH THE FLAWED JUNE 2026 TAX - falsely portrayed as the “only” alternative to bankruptcy.
Summary: The City inaccurately represented:
Measure E funding ends before 2027 to overstate urgency, to advocate the Mega-tax as the “only” solution
The City is two years from bankruptcy
Facts:
Measure E funds continue throughout 2027
The city is four years from bankruptcy, providing ample opportunity for a tax that actually fixes the city’s problems.
DETAILS:
a The City (Page 5) inaccurately represents: there is no Measure E funding ($5.1 million) during 2027. So, misrepresents the deficit as $7.8 million, rather than $2 million.
b. The City inaccurately Represents: in 2025 that the the City is two years away (2027) from bankruptcy (page 13)
Fact: The City’s annual financial report ( Link) shows the city has $20.5 M in funds available. The rate of deficits is $2 million a year, increasing to $7 million in 2028. This provides the city until 2029. A tax to fix the city’s critical problems (pensions and Infrastructure) can be passed by Nov 2026, Mar 2027 or June 2027.
Source: The City’s 2025 audited Financial report ( Link) shows $20.5 M in funds available: $12.5 M in Unrestricted funds (page 91) and $8 M in emergency funds (page 5).
2. Council Endorses the $16 million Mega-tax, but they only show $8 million is needed
The City (Page 5) represents: the funding gap needed to be filled by new revenue is $8 million.
3. The Presentation Overstates Needs assessment by $1.5 Million
The City (Page 25) represents: Operating costs increased $6.3 million since 2018. The Police Department total of $8.2M is shown separately from the CalPERs payment.
FACT: The City’s 2026 budget (55th page) shows the Police Department cost of $8.2M INCLUDES their $1.5M CalPERS UAL payment.
Impact: The City overstated Operational needs of $6.3M by 24%, so it should be $4.8M.
The City (Page 18) represents: Staffing levels were reduced and remain “reduced”, by showing an incomplete representation of staff levels.
The City added two new employees (LINK) approved on 1/27/25, bringing the City’s current approved staffing levels to 57.5, which exceeds the city’s 10, 15, 20 and 25 year staffing averages.
The City also shows 13% (7) of staff positions remain unfilled year over year without discussion of impact and reorganization solutions.
4. The Presentation Misleads on Staffing Levels
FACT: The City audited reports show the time frame chosen by the city provides a biased view of the facts. (Page 18) represents: Over 24 years, staffing has averaged 56.3 employees.
The reports also show the City’s population is much smaller today than anytime in the last 24 years.
5. Other Representations by the City
5.a. The City (Page 2) represents: They “hear” Residents.
FACT: Council abandoned their own tax VIDEO to endorse the Mega-tax that excludes fiscal stability (pension debt and infrastructure), which is a #3 PRIORITY for residents, above Police, as stated in the City’s Survey page 3)
5.b. The City (Page 6) represents: Pension costs are reflected within the department operating budgets.
FACT: According to the City’s audited Financial report (LINK), the City owes CalPERS $20 million in debt, because we are not paying the full cost of pensions.
For this reason, the department costs are understated and underpaid. Fire services include full costs.
5.c. The City (Page 7) represents: they have few alternative revenue streams.
Yet the city has not even tried. Here are many
FACTs:
the only “Choice” presented by the City is to pass the June “safety” tax, meaning this presentation by the city is illegal advocacy.
the presentation includes pension and infrastructure issues, that are not solved by the June “safety” tax. So, the Presentation misleads the audience into believing the ONLY solution presented solves the challenges
It is illegal for the city to misrepresent Facts about ballot taxes
5.e. The City (Page 5) represents: “Structural Deficits exist today”
FACTs:
The City’s Structural Deficits, caused by growing unfunded pension obligations, existed in 2019 when Councilmembers McGowan, Kemps and Lozzi were elected. Pension debt has tripled since.
This presentation represents the “safety” tax is a solution to Structural Deficits, yet the “safety” tax does not fund pension debt or prevent pension debt from increasing.
5.d. The City (Page 1) represents: the purpose of their presentation is to “Understand the Challenges and Choices Ahead”.
The City (Page 14) represents: 90% of Pension debt will be paid off by increasing the annual payments by $1.3M.
The city annual pension debt increases and average of $1.15M year (details), so that leaves only $150k to pay off 90% ($18M) of a $20M debt.
So the city plans to take 120 years to pay of the debt. Worse, this does not include all the new positions the city plans to hire and to increase salaries annually over the rate of inflation.
Pensions Caused the Structural Deficit Details
6. PENSIONS
