Hayward announces hiring freeze, creates budget war room' after city drains $31 million in reserves

"The city of Hayward has announced it will freeze hiring for vacant positions as city officials including an interim finance director and city manager grapple with a structural budget deficit that drained $31 million from the city's reserve this past year and nearly emptied its coffers. The city has formed a budget war room to revise the fiscal year 2026 budget and avoid the overestimated revenues, underestimated expenses, overhiring and purchase of a downtown movie theater that led to the city's current economic woes."

"It was a perfect storm. We added positions to respond to needs, we negotiated new labor standards, and there was also the expenditure to purchase the theater, and, frankly, we have some internal overtime spending controls that need to be tightened up, said Chuck Finnie, communications and marketing officer for the city of Hayward. We cannot afford to operate as we have been in the last 18 months."

"Starting in January of this year which was six months halfway through the 2025 fiscal year we had a new city manager and a departed finance director, Finnie said. We weren't going to have the money, and so we needed to get a firm grasp on what the causes were of the over-budget spending in the last year. The first of these missteps, the working group determined, came during the rush of hiring during the pandemic as the city added the equivalent of 33 employees to its expenditures. These costs were exacerbated by unbudgeted overtime expenses and the new labor contracts for the city's firefighters, police and other city workers, Finnie said."

Hayward faces a structural budget deficit that drained $31 million from reserves and nearly emptied city coffers, prompting a hiring freeze for vacant positions. City leaders formed a budget war room to revise the fiscal year 2026 budget after recognizing overestimated revenues, underestimated expenses, overhiring and the purchase of a downtown movie theater. New labor contracts, unbudgeted overtime and pandemic-era hiring added costs, including the equivalent of 33 employees. Interim City Manager Jayanti Addleman and staff are identifying causes and tightening internal spending controls. The adopted budget had already planned to use $8.6 million in depleted reserves.

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