One Hayward public safety operator received more in overtime pay last year than their base salary. A Hayward Fire Department battalion chief received nearly a quarter-million dollars in overtime. They’re just two examples of how the city of Hayward is wrestling to rein in spending fueled by salaries, benefits and overtime.
As Hayward revises its 2025-2026 budget after depleting $31 million in its general fund budget, the city is working to rein in its expenses after a 21% increase in salaries and benefits and a 14% increase in overtime that has caused city officials to return to the negotiation table with the city’s labor groups.
“Our public safety departments account for the lion’s share of overtime expenses, largely because they account for the lion’s share of overall city staffing,” Hayward communications manager Chuck Finnie said in a statement to Bay Area News Group. “Our strategy for reducing overtime is to reduce vacancies and identify more efficient ways to meet minimum fire and police department staffing and priority service needs.”
Along with increased expenses, Hayward’s major budget deficit this past year was also fueled by lower-than-estimated revenue for the city – cumulatively resulting in what Finnie calls a “perfect storm.” In total, the city spent $248 million in the 2025 fiscal year – more than $21 million over budget for the year and leaving just $1.2 million in its reserves, according to the city.
Many of the same structural issues apply to the current budget, which was approved on July 1 and would result in a $30.6 million deficit if it is not revised. To prevent another year in the red, city leaders established a “budget war room” in September.
The first move was to freeze hiring in the city, while the city council and other senior staff announced they would voluntarily take pay cuts and forego cost-of-living adjustments. The city hopes that renegotiating with the city’s labor groups will result in a more budget-friendly deal for the city’s future.
Interim city manager Jayanti Addleman declined to comment on the city’s negotiating objective, but said the city would hold a public work session at the Nov. 18 city council meeting, where officials will review how to reduce personnel costs and close the budget deficit.
Hayward Mayor Mark Salinas said he has faith that the city’s labor groups will cooperate to improve the city’s finances.
“Our labor groups have always come to the bargaining table and have worked with the council to ensure the financial stability of the city,” Salinas said.
Employees are typically the largest expense for any city, according to Tom Rubin, vice president of the Alameda County Taxpayers Association. Rubin is a former auditor who has monitored the financial management of cities and transportation agencies across the Bay Area — many of which have struggled with budget cuts since the sunsetting of COVID relief funds. But overtime for some employees is often a wise decision for cities’ budgets when healthcare and other benefits are taken into consideration, he said.
“There are some jobs where it’s just not possible or practical to hire people who will work 40 hours a week. And for cities, that’s first responders, police and fire and paramedics.” Rubin said. “Sometimes, it’s more economical for cities to have a certain amount of overtime.”
In addition, fire and police departments have mandatory staffing level requirements, Rubin said, which demand that public safety employees often work more than 40 hours per week. For this reason, he said, it’s often difficult for cities to retain public safety employees who have to sacrifice family life in exchange for their careers. Still, Rubin said the situation isn’t entirely inevitable, and that cities can curb excessive overtime if they make staffing a top priority.
“It’s not totally unavoidable, but it takes a concerted approach at the top,” Rubin said.
In an attempt to address the current budget crisis, Addleman said the city is cutting costs on a wide variety of expenses, including overtime. Officials are closely monitoring overtime expenses each payroll period and are “generally restricting” overtime to what is necessary to meet minimum staffing requirements for the Hayward Fire and Police departments, she told Bay Area News Group. With staffing costs accounting for the vast majority of expenses, the outcome of the Nov. 18 work session will be key.
“We are cutting spending on supplies and services and on travel and training,” Addleman said. “However, our primary focus is salaries and benefits costs, which account for 80 percent of general fund spending and now absorbing approximately 90 percent of general fund revenue.”